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On May 29, 2014, the Department of Energy (“DOE” or “the Department”) is proposing a change to its procedures to reflect changing market conditions, ensuring an efficient process that will also enable the Department to have more complete information when it makes public interest determinations for Liquefied Natural Gas (LNG) exports to non-Free Trade Agreement (FTA) countries. In addition, the Department will initiate an updated macroeconomic study and is releasing two environmental reports that explore the environmental impacts of unconventional natural gas production and lifecycle greenhouse gas impact of U.S. LNG exports.
Proposed Process Change
The Department proposes to make final public interest determinations only after completion of the review required by environmental laws and regulations that are included in the National Environmental Policy Act (NEPA), suspending its practice of issuing conditional commitments. The Department issued a Notice of Proposed Procedures for Liquefied Natural Gas Export Decisions for public comment. Comments are due July 21, 2014. The Department will continue to act on the request for conditional authorization currently under review during the period when the procedures proposed in this Notice are under consideration.
Economic Impact Study
DOE plans to undertake an economic study in order to gain a better understanding of how potential U.S. LNG exports between 12 and 20 billion cubic feet per day (Bcf/d) could affect the public interest. Using more recent data from sources like the Annual Energy Outlook 2014, the Energy Information Administration (EIA) will update its 2012 LNG Export Study, which only looked at export cases of 6 and 12 Bcf/d. Following the EIA update, DOE will again contract for an external analysis of the economic impact of this increased range of LNG exports and other effects that LNG exports might have on the U.S. natural gas market. While these studies are underway, the Department will continue to act on applications as stated above. To date, the Department has issued final authorization for export to non-FTA countries at a rate of 2.2 Bcf/d. If at any future time the cumulative export authorizations approach the high end of export cases examined, the Department will conduct additional studies as needed to understand the impact of higher export ranges. At all levels, the cumulative impacts will remain a key criterion in assessing the public interest.
Both the EIA study and the external analysis of economic impacts will be made available for public comment.
Release of Environmental Documents
To better inform the Department and the public of the environmental impacts of increased LNG exports, the Department elected to prepare two additional reports of environmental issues beyond what is required for NEPA.
The Department released the Draft Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States. The Draft Addendum is available for public comment through July 21, 2014. Comment on the Draft Addendum will be considered in preparation of the Final Addendum. Once final, the Addendum, along with other environmental information, will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.
- Draft Addendum to Environmental Review Documents Concerning Exports of Natural Gas from the United States
The Department also released the Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States. Comments on the LCA GHG report are due July 21, 2014. The LCA GHG Report and public comments received in response thereto will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.