Should Agencies be Held to a Timeline in Making Decisions About LNG Export Facilities? (H.R. 89)

What is H.R. 89?

(Updated July 18, 2017)

If a proposed facility also has to obtain approval from the Federal Energy Regulatory Commission (FERC) or the U.S. Maritime Administration, then the DOE must issue a final decision within 30 days of:

• The conclusion of the review to site, construct, expand, or operate the LNG facilities required by the National Environmental Policy Act of 1969 (NEPA);

• This legislation’s enactment.

NEPA reviews would be considered concluded 30 days after a Final Environmental Impact Statement or a Finding of No Significant Impact has been published. Also, if an application is found to be eligible for a categorical exclusion, that would conclude NEPA reviews.

The U.S. Court of Appeals for the circuit in which the export facility would be located would have jurisdiction over civil actions reviewing DOE orders and decisions. This means that it would also be responsible for ensuring the DOE’s compliance with deadlines put forward in this legislation. The Court could expedite the consideration of actions against the DOE for failing to issue a decision within the specified timelines.

As a condition of an application's approval — the Secretary of Energy would require that the applicant publicly disclose the destination(s) of LNG exports from the facility. It also eliminates additional requirements placed on exports to countries that the U.S. doesn’t have a free trade agreement with.

Argument in favor

If the U.S. is going to capitalize on its natural gas reserves, it needs LNG export facilities. Federal agencies shouldn’t be able to delay export applications by not issuing final decisions, and setting deadlines gives applicants more certainty.

Argument opposed

There needs to be leeway for federal agencies to extend the environmental review process, as some proposed LNG export facilities could require more analysis. Besides, LNG exports may not be in the best interest of domestic energy markets.

Impact

Applicants for LNG export facilities and their prospective or current employees, the Dept. of Energy, FERC, U.S. Circuit Courts, and the Secretary of Energy.

Cost of H.R. 89

A CBO cost estimate is unavailable.

Additional Info

In-Depth: After introducing this legislation, Rep. Jim Bridenstine (R-OK) praised the economic and diplomatic benefits, as it would allow the U.S. to:

“Provide our allies in Eastern Europe with a secure energy supply and simultaneously increase our national security by eliminating a major source of government revenue for a major geopolitical foe. This bill will also empower the private sector to create well-paying American jobs and spur economic growth by harnessing our nation’s energy resources and removing federal impediments to foreign markets.”

Similar legislation passed the House by a vote of 277 to 133 in January 2015, leading the Obama administration — particularly the DOE — to say that it would comply with the legislation if it becomes law. This bill’s predecessor in the 113th Congress passed in the House following a 266 to 150 vote.

Of Note: America’s recent domestic energy boom has largely been driven by shale formations — which yield oil and natural gas reserves accessible through innovations in extraction technologies. Over the past six years (as of 2015), increased energy production has added $300 billion to the U.S. economy and created 2 million jobs. In 2013 alone there were new natural gas reserves discovered that totaled 53 trillion cubic feet.

The future of energy consumption in the U.S. has been dramatically altered by this shift, especially as it relates to natural gas. The Energy Information Administration, which tracks trends in energy production and consumption in the U.S., anticipates that natural gas, renewable energy sources, and liquid biofuels will provide for a greater share of U.S. energy consumption as petroleum declines.

LNG exports would offer two major benefits. It would boost the U.S. economy through the construction and staffing of export facilities, such as the $12 billion Sabine Pass facility in Louisiana (which transitioned from an import facility as U.S. reserves increased). Exporting natural gas would also help U.S. trade partners in Europe and Asia, especially as Russia has diverted its natural gas pipelines from Ukraine to Turkey, threatening western Europe’s supply.

However, there are concerns that exporting natural gas could slightly increase domestic prices. This is in addition to concerns about the extraction process and fracking’s potential impact on water sources. While natural gas emits fewer greenhouse gases than petroleum and coal, it is still not as “green” as renewable sources.

Media:

• Sponsoring Rep. Jim Bridenstine (R-OK) Press Release
• LNG Law Blog
• Conservative Review (In Favor)
• American Petroleum Institute (Context)

Summary by Eric Revell
(Photo Credit: Flickr user kees torn)