As the top global natural gas producer and exporter, America’s exports of liquefied natural gas (LNG) play a vital role in supporting global energy security. Following Russia’s brutal invasion of Ukraine, the United States has become the primary supplier of LNG to Europe, demonstrating the flexibility and reliability of American LNG in global markets. Across the U.S. government, and here at the U.S. Department of Energy (DOE), we are committed to doing everything we can to support the energy security and sustainability of our international allies and partners, while working to reduce emissions across LNG supply chains.
Looking forward, we must continue to tackle the issue of climate change and work to achieve our clean energy and industrial goals. This requires a natural gas strategy that safeguards energy security for the nation and our allies, provides affordable energy to American consumers, bolsters our economic competitiveness, and supports decarbonization and mitigation of methane emissions across the natural gas value chain.
DOE’s Office of Fossil Energy and Carbon Management is using its research portfolio and regulatory authorities to help build a sustainable path for natural gas, given its crucial role in the current domestic and global energy mix and in the transition to net-zero emissions by midcentury. Today’s natural gas issuances reflect a balanced approach that gives full consideration to energy security, domestic affordability, and our climate commitments. More details on today’s issuances:
Currently, the cumulative volume of LNG approved for non-FTA exports is over 49 billion cubic feet per day, which is nearly half of current domestic natural gas production and approximately four times the actual volume of current LNG exports. Moreover, more than half of the volume approved for exports to non-FTA countries is held by LNG projects that are not operating or under construction. The large volume of natural gas approved for export versus the amount of gas presently being exported (or expected to be exported based on liquefaction capacity under construction), obscures the true demand for U.S. LNG and makes it difficult for DOE to assess the impacts of any new non-FTA applications.
In the policy statement being issued today, DOE reaffirms the seven-year deadline for authorization holders to commence exports of natural gas (primarily LNG) to non-FTA countries in long-term authorizations issued under section 3(a) of the Natural Gas Act.[1] In current and future non-FTA authorizations, DOE will not consider an application for a commencement extension, unless the authorization holder can demonstrate that: (1) it has physically commenced construction on the associated export facility before the request for additional time to commence exports is made; and (2) its inability to comply with its existing export commencement deadline is the result of extenuating circumstances outside of its control. Applications seeking an extension under this statement will be published in the Federal Register for public comment.
If an authorization holder reaches the end of its seven-year export commencement period and cannot make this demonstration, the non-FTA authorization will expire on the deadline set forth in the original order. Authorization holders unable to make this demonstration may submit a new non-FTA application, which will be considered without prejudice and based on the policies and analytical tools in use at the time of the new application.
Over time this will help align the total volume of exports approved under DOE’s non-FTA orders with the export capacity operating or under construction using U.S.-sourced natural gas. This, in turn, will allow DOE to better assess whether new non-FTA applications are in the public interest; provide more certainty to the U.S. and global LNG export markets; and ensure that DOE is making decisions utilizing the latest market information and analytical tools available. Finally, this policy statement will help ensure that potential new entrants to the U.S. export market—including those seeking to use newer technology and adopt better environmental practices—are not discouraged or delayed in entering the market due to competition from the large number of projects with export authorizations that have not even secured financing or begun construction.
In addition to the issuance of this policy statement, DOE is issuing final orders on pending applications for a commencement extension for non-FTA exports from two facilities, Port Arthur LNG and Lake Charles LNG, filed in 2022. These applications were ripe for a final decision prior to the publication of this policy statement. Therefore, DOE is taking action on these applications on other grounds outside of this policy statement.
The commencement deadline actions today neither remove any prior authorizations DOE has given, nor affect any U.S. LNG projects currently under construction, as each of the projects under construction is on track to commence exports within the commencement deadline of their current non-FTA authorizations.DOE is issuing a Request for Information that seeks information on strategies and technologies that natural gas and LNG companies are deploying, or could deploy, to reduce greenhouse gas emissions and other pollutants associated with natural gas delivered to a liquefaction facility, at liquefaction facilities, and during the loading, transport, and delivery of natural gas to a regasification facility. This information will inform DOE’s research and development activities within the Office of Resource Sustainability’s Methane Mitigation Technologies Division and the Office of Carbon Management Technologies’ Point Source Carbon Capture Division. It will also provide DOE with information on current industry practices and opportunities related to greenhouse gas emissions and the competitiveness of U.S. LNG that could, in turn, provide valuable inputs to DOE’s regulatory proceedings under the Natural Gas Act.
DOE STRATEGY TO MEET NET-ZERO GREENHOUSE GAS EMISSIONS
Collectively, these issuances are part of a broader DOE strategy that recognizes the importance of natural gas in meeting our goal of net-zero greenhouse gas emissions by midcentury. Other related and important initiatives we are undertaking include a recent award of $47 million for 22 research and development projects that will advance methane measurement, monitoring, and mitigation technologies to help detect, quantify, and reduce methane emissions across U.S. oil and natural gas producing regions.DOE’s Office of Fossil Energy and Carbon Management also recently hosted a natural gas roundtable with industry, nongovernmental organizations, and government officials to discuss a framework for measurement and monitoring, reporting, and verification of the greenhouse gas intensity of natural gas across the supply chain, both domestically and internationally.
At DOE, our goal is to bring transparency and best practices to the U.S. and global natural gas supply chains. This, in turn, will help American industry achieve among the lowest emissions profiles of any natural gas producer in the world, demonstrating that natural gas production, consumption and exports from the United States can effectively align our energy security and climate goals.
[1] Two exceptions to the 7-year deadline are: (i) the Alaska LNG non-FTA authorization, which has a 12-year commencement deadline due to the unique aspects of that proposed project and (ii) orders authorizing small-scale exports of natural gas, which have a two-year commencement deadline.
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