DOE, Energy Exports, Energy Policy, Liquefied Natural Gas (LNG)

Our Move Towards Energy Exportation: The U.S. Department of Energy Approves a Second Facility to Export Liquefied Natural Gas (LNG) to Non-FTA Countries

            With the increasing supply of domestic natural gas, there is a growing consensus that liquefied natural gas (“LNG”) exports represent an opportunity for the United States to become a major player in the global energy sector.  The last couple of weeks have seen developments that may move our country closer to becoming a major exporter of natural gas.  On May 17, 2013, the U.S. Department of Energy (“DOE”) conditionally approved the second of more than twenty pending applications for the export of LNG to countries that do not have a Free Trade Agreement (“FTA”) with the U.S. (“non-FTA countries”), granting Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (“Freeport”) approval to export domestically produced LNG.  It has been two years since the DOE has approved a company’s application for the export of LNG to non-FTA countries.

            The export of natural gas, including LNG, must be approved by the DOE, but there are distinct approval processes for exports to countries that have an FTA with the U.S. and non-FTA countries.  The Natural Gas Act requires the DOE to authorize exports to non-FTA countries unless the proposed exports “will not be consistent with the public interest.”  The DOE must post a notice of application in the Federal Register for comments, protests and motions to intervene, and evaluate the application to make a public interest consistency determination.  To the contrary, The Natural Gas Act (as amended) deems FTA exports to be in the public interest and applications to export to FTA countries must be authorized without modification or delay.  Click here for information regarding FTA and non-FTA countries.

            The DOE’s May 17, 2013 conditional approval of Freeport’s export of LNG to non-FTA countries is subject to an environmental review and final regulatory approval.  The approval will permit Freeport to export LNG from its LNG Terminal on Quintana Island, Texas at a rate of up to 1.4 billion cubic feet of natural gas a day for a period of 20 years. You can see the full Freeport DOE order (FE Docket No. 10-161-LNG) here. According to the DOE, “The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country. This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record production rate of 69.3 Bcf/d in 2013.”  To date, the only other application to export LNG to non-FTA countries that the DOE has approved was in May 2011 for the Sabine Pass LNG Terminal in Cameron Parish, Louisiana.  There are approximately twenty additional applications pending for approval to export LNG to non-FTA countries – see a summary of all LNG export applications submitted to the DOE here.

            With the “transformative impact” that natural gas is having on the energy landscape, we can expect transformative policy and regulation in this area.  The global demand for LNG is expected to exceed available supply, and LNG exportation is likely the area of the energy industry awaiting the most policy development.  Just four days after the DOE’s approval of Freeport’s LNG export application, the U.S. Senate Committee on Energy & Natural Resources held the Full Committee Forum: Domestic Supply and Exports, to discuss our exportation of natural gas.  In the last “State of the Union” Address, President Obama pledged his support for domestic oil and natural gas production, but was silent on the issue of LNG exportation.  His Administration undoubtedly will have an impact on the viability of LNG exporting.  You can read my article “State of the Energy” in Energy & Mining International Magazine for additional insight into developments in the policy and regulation of the natural gas and oil industries.

Brian Heslin

About Brian Heslin

Brian Heslin represents energy companies in regulatory proceedings at the state and federal level. In addition, he provides advice on busines and strategic planning, upstream natural gas supply and capacity negotiation, compliance and other related services.

Leave a comment

Your email address will not be published. Required fields are marked *

Welcome to the Energy Interdependency Blog!

The landscape of the energy industry is rapidly changing, with a focus on the development of clean, domestic energy sources and a secure, reliable energy infrastructure driving significant changes in the interdependency of energy industry segments and an increase in government regulation. Continued growth in the domestic production of oil and natural gas has positioned the U.S. to be an energy exporter in the global market and will have a marked impact on the course of the industry’s development.

The Moore & Van Allen Energy Interdependency Blog seeks to inform companies navigating the domestic and global energy markets by providing leading-edge insight on issues critical to energy interdependency and developments in energy policy, regulation, and related litigation.

Connect to Recent Authors

  • Brian Heslin:  View Brian Heslin's Bio View Brian Heslin's LinkedIn profileFollow @BrianHeslin on Twitter
  • Mindy Vervais:  View Mindy Vervais’ Bio View Mindy Vervais’ LinkedIn profile

  • Subscribe to Blog Via Email

    Follow MVA


    Blog Topics


    Our Energy Practice

    Headquartered in the burgeoning energy hub of Charlotte, NC, Moore & Van Allen has an extensive energy practice that is national and international in scope. Our energy team is composed of highly-skilled attorneys from a cross-section of legal disciplines with a thorough understanding of the complex technologies, transactions, and regulations inherent to the energy industry and its various segments, including natural gas & LNG, electricity, oil, water & sewer, telecommunications, and alternative energy & green technology.

    We leverage our significant experience to guide our clients successfully through the intricacies of their businesses, from marketing, compliance counseling, and project development, to project finance, federal and state regulation, investigations and litigation. We proudly and successfully serve companies throughout the nation, including the largest natural gas and electric companies in the Carolinas. Read More About Our Practice and Meet the MVA Energy Team.


    No Attorney-Client Relationship Created by Use of this Website: Neither your receipt of information from this website, nor your use of this website to contact Moore & Van Allen or one of its attorneys creates an attorney-client relationship between you and Moore & Van Allen. As a matter of policy, Moore & Van Allen does not accept a new client without first investigating for possible conflicts of interests and obtaining a signed engagement letter. (Moore & Van Allen may, for example, already represent another party involved in your matter.) Accordingly, you should not use this website to provide confidential information about a legal matter of yours to Moore & Van Allen.

    No Legal Advice Intended: This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems. (Read All)