The U.S. Department of Energy (DOE) will no longer issue separate authorizations for short-term liquefied natural gas (LNG) exports, which now are to be covered by long-term licenses, according to a policy change that took effect on Tuesday. 

The move comes only days before President-elect Biden is to be sworn in and come as part of a last minute push by the Trump administration to clear regulatory hurdles for the LNG industry. 

“This policy is a sensible and concrete way DOE can remove unnecessary regulatory burdens for LNG exporters,” said Secretary Dan Brouillette. The deregulatory measure, according to DOE, would lead to “administrative efficiency” and cut out a “duplicative requirement” for LNG exports to have authorization for both short- and long-term deals. 

The policy change also applies to compressed natural gas and compressed gas liquids. Future long-term export authorizations now cover the same approved volumes of export transactions with terms of under two years. DOE also said it would amend existing export licenses to include such authorizations.

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“We are increasingly seeing more sales of LNG on the spot market, and this action by DOE is allowing more flexibility for U.S. LNG exporters,” said Deputy Secretary of Energy Mark W. Menezes. “With this policy, U.S. LNG exporters can let the market — not our regulatory process — determine which LNG cargoes will be exported under long-term or short-term agreements on the spot market.”

The policy change, published in the Federal Register, comes as LNG prices in Asia have skyrocketed. The Japan-Korea Marker spot price jumped 15% day/day on Tuesday to hit a record $32.494/MMBtu amid a brutal cold snap and supply shortage that’s left Asian buyers increasingly turning to Atlantic Basin supplies. The assessment is the highest on record since the benchmark was established in 2009.  

LNG produced in the United States is among some of the highest-cost fuel for Asia, especially given the long distances to deliver it. However, a rash of supply outages across the globe combined with severe winter weather is benefiting producers in the United States and elsewhere in the Atlantic. According to data intelligence firm Kpler, 42% of  LNG imports in eastern Asia last month came from the spot market, a monthly record for China, Japan, South Korea and Taiwan.

DOE’s latest policy shift also comes after a push to extend long-term export licenses to 30 years from 20 years. Since November, DOE has extended the licenses of more than 20 facilities that are operating or under development.