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DOE Panel Recommends Expedited LNG Exports, NEPA Review

A task force at the Department of Energy (DOE) has come up with a list of four recommendations for the department to follow, including expediting approval of small-scale liquefied natural gas (LNG) exports, and conducting a review of National Environmental Policy Act (NEPA) regulations and how they are implemented.

The recommendations stem from an executive order (EO) signed by President Trump in late March. The EO called for, among other things, DOE and other government agencies to review all existing regulations and orders that could potentially hamper domestic energy development, including oil and natural gas.

In a final report issued Oct. 24, DOE's Regulatory Reform Task Force reaffirmed a rule it first proposed last September, which called for DOE to issue an export authorization for any complete application that proposes exports of up to 140 MMcf/d, and which do not require an environmental impact statement under NEPA.

On NEPA itself, the task force recommended that DOE reform the NEPA process for permitting and export applications, including for LNG and infrastructure. The task force called for a "review of existing NEPA policies to assess whether DOE should grant more categorical exclusions." It also recommended that DOE adopt "categorical exclusions already approved by other federal agencies, and foster interagency collaboration, such as working with the Bureau of Land Management to consider categorical exclusions for geothermal energy on federal lands."

The last two recommendations involve DOE's National Laboratories and its appliance standards program. Specifically, the task force identified several areas for reform at the labs to make them operate more efficiently. It also recommended that DOE review its process rule from 1996, and consider ditching a requirement that it evaluate existing standards at least once every six years.

"Many stakeholders, including manufacturers and small businesses, regard as overly burdensome and unnecessary the statutory requirement to reconsider standards at least once every six years," DOE said. "The current six-year review process may not provide adequate time for such a retrospective analysis, which is critical to determine whether energy conservation standards are working as intended and the underlying assumptions are sound."

Instead of a review every six years, the task force recommended that DOE consider enacting "no amended standards" determinations if data shows small energy savings would require significant upfront cost to achieve. It also encouraged the department to consider "voluntary, non-regulatory and market-based alternatives" to standard-setting.

DOE Secretary Rick Perry said the department "will promote job creation and economic growth, unleash American energy dominance, and advance the energy security of our international trading partners...I look forward to the president's review of our recommendations, and to freeing the energy sector from unnecessary regulatory burdens."

On Thursday, the Center for Liquefied Natural Gas (CLNG), which backs increased LNG exports, said it welcomed the task force's report and its recommendations.

"We applaud DOE and Secretary Perry for recognizing the need to reform NEPA and ease regulatory hurdles that have only hindered the export process," said CLNG Executive Director Charlie Riedl. "We look forward to working with them to help revise the NEPA process while maintaining the industry's excellent safety and environmental records.

"U.S. LNG is providing high paying jobs, billions in investment right at home, and fuel security and choice for allies and partners abroad.  A streamlined and clear path forward will allow U.S. LNG to reach its full potential."

Earlier this month, U.S. Sens. Bill Cassidy (R-LA) and Marco Rubio (R-FL) introduced the Small Scale LNG Access Act, which calls for codifying the DOE's proposed rule on expediting LNG exports.

In a related matter, the EO rescinded guidance unveiled during the Obama administration that federal agencies quantify the effects of greenhouse gas emissions, through an expanded interpretation of NEPA. CLNG and the Natural Gas Supply Association had expressed support for the move.

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