Time Ticking on US LNG Export Window of Opportunity

DOE also will have to address the cumulative impact of projects approved as part of the public interest determination. Projects are evaluated on a first-come, first-serve basis, and applications already in the system are given first priority. A broad range of factors are considered in the approval process, including:

  • a proposed terminal’s impact on the economy
  • job creation
  • environmental issues
  • industrial uses of gas
  • balance of trade and energy security

The interests of a wide range of stakeholders also are considered. Smith said DOE has worked to ensure its approval process is “open and transparent” and that feedback from stakeholders is acknowledged and addressed. The agency does take market pressure into account, but its priority is to make decisions on behalf of protecting the public’s interest.

When DOE writes an order – typically about 150 pages long – the agency offers not just a yes or no, but seeks to offer a “sufficient and well-reasoned” explanation behind the decision, Smith said, adding, “We seek to measure twice and cut once” to ensure good decisions are made in terms of long and short-term energy security.

More Certainty Seen in FERC Process

Kirstin Gibbs, partner with the law firm Bracewell & Giuliani LLP, sees more certainty in the Federal Energy Regulatory Commission’s (FERC’s) approval process for siting LNG export terminals, as the process is not very different from what FERC has done in the past.  The timeline for project approval hinges on several factors, including engineering complexity, environmental issues and oppositional intensity. The current project approval timeline is around three years.

FERC is ”an old hat” at being a lead agency for environmental analysis, and extensive experience working with agencies such as the U.S. Coast Guard and the Pipeline and Hazardous Materials Safety Administration on project approval, Gibbs noted. Approval of LNG export projects will get done, but will be slow due to the amount of work.

While DOE oversees the authorization process for LNG exports to FTA and non-FTA countries, the FERC oversees the approval process for LNG terminal siting. Both DOE and FERC’s jurisdiction over these processes falls under Section 3 of the Natural Gas Act.

DOE and FERC’s approval processes are separate, but the agencies do rely on records established in proceedings by each other. For example, FERC will rely on input from DOE studies on economic issues, while DOE will utilize data gathered by FERC for environmental analysis in its decision-making, said Gibbs.

FERC also oversees the pipelines connected to these terminals under Section 7 of the NGA. This process is similar to the siting process, but has slightly different standards. In this case, FERC considers if a pipeline project is in the public convenience and necessity, or if it could harm existing customers or interconnecting pipelines.  


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Dr. Tom Williams  |  February 27, 2014
US LNG is probably now well behind the curve as PRC/Korea/Japan are investing NOW in pipelines and fracking and like PRC did with HongKong Black Point Power plant - built 500mi subsea pipeline from and gas collector system for a 1000++MW power plant in HK...before the contracts could be signed to get the coal... Now PRC is getting the gas production going in west and central China...laying pipelines to Beijing and Shanghai...once in Beijing piping into Incheon is piece of cake...only question is a gas line from Incheon to Pusan by land/sea...then jump the straits to Japan...subsea again. One question - highly compressed NG or LNG by pipe PRC/Korea/Japan, I believe, have already gotten agreements regarding technologies, pipelayers, pipe production/transport, and sizing/number of pipelines...along with 25 year delivery contracts. These are easy and lucrative contracts for all three.. Russians are trying to come into the north end of Japan but their gas will probably much more expensive and not include the Koreans in the mix - kiss of death...in this commodity market system. US gas may provide a little LNG in 2016-18 until the pipelines are operating to Japan. So who would want to invest in a pipeline to NWUS/Can-BC which will be moot within 5-years, as no one in Japan would sign a 25-year supply contract for LNG and receiving gasifiers when they know the PRC gas will be there within five years. That take care of the Pacific market while Argentina is progressing for the SoAmerican market...and NoAfrica and Europe can deal with the European demands within ten years...With tankers and pipeline investments it is difficult to deal with a spot market when it is LNG vs CNG.


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