U.S. DOE completes LNG study update, announces 60-d comment period
The U.S. Department of Energy (DOE) has released an updated study of U.S. liquefied natural gas (LNG) exports. The DOE has been given the responsibility by Congress under the Natural Gas Act to evaluate the public interest of proposed exports to countries with which the United States does not have a Free Trade Agreement (FTA).
The study, released today, will have a 60-d comment period that will begin once published in the Federal Register. The public is encouraged to submit comments, which will inform how the DOE may apply the study’s findings to its public interest analysis of export applications going forward. This is consistent with the DOE’s past practice.
Additional to the study release today, and subsequent publication in the Federal Register, U.S. Energy Secretary Jennifer M. Granholm released a Secretarial Statement outlining departmental leadership’s perspective on the final study. FULL STATEMENT.
Excerpts:
“The Natural Gas Act has given the U.S. Secretary of Energy the responsibility to evaluate whether authorizations for the export of liquefied natural gas to non-free-trade-agreement countries is consistent with the “public interest.” [...] I want to take this opportunity to highlight five key findings and considerations that I think are especially relevant to help guide future Secretaries of Energy in making decisions about whether particular applications are in the public interest. Today’s publication reinforces that a business-as-usual approach is neither sustainable nor advisable.
‘DOE analysis exposes a triple-cost increase to U.S. consumers from increasing LNG exports – the increasing domestic price of the natural gas itself, increases in electricity prices (natural gas being a key input in many U.S. power markets), and the increased costs for consumers from the pass-through of higher costs to U.S. manufacturers.
‘Special scrutiny needs to be applied toward very large LNG projects. An LNG project exporting 4 billion cubic feet per day – considering its direct life cycle emissions – would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023.
‘...any sound and durable approach for considering additional authorizations should consider where those LNG exports are headed, and whether targeted guardrails may be utilized to protect the public interest.’... ‘the demand for LNG in the People’s Republic of China – already the world’s largest importer – is expected to nearly double between now and 2030 and become the highest of any country by 2050. PRC entities have already signed several contracts with operating or proposed U.S. LNG projects.
'In the decade to come, we will see strong and mounting pressure within our democratic system to ensure that the United States uses its market position in a way that truly advances our national interest and energy security, which must include the needs of American workers, American families, and our responsibility to address the climate crisis. In our view, the question is not whether U.S. export policy will be forced to respond to those interests, but when and what that response is.”
The U.S. LNG export sector has experienced transformative and unprecedented growth in just a decade, with the first LNG exports from the lower 48 states commencing in 2016. The DOE has authorized 48 Bft3d of natural gas for export, or nearly half of current domestic production.
Of this 48 Bft3d in total authorized exports, 14 Bft3d of associated capacity is now operating, making the U.S. the largest exporter of LNG in the world. Another 12 Bft3d is under construction and expected to double present export volumes by 2030, at which time the U.S. will remain the top exporter, exceeding other countries by roughly 40% based on announced expansions. And a further 22 Bft3d of capacity exports has been approved by the DOE, but has not secured a final investment decision to begin construction.
Given these robust export commitments already made, and before considering additional applications that would take authorized U.S. natural gas exports beyond levels previously evaluated, DOE leadership recognized the need for a comprehensive update to ensure the most comprehensive and up-to-date analysis possible of market, economic, national security, and environmental considerations of different potential volumes of U.S. LNG exports.
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