In late May 2014, the Department of Energy (DOE) proposed changes to its process for approving applications to export liquefied natural gas (LNG) to foreign countries that do not have free trade agreements with the United States. In announcing the proposed changes, DOE said that it will stop issuing conditional approvals of LNG export applications. DOE's proposed procedural changes would not grant LNG export licenses until the Federal Energy Regulatory Commission (FERC) has completed its obligations under the National Environmental Policy Act. Only after FERC has completed its work would DOE issue a final determination that the project is in the public interest, as is required by the Natural Gas Act.
This proposed change in policy occurs at an important period in the debate over LNG and other energy exports from the United States. Several bills are pending on Capitol Hill in Washington, D.C. that would alter the process for reviewing LNG export applications. One bill, H.R. 6, has passed the House and has become a political issue for a U.S. Senate race that could determine which party controls the chamber in 2015. Additionally, DOE has continued granting licenses to export LNG; on July 31, DOE conditionally authorized LNG Development Company LLC to begin exporting LNG. That is the eighth LNG export application to be approved by DOE, and the second since March. There has also been a strong push for loosening some of the restrictions on exports of crude oil from the United States. Such exports have essentially been banned for nearly four decades, but the boom in American oil production is forcing a change in the debate, and the White House is paying attention.
This is a busy time in energy policy in Washington, D.C., and the issue of exports remains front and center as the United States faces a newfound abundance of domestic fossil fuels. Those resources have taken on new importance as geopolitical conflicts have increased between Russia and the West in recent months. Fossil fuel companies looking for expansion opportunities into new fuel markets should monitor these developments closely and consider personally advocating for their interests in our nation's capital.