The U.S. Department of Energy (DOE) announced the removal of additional regulatory barriers standing in the way of unleashing U.S. liquefied natural gas (LNG) exports. DOE has rescinded a Biden-era policy statement that required authorized LNG exporters to meet stringent criteria before the agency would consider a request to extend a commencement date for an approved project. This policy statement added unnecessary red tape to the extensive LNG export permitting process and made it more difficult for operators of approved projects to obtain necessary extensions.
“I am glad to sign this action to return to common-sense policy on reviewing commencement date extension requests. Throughout the past few years, many factors, including the actions of the prior administration, have made it unnecessarily rigid to obtain and maintain an authorization to export U.S. LNG to non-free trade agreement countries,” said Tala Goudarzi, Principal Deputy Assistant Secretary of the Office of Fossil Energy and Carbon Management.
In rescinding this policy statement, issued in April 2023, DOE is removing a regulatory barrier for LNG exporters. As was its prior practice, DOE will again review requests to extend the commencement date of non-free trade agreement export authorizations on a case-by-case basis instead of requiring authorized exporters to meet stringent criteria before DOE would consider approving the request, including that the associated export project be under construction, and the authorization holder needed to demonstrate that extenuating circumstances outside its control prevented the commencement of exports within 7 years.
Background:
DOE’s authorizations for natural gas exports to non-free trade agreement countries usually require exporters to commence exports within seven years of authorization to allow time for the financing and construction of the associated export facility. While many projects are able to commence exports within 7 years of obtaining their DOE authorization, authorization holders can request additional time to commence exports based on the facts and circumstances of their project development.
In April 2023, DOE issued a policy statement that required that projects seeking a commencement deadline extension must both be under construction and be able to demonstrate that extenuating circumstances outside the authorization holder’s control prevented the commencement of exports within seven years.
With this action, DOE is rescinding the policy that required those criteria to be met before considering a commencement extension request and will again evaluate such requests on a case-by-case basis.
The rescission of this 2023 policy statement marks the sixth LNG-related issuance from DOE since President Trump took office. This comes following an?export approval to Commonwealth LNG on February 14, an order on rehearing removing barriers for the use of LNG as bunkering fuel?announced on February 28, an?approval providing the Golden Pass LNG?terminal more time to commence exports issued on March 5, another approval granting the Delfin LNG project additional time to commence exports issued on March 10, and an export approval to CP2 LNG on March 19.
