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Infographic: Legislation Providing Regulatory Certainty Needed for LNG Exports

Clear and Consistent Process Will Stimulate Economic Growth and Job Creation

LNG-Approval-Process-Delays-InfographicAllowing the sale of U.S. natural gas abroad will create thousands of jobs in the United States, generate millions of dollars in new tax revenue for federal, state, and local governments, and supply our allies and trading partners with a reliable source of energy.[1]

The passage of legislation by the U.S. Congress that creates a more certain regulatory process will accelerate the realization of these important benefits. Specifically, new legislation needs to ensure that LNG applications are processed in a timely manner to provide project developers with a degree of certainty before they invest billions of dollars in the U.S. economy. Legislation providing greater regulatory certainty would also allow the U.S. to capture a unique window of opportunity to export LNG internationally and send a strong signal to our trading partners that the U.S. is committed to its role as a global energy leader.

Greater regulatory certainty encourages project development

The NFTA permit review procedure has changed three times in two years, and, without legislation, could well be changed again:

  • August 2012: DOE conditionally approved Cheniere Energy’s application to export LNG to non free-trade agreement (NFTA) countries, pending the completion of Federal Energy Regulatory Commission (FERC)’s review of the project’s compliance with the National Environmental Policy Act (NEPA).[2]
  • December 2012: DOE announced that it would review applications on a case by case basis, in the order they were received and only after they had pre-filed with FERC.[3]
  • August 2014: DOE once again amended the process, this time stating that it would act on applications only after FERC’s NEPA review had been completed.[4]

Fewer changes will lead to regulatory certainty and encourage project development.

The review process should be consistent

  • 107 days elapsed between FERC approval and DOE approval for Freeport LNG’s proposed terminal in Freeport, Texas – compared to 220 days for Dominion’s terminal in Cove Point, Maryland.[5]
  • The first six approved projects have had to wait an average of 2.6 years to complete the permitting process.[6]

We need to act now

  • Greater regulatory certainty will enhance America’s competitive position and help the U.S. capture this unique window of opportunity to export LNG.
  • Worldwide demand for LNG is approximately 37 billion cubic feet per day today, and it is projected to increase to around 60 billion cubic feet per day between 2020 and 2025.[7]
  • Increased domestic natural gas production is sufficient to meet future demand
  • But, as Rep. Bill Johnson said recently, “The window of opportunity for LNG exports will not remain open indefinitely.”[8]
  • An uncertain process may provide other countries a competitive advantage to fill the world demand for LNG. As William O’Keefe of the George C. Marshall Institute wrote recently, “The United States has an incentive not to wait. Our window of opportunity is closing. Worldwide demand is growing as nations move from coal to gas and seek secure supplies. While the American policymakers procrastinate, other countries are stepping up to meet these needs. Countries such as Lithuania and Poland are actively bringing on line capabilities to help meet regional demand.”[9]

The bottom line

To fully capture the abundant economic, environmental, and geopolitical benefits of LNG exports, legislation is needed to ensure that permit applications are processed in a timely manner.

Click here to read the letter CLNG, the Natural Gas Supply Association and other trade associations sent to Senate Leaders Mitch McConnell and Harry Reid in support of Senator Barrasso’s amendment to provide regulatory certainty for LNG exports.

View the infographic HERE.

[1] Center for Liquefied Natural Gas (CLNG), Natural Gas Exports Create Jobs.

[2] Department of Energy, Final Opinion and Order Granting Long-Term Authorization to Export Liquefied Natural Gas from Sabine Pass LNG Terminal to Non-Free Trade Agreement Nations, 8-7-12.

[3] Department of Energy, LNG Export Study, 12-5-12.

[4] Federal Register, Vol. 79, No. 158, 8-15-14.

[5] Freeport: FERC records show that FERC authorization was granted on 7-31-14, and DOE’s NFTA approval was granted on 11-14-14; Cove Point: FERC records show that FERC authorization was granted on 9-29-14, and DOE’s approval was granted on 5-7-15.

[6] FERC and DOE records.

[7] American Petroleum Institute, U.S. Liquefied Natural Gas Exports.

[8] Rep. Bill Johnson, 1-28-15.

[9] William O’Keefe, “An inviting opportunity for the American energy renaissance,” 3-22-15.