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U.S. Department of Energy Proposes Expedited Approval for Small-Scale Natural Gas Exports

 

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The U.S. Department of Energy (DOE) announced a proposed rule that will provide for faster approval of small-scale exports of natural gas, including liquefied natural gas (LNG), from U.S. export facilities.

The U.S. small-scale LNG export market involves exports of small volumes of natural gas from the United States primarily to countries in the Caribbean, Central America, and South America.  Many of the countries in these regions do not generate enough natural gas demand to support the economies of scale required to justify large volumes of LNG imports from large-scale LNG terminals via conventional LNG tankers.  The small-scale natural export market has developed as a solution to the practical and economic constraints limiting natural gas exports to these countries.

"The Trump Administration is focused on finding ways to unleash American energy and providing a reliable and environmentally friendly fuel to our trading partners who face unique energy infrastructure challenges. The Department of Energy and this Administration are wholeheartedly committed to strengthening the energy security of the United States and our allies," said Secretary of Energy Rick Perry.

This deregulatory measure will expedite the review and approval of applications to export small amounts of natural gas in the emerging small-scale LNG export market.  Under the Natural Gas Act, DOE has jurisdiction over imports and exports of natural gas.  For applications to export natural gas to countries without a qualifying free trade agreement (non-free trade agreement countries), DOE must conduct a public interest review before authorizing an export.  This proposed rule provides that DOE, upon receipt of any complete application to export natural gas (including LNG) to non-free trade agreement countries, will grant the application provided that the application meets two criteria the application proposes to export no more than 0.14 billion cubic feet per day (Bcf/d), and the proposed export qualifies for a categorical exclusion under DOE's National Environmental Policy Act (NEPA) regulations.  For applications meeting these criteria, the exports are considered "small-scale natural gas exports" and are deemed in the public interest under the Natural Gas Act.  Exports of natural gas to free trade agreement countries are already deemed in the public interest under the Act.

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