President Biden ordered a pause on pending decisions on exports of Liquefied Natural Gas (LNG) to non-FTA (Free Trade Agreement) countries until the Department of Energy can update the underlying analyses for authorizations.
The White House said that the current economic and environmental analyses DOE uses to underpin its LNG export authorizations are roughly five years old and no longer adequately account for considerations such as potential energy cost increases for American consumers and manufacturers beyond current authorizations or the latest assessment of the impact of greenhouse gas emissions.
This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.—President Biden
The pause is subject to exception for unanticipated and immediate national security emergencies.
The United States is the global leader in LNG exports with 14 billion cubic feet per day (Bcf/d) in current operating capacity and 48 Bcf/d in total authorizations approved by DOE to date—more than three times the current export capacity.
This temporary pause on pending applications will not affect already authorized exports, which total 48 Bcf/d.
Background. Companies that want to export natural gas must get authorization from DOE’s Office of Fossil Energy and Carbon Management (FECM). The Natural Gas Act (NGA) requires FECM to make public interest determinations on applications to export LNG to countries without free trade agreements with the US.
There are two standards of review under the NGA, based on the intended destination of LNG. Where countries have a free trade agreement with the U.S (FTA countries), exports are deemed consistent with the public interest. The NGA directs DOE to evaluate LNG export applications to non- FTA countries.
DOE is required to grant requested export authority for non-FTA countries, unless it finds the proposed exports will be inconsistent with the public interest, or where trade is prohibited by law or policy. DOE acts on long-term applications to non-FTA countries after completing a public interest review that involves several criteria, such as economic and environmental reviews, including examination under the National Environmental Policy Act (NEPA).
Seven large-scale LNG facilities are using authorizations for export. Four other large-scale US terminals with DOE authorization are under construction.