Energy Department Authorizes Freeport LNG To Export Liquefied Natural Gas

The Energy Department announced recently that it has issued two final authorizations for Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (Freeport) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States. The Freeport LNG Terminal in Quintana Island, Texas is authorized to export LNG up to the equivalent of 1.4 billion standard cubic feet per day (Bcf/d) of natural gas and 0.4 Bcf/d, for a total authorized volume of 1.8 Bcf/d, for a period of 20 years. Following the recent announcement of the procedural change, the Department evaluated the two Freeport applications after they completed the environmental review required by the National Environmental Policy Act (NEPA).

The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country. This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record production rate of 75.05 Bcf/d in 2014.

Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports “will not be consistent with the public interest.”

The Energy Department conducted an extensive, careful review of the Freeport LNG applications. Among other factors, the Department considered the economic, energy security, and environmental impacts and determined that exports at a rate of up to 1.4 Bcf/d and 0.4 Bcf/d for a period of 20 years was not inconsistent with the public interest.

The Path Forward on LNG Export Applications
The Energy Department will continue to act on applications to export LNG from the lower 48 states after completion of the review required by the National Environmental Policy Act, and when DOE has sufficient information on which to base a public interest determination. During this time, the Department will continue to monitor any market developments and assess their impact in subsequent public interest determinations as further information becomes available.