Two Steps Forward Towards U.S. Liquefied Natural Gas (LNG) Exportation: Are We Moving Far Enough and Fast Enough?

by Moore & Van Allen PLLC

On August 7, 2013, the Energy Department conditionally approved the application of Lake Charles Exports, LLC to export liquefied natural gas (“LNG”) to countries that do not have a Free Trade Agreement with the United States (“non-FTA countries”).  This is the third U.S. facility to be approved to export LNG to non-FTA countries and the second such application to be approved this year.  The first authorization for LNG exports to non-FTA countries was granted in May 2011, while the second authorization was granted just a few months ago in May 2013.  This latest LNG export approval represents a significant pick up in the DOE’s processing of LNG export applications, which may put the U.S. in position to capitalize on the tremendous opportunity presented by the LNG export market.  But is the DOE still moving too slowly?  In our previous posts on the potential for U.S. exportation of LNG (here and here), we discussed industry projections that global LNG demand will exceed available supply in the near future, putting the U.S. in an advantageous position as a result of the shale natural gas boom.  We also discussed that the tremendous potential presented by LNG exports comes along with the attendant pressures for expeditious policy development and LNG export approval.  The U.S. Senate Committee on Energy & Natural Resources remains one source of such pressure.  In the week surrounding the Lake Charles non-FTA export authorization, Chairman Ron Wyden and Ranking Member Lisa Murkowski issued a letter to Energy Secretary Moniz seeking clarification of the DOE’s authority to revoke or revise any such authorizations that are granted and Ranking Member Murkowski released a white paper warning that the “narrow window” for the U.S. to compete in LNG exports will close rapidly.  Both Chairman Wyden and Ranking Member Murkowski issued statements regarding the DOE’s approval for LNG exports to non-FTA countries from the Lake Charles facility, expressing their perspectives on the critical considerations that accompany our country’s movement into this area of energy exportation.

The Lake Charles Authorization: Under the DOE conditional authorization, Lake Charles Exports, LLC is approved to export up to 2.0 billion cubic feet of natural gas daily for 20 years from its facility in Lake Charles, Louisiana.  You can access the DOE Press Release and Lake Charles Exports Conditional Authorization for additional details regarding the approval.  Combined with the other two facilities approved to export LNG to non-FTA countries, the DOE has approved the export of up to 5.6 billion cubic feet of LNG per day, which falls far short of the Energy Information Administration’s projected 2013 U.S. production rate of 69.96 billion cubic feet per day.   Yet, having the capacity to increase LNG exports is not the only consideration in determining whether to approve additional applications according to Senator Wyden, Chairman of the Senate Committee on Energy & Natural Resources.  In Chairman Wyden’s Statement on the DOE’s authorization of non-FTA exports from Lake Charles, he cautioned that “with each new permit to send natural gas overseas, the Energy Department has a higher bar to prove these exports are in the best interests of American consumers and employers,” given the potential impact on domestic prices with increased volumes of LNG exports.  According to the Senate Committee’s news release, the 5.6 billion cubic feet per day that has been authorized for export “is just below the 6-8 bcf per day that numerous reports and analysts have projected as the likely range for U.S. LNG exports, without impacts on domestic prices.” Ranking Member Murkowski’s Statement, however, cautioned the DOE to pick up the pace in processing the remainder of the pending LNG export applications, given the competition for market share that the U.S. faces from other countries that are actively exporting LNG: “We must remember that the window for building out our LNG capacity is not open-ended – it could close if we don’t seize this opportunity to have America’s natural gas play a major role in the growing global gas market.”  The Lake Charles conditional authorization is subject to environmental review and final regulatory approval.

U.S. Senate Activity Regarding LNG Exports:  The Senate Committee on Energy & Natural Resources remains invested in the U.S. export of domestically produced LNG.  Just days after the DOE granted the second non-FTA LNG export authorization in May 2013, the Senate Committee held a natural gas roundtable in which the potential of LNG exports played a large role in discussion.  You can read our previous post for additional details regarding the roundtable.  Since that time, the Committee has continued its efforts to clarify and develop effective policy to guide the U.S. into the LNG export market.  The week before the DOE’s Lake Charles export authorization, Chairman Wyden and Ranking Member Murkowski sent a Letter to Energy Secretary Moniz seeking clarification regarding the DOE’s authority under the Natural Gas Act and the Energy Policy and Conservation Act of 1975 to revoke or revise authorizations for LNG exports to non-FTA countries that it has granted.  The Senators posed the following questions to Secretary Moniz in the August 2, 2013 letter, asking for guidance regarding the circumstances under which an LNG export authorization could be modified or revoked and the process through which such modification or revocation would take place:

  1. Has DOE used authority under section 3(a) of the NGA to issue a supplemental order modifying or rescinding authority granted?  If so, how many times, and generally, under what circumstances?
  2. Has DOE used authority under section 16 of the NGA to issue a supplemental order modifying or rescinding authority granted?  If so, how many times, and generally, under what circumstances?
  3. Under any of the above authorities, how would a suspension or revocation proceeding be initiated?  Could a third party petition for suspension or revocation?
  4. Would DOE be required to hold a hearing on the proposed suspension or revocation?
  5. What is DOE statutorily required to consider when evaluating a suspension or revocation?
  6. If DOE has initiated revocation procedures in the past, what factors were considered?  Was the section 3(a) license revoked?
  7. Would the same public interest test applied for approval be applied for revocation?
  8. Is the “cumulative impact” of natural gas exports a factor DOE considers in the context of its revocation authority?
  9. Explain how the Administrative Procedures Act would affect a procedure where DOE sought to modify or revoke an authorization to export LNG.
  10. Describe any emergency authorities that could be used by DOE to revoke an authorization to export LNG.
  11. If DOE’s authorization order includes a reference to the agency’s authority under sections 3 and 16 of the NGA to modify or revoke an approval, and the authorization holder does not appeal that reference in the order, has the authorization holder accepted DOE’s authority and relinquished future arguments against DOE on that issue?

Despite the collaboration between Chairman Wyden and Ranking Member Murkowski on the August 2nd letter to Secretary Moniz, Ranking Member Murkowski holds independent beliefs in the benefits that LNG exports can provide for the U.S. economy and separately has pursued efforts to urge the U.S. to move quickly into the LNG export market.  The day before the DOE’s latest Lake Charles export authorization, Ranking Member Murkowski released a whitepaper titled, “The Narrowing Window: America’s Opportunity to Join the Global Gas Trade” which includes what has been described as “in-depth analysis that leads to a set of pro-growth policy recommendations.”  The August 6, 2013 white paper addresses the opportunity presented to the U.S. and the risk that we will lose out if the country continues to move too slowly: “The window for the United States to join the global gas trade will not be open indefinitely. In fact, it is narrowing, and there is a real possibility that the nation will miss out on a historic opportunity.”  The white paper concludes with specific policy recommendations, including the expeditious resolution of export applications pending before the DOE, the collaboration of federal agencies with gas-related projects overseas, and funding, research and Congressional support to make natural gas development a national priority.

With the DOE approval of the second LNG export application to non-FTA countries in just three months, we have taken two steps forward towards the U.S. becoming a player in the LNG global market.  Ranking Member Murkowski’s white paper stresses that the majority of growing demand for LNG is in non-FTA countries, “which means that in practice all export terminals require DOE approval.”  There are nineteen additional applications pending the DOE’s approval for exports LNG to non-FTA countries.  So, we can expect continued focused effort on the development of policy in this area.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Moore & Van Allen PLLC | Attorney Advertising

Written by:

Moore & Van Allen PLLC

Moore & Van Allen PLLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.