The U.S. Department of Energy (DOE) plans to stop conducting environmental reviews of liquefied natural gas (LNG) export and import projects beginning in early January.
The notice was published Thursday in the Federal Register.
The decision is not expected to significantly reduce regulatory hurdles for LNG projects. They still would require extensive FERC environmental reviews for construction and operating permits, the Center for LNG’s Charlie Riedl, executive director, told NGI.
The DOE has in the past used reviews conducted by the Federal Energy Regulatory Commission under the National Environmental Policy Act (NEPA) to fulfill its obligations. The DOE would continue to advise the Commission under the new policy, Riedl said.
The policy change is part of a series of reforms made under an executive order signed by President Trump in March 2017 to reduce regulatory burdens on the domestic energy industry.
Under the policy, DOE would assess potential harms only from the point at which LNG is loaded on ships and transported. DOE previously determined that LNG shipping does not have significant environmental impacts.
DOE also would limit any potential NEPA reviews for export licenses to countries without free trade agreements (FTA) with the United States.
FERC approves LNG facility construction and operation, so DOE would not consider impacts associated with those actions, according to the notice, which is to take effect in about a month.
During the Obama administration, DOE conducted several nationwide life-cycle emissions analyses that included upstream production assessments for greenhouse gas emissions (GHG) and other environmental impacts.
“DOE then weighed them against the economic benefits of exporting domestically produced LNG when authorizing export licenses to non-FTA destinations,” the notice said. Upstream production and downstream consumption impacts “are outside the scope of DOE’s NEPA review for export license activity.”
The revised rule would deviate from the Obama administration’s policy, which DOE said went beyond the scope of NEPA requirements. Even though the policy change may not reduce permitting requirements, it would reduce some of DOE’s workload.
Still, the administration of President-elect Joseph R. Biden Jr. “may be inclined to rescind and reverse this rule,” said ClearView Energy Partners LLC analysts.
The Biden administration could also revoke a DOE rule change instituted by President Trump to extend all LNG export licenses to 2050, rather than the previous 20-year terms for non-FTA licenses, according to the ClearView team.
Riedl said he does not know if the policy could be reversed. The LNG industry, he said, is more concerned about what changes the Biden administration might make under FERC environmental reviews.
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