[Federal Register Volume 85, Number 1 (Thursday, January 2, 2020)]
[Notices]
[Pages 72-86]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28306]


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DEPARTMENT OF ENERGY

[FE Docket Nos.]


Life Cycle Greenhouse Gas Perspective on Exporting Liquefied 
Natural Gas From the United States: 2019 Update--Response to Comments

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                                                  FE Docket No.
------------------------------------------------------------------------
Sabine Pass Liquefaction, LLC.........  10-111-LNG
Freeport LNG Expansion, L.P. et al....  10-161-LNG
Lake Charles Exports, LLC.............  11-59-LNG
Dominion Cove Point LNG, LP...........  11-128-LNG
Freeport LNG Expansion, L.P. et al....  11-161-LNG
Cameron LNG, LLC......................  11-162-LNG
Southern LNG Company, LLC.............  12-100-LNG
Gulf LNG Liquefaction Company, LLC....  12-101-LNG
Jordan Cove Energy Project, L.P.......  12-32-LNG
CE FLNG, LLC..........................  12-123-LNG
Golden Pass Products, LLC.............  12-156-LNG
Lake Charles LNG Export Co............  13-04-LNG
MPEH LLC..............................  13-26-LNG
Cheniere Marketing LLC and Corpus       13-30-LNG,
 Christi Liquefaction, LLC.              13-42 LNG, &
                                         13-121-LNG
Venture Global Calcasieu Pass, LLC....  13-69-LNG, 14-88-LNG, & 15-25
                                         LNG
Eos LNG LLC...........................  13-116-LNG
Barca LNG LLC.........................  13-118-LNG
Magnolia LNG, LLC.....................  13-132-LNG
Delfin LNG, LLC.......................  13-147-LNG
Commonwealth LNG, LLC.................  13-153-LNG
SCT&E LNG, LLC........................  14-98-LNG
Pieridae Energy (USA) Ltd.............  14-179-LNG
Bear Head LNG Corporation and Bear      15-33-LNG
 Head LNG (USA).
G2 LNG LLC............................  15-45-LNG
Texas LNG Brownsville LLC.............  15-62-LNG
Sabine Pass Liquefaction, LLC.........  15-63-LNG
Cameron LNG, LLC......................  15-90-LNG
Port Arthur LNG, LLC..................  15-96-LNG
Cameron LNG, LLC......................  15-167-LNG
Rio Grande LNG, LLC...................  15-190-LNG
Venture Global Plaquemines LNG, LLC...  16-28-LNG
Freeport LNG Expansion, L.P., et al...  16-108-LNG
Lake Charles LNG Export Co............  16-109-LNG
Lake Charles Exports, LLC.............  16-110-LNG
Driftwood LNG LLC.....................  16-144-LNG
Fourchon LNG, LLC.....................  17-105-LNG
Galveston Bay LNG, LLC................  17-167-LNG
Freeport LNG Expansion, L.P., et al...  18-26-LNG
Corpus Christi Liquefaction Stage III,  18-78-LNG
 LLC.
Mexico Pacific Limited LLC............  18-70-LNG
Energ[iacute]a Liquefaction, S. de      18-144-LNG
 R.L. de C.V.
Energ[iacute]a Costa Azul, S. de R.L.   18-145-LNG
 de C.V.
Annova LNG Common Infrastructure, LLC.  19-34-LNG
Cheniere Marketing LLC and Corpus       19-124-LNG
 Christi Liquefaction, LLC.
Sabine Pass Liquefaction, LLC.........  19-125-LNG
Commonwealth LNG, LLC.................  19-134-LNG
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AGENCY: Office of Fossil Energy, Department of Energy.

ACTION: Notice of response to comments.

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SUMMARY: On September 19, 2019, the Office of Fossil Energy (FE) of the 
Department of Energy (DOE) gave notice of the availability of a study 
entitled, Life Cycle Greenhouse Gas Perspective on Exporting Liquefied 
Natural Gas from the United States: 2019 Update (LCA GHG Update or 
Update), in the above-referenced proceedings and invited the submission 
of public comments on the Update. DOE commissioned the LCA GHG Update 
to inform its decision on pending and future applications seeking 
authorization to export domestically

[[Page 73]]

produced liquefied natural gas (LNG) from the lower-48 states to 
countries with which the United States does not have a free trade 
agreement (FTA) requiring national treatment for trade in natural gas, 
and with which trade is not prohibited by U.S. law or policy (non-FTA 
countries). The LCA GHG Update includes three principal updates to 
DOE's 2014 LCA GHG Report. In this document, DOE responds to the seven 
public comments received on the LCA GHG Update and summarizes its 
conclusions on the Update. The LCA GHG Update and the public comments 
are posted on the DOE website at: https://fossil.energy.gov/app/docketindex/docket/index/21.

DATES: Applicable on December 19, 2019.

FOR FURTHER INFORMATION CONTACT: Amy Sweeney, U.S. Department of Energy 
(FE-34), Office of Regulation, Analysis, and Engagement, Office of 
Fossil Energy, Forrestal Building, Room 3E-042, 1000 Independence 
Avenue SW, Washington, DC 20585; (202) 586-2627; 
[email protected]; Cassandra Bernstein or Kari Twaite, U.S. 
Department of Energy (GC-76), Office of the Assistant General Counsel 
for Electricity and Fossil Energy, Forrestal Building, Room 6D-033, 
1000 Independence Ave. SW, Washington, DC 20585; (202) 586-9793 or 
(202) 586-6978; [email protected] or 
[email protected].

SUPPLEMENTARY INFORMATION: 
    Acronyms and Abbreviations. Acronyms and abbreviations used in this 
document are set forth below for reference.

API American Petroleum Institute
AR5 Fifth Assessment Report
Bcf/d Billion Cubic Feet per Day
Bcf/yr Billion Cubic Feet per Year
CLNG Center for Liquefied Natural Gas
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalents
DOE U.S. Department of Energy
EIA U.S. Energy Information Administration
EPA U.S. Environmental Protection Agency
FE Office of Fossil Energy, U.S. Department of Energy
FTA Free Trade Agreement
GHG Greenhouse Gas
GWP Global Warming Potential
IEA International Energy Agency
IECA Industrial Energy Consumers of America
IPCC Intergovernmental Panel on Climate Change
LCA Life Cycle Analysis
LNG Liquefied Natural Gas
MWh Megawatt-Hour
NETL National Energy Technology Laboratory
NEPA National Environmental Policy Act of 1969
NGA Natural Gas Act of 1938

Table of Contents

I. Background
    A. DOE Export Authorizations Under Section 3 of the Natural Gas 
Act
    B. Public Interest Review for Non-FTA Export Authorizations
    C. 2014 Life Cycle Greenhouse Gas Report (LCA GHG Report)
    D. Judicial Decisions Upholding DOE's Non-FTA Authorizations
II. Life Cycle Greenhouse Gas Perspective on Exporting Liquefied 
Natural Gas From the United States: 2019 Update (LCA GHG Update)
    A. Overview of the LCA GHG Update
    B. The April 2019 LCA of Natural Gas Extraction and Power 
Generation
    C. Purpose of the LCA GHG Update
    D. Study Scenarios
    E. GHGs Reported as Carbon Dioxide Equivalents
    F. Natural Gas Modeling Approach
    G. Coal Modeling Approach
    H. Key Modeling Parameters
    I. Results of the LCA GHG Update
III. Notice of Availability of the LCA GHG Update
IV. Comments on the LCA GHG Update and DOE Responses
    A. Scope of the LCA GHG Update
    B. Roles of Natural Gas and Renewable Energy
    C. Domestic Natural Gas-to-Coal Switching
    D. Global Warming Potential of Methane
    E. Methane Emission Rate of U.S. Natural Gas Production
    F. Other Aspects of NETL's Natural Gas Modeling Approach
V. Discussion and Conclusions

I. Background

A. DOE Export Authorizations Under Section 3 of the Natural Gas Act

    DOE is responsible for authorizing exports of domestically produced 
natural gas to foreign countries pursuant to section 3 of the Natural 
Gas Act (NGA), 15 U.S.C. 717b.\1\ In relevant part, section 3(c) of the 
NGA applies to applications for exports of natural gas, including LNG, 
to countries with which the United States has entered into a FTA 
requiring national treatment for trade in natural gas, and with which 
trade is not prohibited by U.S. law or policy (FTA countries).\2\ 
Section 3(c) was amended by section 201 of the Energy Policy Act of 
1992 (Pub. L. 102-486) to require that FTA applications ``shall be 
deemed to be consistent with the public interest'' and granted 
``without modification or delay.'' \3\ Therefore, DOE approves 
applications for FTA authorizations without modification or delay.\4\ 
None of the comments or discussion herein apply to FTA authorizations 
issued under NGA section 3(c).
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    \1\ The authority to regulate the imports and exports of natural 
gas, including LNG, under section 3 of the NGA (15 U.S.C. 717b) has 
been delegated to the Assistant Secretary for FE in Redelegation 
Order No. 00-002.04G issued on June 4, 2019.
    \2\ 15 U.S.C. 717b(c). The United States currently has FTAs 
requiring national treatment for trade in natural gas with 
Australia, Bahrain, Canada, Chile, Colombia, Dominican Republic, El 
Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, 
Oman, Panama, Peru, Republic of Korea, and Singapore. FTAs with 
Israel and Costa Rica do not require national treatment for trade in 
natural gas.
    \3\ 15 U.S.C. 717b(c).
    \4\ Unless otherwise stated, all references to exports of LNG 
herein refer to natural gas produced and liquefied in the lower-48 
states. Additionally, DOE uses the terms ``authorization'' and 
``order'' interchangeably.
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    For applications to export natural gas to non-FTA countries, 
section 3(a) of the NGA sets forth the following standard of review:

    [N]o person shall export any natural gas from the United States 
to a foreign country or import any natural gas from a foreign 
country without first having secured an order of the [Secretary of 
Energy \5\] authorizing it to do so. The [Secretary] shall issue 
such order upon application, unless after opportunity for hearing, 
[he] finds that the proposed exportation or importation will not be 
consistent with the public interest. The [Secretary] may by [the 
Secretary's] order grant such application, in whole or part, with 
such modification and upon such terms and conditions as the 
[Secretary] may find necessary or appropriate.\6\
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    \5\ The Secretary's authority was established by the Department 
of Energy Organization Act, 42 U.S.C. 7172, which transferred 
jurisdiction over imports and export authorizations from the Federal 
Power Commission to the Secretary of Energy.
    \6\ 15 U.S.C. 717b(a) (emphasis added).

    DOE--as affirmed by the D.C. Circuit--has consistently interpreted 
NGA section 3(a) as creating a rebuttable presumption that a proposed 
export of natural gas is in the public interest.\7\ Accordingly, DOE 
will conduct an informal adjudication and grant a non-FTA application 
unless DOE finds that the proposed exportation will not be consistent 
with the public interest.\8\ Before reaching a final decision, DOE must 
also comply with the National

[[Page 74]]

Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq.
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    \7\ See Sierra Club v. U.S. Dep't of Energy, 867 F.3d 189, 203 
(D.C. Cir. 2017) (``We have construed [NGA section 3(a)] as 
containing a `general presumption favoring [export] authorization.' 
'') (quoting W. Va. Pub. Serv. Comm'n v. U.S. Dep't of Energy, 681 
F.2d 847, 856 (D.C. Cir. 1982)).
    \8\ See id. (``there must be `an affirmative showing of 
inconsistency with the public interest' to deny the application'' 
under NGA section 3(a)) (quoting Panhandle Producers & Royalty 
Owners Ass'n v. Econ. Regulatory Admin., 822 F.2d 1105, 1111 (D.C. 
Cir. 1987)). As of August 24, 2018, qualifying small-scale exports 
of natural gas to non-FTA countries are treated differently--
specifically, they are deemed to be consistent with the public 
interest under NGA section 3(a). See 10 CFR 590.102(p); 10 CFR 
590.208(a); see also U.S. Dep't of Energy, Small-Scale Natural Gas 
Exports; Final Rule, 83 FR 35106 (July 25, 2018).
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B. Public Interest Review for Non-FTA Export Authorizations

    Although NGA section 3(a) establishes a broad public interest 
standard and a presumption favoring export authorizations, the statute 
does not define ``public interest'' or identify criteria that must be 
considered. In prior decisions, DOE has identified a range of factors 
that it evaluates when reviewing an application to export LNG to non-
FTA countries. These factors include economic impacts, international 
impacts, security of natural gas supply, and environmental impacts, 
among others. To conduct this review, DOE looks to record evidence 
developed in the application proceeding.
    DOE's prior decisions have also looked to certain principles 
established in its 1984 Policy Guidelines.\9\ The goals of the 1984 
Policy Guidelines are to minimize federal control and involvement in 
energy markets and to promote a balanced and mixed energy resource 
system. Specifically, the 1984 Policy Guidelines state that ``[t]he 
market, not government, should determine the price and other contract 
terms of imported [or exported] gas,'' and that DOE's ``primary 
responsibility in authorizing imports [or exports] should be to 
evaluate the need for the [natural] gas and whether the import [or 
export] arrangement will provide the gas on a competitively priced 
basis for the duration of the contract while minimizing regulatory 
impediments to a freely operating market.'' \10\ Although the Policy 
Guidelines are nominally applicable to natural gas import cases, DOE 
held in DOE/FE Order No. 1473 that the 1984 Policy Guidelines should be 
applied to natural gas export applications.\11\
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    \9\ New Policy Guidelines and Delegations Order Relating to 
Regulation of Imported Natural Gas, 49 FR 6684 (Feb. 22, 1984) 
[hereinafter 1984 Policy Guidelines].
    \10\ Id. at 49 FR 6685.
    \11\ Phillips Alaska Natural Gas Corp., et al., DOE/FE Order No. 
1473, FE Docket No. 96-99-LNG, Order Extending Authorization to 
Export Liquefied Natural Gas from Alaska (Apr. 2, 1999), at 14 
(citing Yukon Pacific Corp., DOE/FE Order No. 350, Order Granting 
Authorization to Export Liquefied Natural Gas from Alaska, 1 FE ] 
70,259, 71,128 (1989)).
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    In Order No. 1473, DOE stated that it was guided by DOE Delegation 
Order No. 0204-111. That delegation order directed the regulation of 
exports of natural gas ``based on a consideration of the domestic need 
for the gas to be exported and such other matters as the Administrator 
[of the Economic Regulatory Administration] finds in the circumstances 
of a particular case to be appropriate.'' \12\
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    \12\ DOE Delegation Order No. 0204-111 (Feb. 22, 1984), at 1 (] 
(b)); see also 1984 Policy Guidelines, 49 FR 6690 (incorporating DOE 
Delegation Order No. 0204-111). In February 1989, the Assistant 
Secretary for Fossil Energy assumed the delegated responsibilities 
of the Administrator of the Economic Regulatory Administration. See 
Applications for Authorization to Construct, Operate, or Modify 
Facilities Used for the Export or Import of Natural Gas, 62 FR 
30435, 30437 n.15 (June 4, 1997) (citing DOE Delegation Order No. 
0204-127, 54 FR 11436 (Mar. 20, 1989)).
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    Although DOE Delegation Order No. 0204-111 is no longer in effect, 
DOE's review of export applications has continued to focus on: (i) The 
domestic need for the natural gas proposed to be exported, (ii) whether 
the proposed exports pose a threat to the security of domestic natural 
gas supplies, (iii) whether the arrangement is consistent with DOE's 
policy of promoting market competition, and (iv) any other factors 
bearing on the public interest described herein.
    Under this public interest standard, DOE has issued 38 final long-
term authorizations to export domestically produced (or U.S.) LNG or 
compressed natural gas to non-FTA countries.\13\ The cumulative volume 
of approved non-FTA exports under these authorizations is 38.06 billion 
cubic feet per day (Bcf/d) of natural gas, or 13.9 trillion cubic feet 
per year.\14\ Each of these non-FTA orders authorize an export term of 
20 years.
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    \13\ See Venture Global Plaquemines LNG, LLC, DOE/FE Order No. 
4446, FE Docket No. 16-28-LNG, Opinion and Order Granting Long-Term 
Authorization to Export Liquefied Natural Gas to Non-Free Trade 
Agreement Nations, at 43 (Oct. 15, 2019).
    \14\ See id.
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C. 2014 Life Cycle Greenhouse Gas Report (LCA GHG Report)

    In 2014, DOE commissioned the National Energy Technology Laboratory 
(NETL), a DOE applied research laboratory, to conduct an analysis 
calculating the life cycle greenhouse gas (GHG) emissions for LNG 
exported from the United States. DOE commissioned this life cycle 
analysis (LCA) to inform its public interest review of non-FTA 
applications, as part of its broader effort to evaluate different 
environmental aspects of the LNG production and export chain.
    DOE sought to determine: (i) How domestically-produced LNG exported 
from the United States compares with regional coal (or other LNG 
sources) for electric power generation in Europe and Asia from a life 
cycle GHG perspective, and (ii) how those results compare with natural 
gas sourced from Russia and delivered to the same markets via pipeline. 
In June 2014, DOE published NETL's report entitled, Life Cycle 
Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the 
United States (2014 LCA GHG Report or 2014 Report).\15\ Subsequently, 
DOE received public comments on the 2014 LCA GHG Report and responded 
to those comments in non-FTA orders.\16\ DOE has relied on the 2014 
Report in its review of all subsequent applications to export LNG to 
non-FTA countries.\17\
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    \15\ Dep't of Energy, Life Cycle Greenhouse Gas Perspective on 
Exporting Liquefied Natural Gas From the United States, 79 FR 32260 
(June 4, 2014). DOE announced the availability of the LCA GHG Report 
on its website on May 29, 2014.
    \16\ See, e.g., Golden Pass Products LLC, DOE/FE Order No. 3978, 
FE Docket No. 12-156-LNG, Opinion and Order Granting Long-Term, 
Multi-Contract Authorization to Export Liquefied Natural Gas by 
Vessel From the Golden Pass LNG Terminal Located in Jefferson 
County, Louisiana, to Non-Free Trade Agreement Nations, at 102-28 
(Apr. 25, 2017) (description of LCA GHG Report and response to 
comments).
    \17\ See, e.g., Venture Global Plaquemines LNG, LLC, DOE/FE 
Order No. 4446, at 14-15, 38-41.
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D. Judicial Decisions Upholding DOE's Non-FTA Authorizations

    Beginning in 2015, Sierra Club petitioned the U.S. Court of Appeals 
for the District of Columbia Circuit (D.C. Circuit or the Court) for 
review of five long-term LNG export authorizations issued by DOE under 
the standard of review described above. Sierra Club challenged DOE's 
approval of LNG exports to non-FTA countries from projects proposed or 
operated by the following authorization holders: Freeport LNG 
Expansion, L.P., et al.; Dominion Energy Cove Point LNG, LP (formerly 
Dominion Cove Point LNG, LP); Sabine Pass Liquefaction, LLC; and 
Cheniere Marketing, LLC, et al. The D.C. Circuit subsequently denied 
four of the five petitions for review: One in a published decision 
issued on August 15, 2017 (Sierra Club I),\18\ and three in a 
consolidated, unpublished opinion issued on November 1, 2017 (Sierra 
Club II).\19\ Sierra Club subsequently withdrew its fifth and remaining 
petition for review.\20\
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    \18\ Sierra Club vs. U.S. Dep't of Energy, 867 F.3d 189 (Aug. 
15, 2017) (denying petition of review of the LNG export 
authorization issued to Freeport LNG Expansion, L.P., et al.).
    \19\ Sierra Club v. U.S. Dep't of Energy, Nos. 16-1186, 16-1252, 
16-1253, 703 Fed. Appx. 1 (D.C. Cir. Nov. 1, 2017) (denying 
petitions of review of the LNG export authorization issued to 
Dominion Cove Point LNG, LP; Sabine Pass Liquefaction, LLC; and 
Cheniere Marketing, LLC, et al., respectively).
    \20\ See Sierra Club v. U.S. Dep't of Energy, No. 16-1426, Per 
Curiam Order (D.C. Cir. Jan. 30, 2018) (granting Sierra Club's 
unopposed motion for voluntarily dismissal).
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    In Sierra Club I, the D.C. Circuit concluded that DOE had complied 
with both NGA section 3(a) and NEPA in

[[Page 75]]

issuing the challenged non-FTA authorization. Freeport LNG Expansion, 
L.P. and its related entities (collectively, Freeport) had applied to 
DOE for authorization to export LNG to non-FTA countries from the 
Freeport Terminal located on Quintana Island, Texas. DOE granted the 
application in 2014 in a volume equivalent to 0.4 Bcf/d of natural gas, 
finding that Freeport's proposed exports were in the public interest 
under NGA section 3(a). DOE also considered and disclosed the potential 
environmental impacts of its decision under NEPA. Sierra Club 
petitioned for review of the Freeport authorization, arguing that DOE 
fell short of its obligations under both the NGA and NEPA. The D.C. 
Circuit rejected Sierra Club's arguments in a unanimous decision, 
holding that, ``Sierra Club has given us no reason to question the 
Department's judgment that the [Freeport] application is not 
inconsistent with the public interest.'' \21\
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    \21\ Sierra Club I, 867 F.3d at 203.
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    As relevant here, the D.C. Circuit rejected Sierra Club's challenge 
to DOE's analysis of the potential ``downstream'' GHG emissions 
resulting from the transport and usage of U.S. LNG abroad, set forth in 
the 2014 LCA GHG Report.\22\ The Court pointed out that Sierra Club did 
not challenge the method employed in the LCA GHG Report to evaluate 
such GHG emissions, but instead argued that DOE ``should have evaluated 
additional variables'' as part of the analysis.\23\ Specifically, 
Sierra Club asserted that DOE should have considered the potential for 
LNG to compete with renewable sources of energy (or ``renewables''), 
which Sierra Club argued are prevalent in certain import markets. The 
D.C. Circuit rejected this argument, finding that ``Sierra Club's 
complaint `falls under the category of flyspecking.' '' \24\ The Court 
further held there was ``nothing arbitrary about [DOE's] decision'' in 
the 2014 LCA GHG Report to compare emissions from exported U.S. LNG to 
emissions of coal or other sources of natural gas, rather than a 
variety of other possible fuel sources with which U.S. LNG might 
compete in importing nations.\25\
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    \22\ Id. at 201-02.
    \23\ Id. at 202.
    \24\ Id. (citing Myersville Citizens for a Rural Cmty., Inc. v. 
FERC, 783 F.3d 1301, 1324 (D.C. Cir. 2015)).
    \25\ Id.
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    In the consolidated opinion in Sierra Club II issued on November 1, 
2017, the D.C. Circuit ruled that ``[t]he court's decision in [Sierra 
Club I] largely governs the resolution of the [three] instant cases.'' 
\26\ Upon its review of the remaining ``narrow issues'' in those cases, 
the Court again rejected Sierra Club's arguments under the NGA and 
NEPA, and upheld DOE's actions in issuing the non-FTA authorizations in 
those proceedings.\27\
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    \26\ Sierra Club, 703 Fed. Appx. 1 at * 2.
    \27\ Id.
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    The D.C. Circuit's decisions in Sierra Club I and II--including the 
Court's holding on the 2014 LCA GHG Report--continue to guide DOE's 
review of applications to export LNG to non-FTA countries.

II. Life Cycle Greenhouse Gas Perspective on Exporting Liquefied 
Natural Gas From the United States: 2019 Update (LCA GHG Update)

    In 2018, DOE commissioned NETL to conduct an update to the 2014 LCA 
GHG Report, referred to as the LCA GHG Update.\28\ As with the 2014 
Report, the LCA GHG Update compares life cycle GHG emissions of exports 
of domestically produced LNG to Europe and Asia, compared with 
alternative fuel sources (such as regional coal and other imported 
natural gas) for electric power generation in the destination 
countries. Although core aspects of the analysis--such as the scenarios 
investigated--are the same as the 2014 Report, NETL included three 
principal updates in the LCA GHG Update. In this section, we summarize 
the scope of the LCA GHG Update, as well as its methods, limitations, 
and conclusions.
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    \28\ Nat'l Energy Technology Laboratory, Life Cycle Greenhouse 
Gas Perspective on Exporting Liquefied Natural Gas from the United 
States: 2019 Update (DOE/NETL 2019/2041) (Sept. 12, 2019), available 
at: https://www.energy.gov/sites/prod/files/2019/09/f66/2019%20NETL%20LCA-GHG%20Report.pdf. Although the LCA GHG Update is 
dated September 12, 2019, DOE announced the availability of the LCA 
GHG Update on its website and in the Federal Register on September 
19, 2019.
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A. Overview of the LCA GHG Update

    In commissioning the LCA GHG Update, DOE sought information on the 
same two questions presented in the 2014 LCA GHG Report:
     How does domestically produced LNG exported from the 
United States compare with regional coal (or other LNG sources) used 
for electric power generation in Europe and Asia, from a life cycle GHG 
perspective?
     How do those results compare with natural gas sourced from 
Russia and delivered via pipeline to the same European and Asian 
markets? \29\
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    \29\ See id. at 1.
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    To evaluate these questions on the basis of more current 
information, NETL made the following three updates to the 2014 LCA GHG 
Report:
     Incorporated NETL's most recent characterization of 
upstream natural gas production, set forth in NETL's April 2019 report 
entitled, Life Cycle Analysis of Natural Gas Extraction and Power 
Generation (April 2019 LCA of Natural Gas Extraction and Power 
Generation); \30\
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    \30\ Nat'l Energy Technology Laboratory, Life Cycle Analysis of 
Natural Gas Extraction and Power Generation (DOE/NETL-2019/2039) 
(Apr. 19, 2019), available at: https://www.netl.doe.gov/energy-analysis/details?id=3198 [hereinafter April 2019 LCA of Natural Gas 
Extraction and Power Generation].
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     Updated the unit processes for liquefaction, ocean 
transport, and regasification characterization using engineering-based 
models and publicly-available data informed and reviewed by existing 
LNG export facilities, where possible; and
     Updated the 100-year global warming potential (GWP) for 
methane (CH4) to reflect the current Intergovernmental Panel 
on Climate Change's (IPCC) Fifth Assessment Report (AR5).\31\
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    \31\ See LCA GHG Update at 1 (citing IPCC. 2013. Climate Change 
2013 The Physical Science Basis. Intergovernmental Panel on Climate 
Change, available at: http://www.climatechange2013.org/report/).
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    In all other respects, the 2019 LCA GHG Update is unchanged from 
the 2014 Report.

B. The April 2019 LCA of Natural Gas Extraction and Power Generation

    The primary component of natural gas is methane, a type of GHG. The 
methane emission rate--sometimes referred to as the methane leakage 
rate \32\--represents methane emissions released to the air through 
venting, fugitives, combustion, or other sources per unit of natural 
gas delivered to end users. For example, emissions of methane during 
the production, processing, transmission, and delivery of natural gas 
were 25% of total U.S. methane emissions in 2016 (the most recent year 
for which adequate data are available), and were 2.8% of all GHGs when 
comparing GHGs on a 100[hyphen]year time frame.\33\ The methane 
emission rate varies with the source of natural gas, due to the 
variability among geographic locations of natural gas[hyphen]bearing 
formations and the different technologies used to extract natural 
gas.\34\
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    \32\ Because Sierra Club uses the term ``methane leakage rate'' 
instead of methane emission rate in its Comments, we use the terms 
interchangeably for purposes of this document.
    \33\ See April 2019 LCA of Natural Gas Extraction and Power 
Generation, at 3 (citation omitted).
    \34\ See id. at 1, 3-4, 76.
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    To evaluate changes in the scientific knowledge of methane and 
other GHG emissions associated with natural gas

[[Page 76]]

systems, NETL updates its LCA of Natural Gas Extraction and Power 
Generation every two to three years. NETL published the most recent 
version of this LCA on April 19, 2019.\35\ The April LCA informs the 
LCA GHG Update in this proceeding, which in turn was published on 
September 12, 2019.\36\
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    \35\ See supra at note 30.
    \36\ See, e.g., LCA GHG Update at 1, 4.
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    Expanding upon NETL's previous LCAs of natural gas systems, the 
April 2019 LCA of Natural Gas Extraction and Power Generation provides 
a complete inventory of emissions to air and water, water consumption, 
and land use change.\37\ It also evaluates the GHG emissions across the 
entire natural gas supply chain--including production, gathering and 
boosting, processing, transmission and storage, and distribution of 
natural gas to consumers.
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    \37\ See April 2019 LCA of Natural Gas Extraction and Power 
Generation at 3 (stating that ``GHGs are not the only metric that 
should be considered when comparing energy options, so this analysis 
also includes a full inventory of air emissions, water use and 
quality, and land use.'').
---------------------------------------------------------------------------

    For this LCA, NETL developed 30 scenarios as a way to better 
understand variability in natural gas systems. The results were 
generated using a model made up of 140 sources of emissions to account 
for different types of variability. Among other findings, NETL 
determined that the top contributors to carbon dioxide and methane 
emissions are combustion exhaust and other venting from compressor 
systems.\38\ Additionally, NETL calculated a national average methane 
emission rate (or leakage rate) of 1.24%.\39\ However, if the modeling 
boundaries end after pipeline transmission--which is the case for 
large-scale end users like power plants and liquefaction terminals--
NETL calculated an average methane emission rate of 1.08%.\40\
---------------------------------------------------------------------------

    \38\ Id. at 1.
    \39\ Id. (95% confidence interval ranging from 0.84% to 1.76%); 
see also id. at 76-77 & Exh. 6-2.
    \40\ Id. at 77 (Exh. 6-2).
---------------------------------------------------------------------------

C. Purpose of the LCA GHG Update

    At the time of the 2014 LCA GHG Report, NETL considered one medium-
distance destination (a location in Europe) and one long-distance 
destination (a location in Asia), since the exact destination countries 
for U.S. LNG exports could not be predicted at the time.\41\ 
Specifically, NETL applied its LCA model to represent: (1) 
Unconventional natural gas production and transportation to a U.S. Gulf 
Coast liquefaction facility (Gulf Coast facility), (2) liquefaction of 
the natural gas at the Gulf Coast facility, (3) transportation of the 
LNG to an import terminal in Rotterdam, Netherlands, to represent a 
European market; and (4) transportation of the LNG to an import 
terminal in Shanghai, China, to represent Asian markets.\42\ At the 
time of the LCA GHG Update, those choices were still valid based on 
U.S. LNG exports to date.\43\
---------------------------------------------------------------------------

    \41\ See LCA GHG Update at 2 n.1.
    \42\ See id.
    \43\ See, e.g., U.S. Dep't of Energy, LNG Annual Report 2018, at 
1-2 (Feb. 15, 2019), available at: https://www.energy.gov/fe/downloads/lng-annual-report-2018 (shipments of domestically produced 
LNG delivered from February 2016 through December 2018).
---------------------------------------------------------------------------

    NETL determined that one of the most likely uses of U.S. LNG is to 
generate electric power in the destination countries. Accordingly, NETL 
used a parametric model for the scenarios to account for variability in 
supply chain characteristics and power plant efficiencies. In 
considering sources of fuel other than U.S. LNG, NETL assumed that 
producers in Europe and Asia could generate electricity in the 
following ways: (1) By obtaining natural gas from a local or regional 
pipeline, (2) by obtaining LNG from a LNG producer located closer 
geographically than the United States, or (3) by using regional coal 
supplies, foregoing natural gas altogether.\44\
---------------------------------------------------------------------------

    \44\ See LCA GHG Update at 2-3.
---------------------------------------------------------------------------

    Using this framework, NETL developed four study scenarios, 
identified below. To compare scenarios, NETL used a common denominator 
as the end result for each scenario: One megawatt-hour (MWh) of 
electricity delivered to the consumer, representing the final 
consumption of electricity. Additionally, NETL considered GHG emissions 
from all processes in the LNG supply chains--from the ``cradle'' when 
natural gas or coal is extracted from the ground, to the ``grave'' when 
electricity is used by the consumer. This method of accounting for 
cradle-to-grave emissions over a single common denominator is known as 
a life cycle analysis, or LCA.\45\
---------------------------------------------------------------------------

    \45\ The data used in the LCA GHG Update were originally 
developed to represent U.S. energy systems. To apply the data to 
this study, NETL adapted its natural gas and coal LCA models. The 
five life cycle stages used by NETL (or ``LC Stages''), ranging from 
Raw Material Acquisition to End Use, are identified in the LCA GHG 
Update at 2.
---------------------------------------------------------------------------

    Using this LCA approach, NETL's objective was to model realistic 
LNG export scenarios--encompassing locations at both a medium and long 
distance from the United States--while also considering local fuel 
alternatives. The purpose of the medium and long distance scenarios was 
to establish likely results for both extremes (i.e., both low and high 
bounds).\46\
---------------------------------------------------------------------------

    \46\ See id. at 2 n.1.
---------------------------------------------------------------------------

D. Study Scenarios

    NETL identified four modeling scenarios to capture the cradle-to-
grave process for both the European and Asian cases. The scenarios vary 
based on where the fuel (natural gas or coal) comes from and how it is 
transported to the power plant. For this reason, the beginning 
``cradle'' of each scenario varies, whereas the end, or ``grave,'' of 
each scenario is the same because the uniform goal is to produce 1 MWh 
of electricity. The first three scenarios explore different ways to 
transport natural gas; the fourth provides an example of how regional 
coal may be used to generate electricity, as summarized in Table 1:

[[Page 77]]



            Table 1--LCA GHG Scenarios Analyzed by NETL \47\
------------------------------------------------------------------------
       Scenario               Description            Key assumptions
------------------------------------------------------------------------
1.....................   Natural gas is  The power plant is
                         extracted in the         located near the LNG
                         United States from       import site.
                         Appalachian Shale.
                         It is
                         transported by
                         pipeline to an LNG
                         facility, where it is
                         cooled to liquid form,
                         loaded onto a LNG
                         tanker, and
                         transported to a LNG
                         port in the receiving
                         country (Rotterdam,
                         Netherlands, for the
                         European case and
                         Shanghai, China, for
                         the Asian case).
                         Upon reaching
                         its destination, the
                         LNG is re-gasified,
                         then transported to a
                         natural gas power
                         plant.
2.....................   Same as         Unlike Scenario 1, the
                         Scenario 1, except       regional gas is
                         that the natural gas     produced using
                         comes from a regional    conventional
                         source closer to the     extraction methods,
                         destination.             such as vertical wells
                         In the           that do not use
                         European case, the       hydraulic fracturing.
                         regional source is       The LNG tanker
                         Oran, Algeria, with a    transport distance is
                         destination of           adjusted accordingly.
                         Rotterdam.
                         In the Asian
                         case, the regional
                         source is Darwin,
                         Australia, with a
                         destination of
                         Shanghai, China.
3.....................   Natural gas is  The pipeline distance
                         produced in the Yamal    was calculated based
                         region of Siberia,       on a ``great circle
                         Russia, using            distance'' (the
                         conventional             shortest possible
                         extraction methods       distance between two
                         \48\.                    points on a sphere)
                         It is            between the Yamal
                         transported by           district in Siberia
                         pipeline directly to a   and a power plant
                         natural gas power        located in either
                         plant in either          Rotterdam or Shanghai.
                         Rotterdam or Shanghai.
4.....................   Coal is         This scenario models
                         extracted in either      two types of coal
                         Europe or Asia. It is    widely used to
                         transported by rail to   generate steam-
                         a domestic coal-fired    electric power: (1)
                         power plant.             Surface mined sub-
                                                  bituminous coal, and
                                                  (2) underground mined
                                                  bituminous coal.
                                                 Additionally, U.S.
                                                  mining data and U.S.
                                                  plant operations were
                                                  used as a proxy for
                                                  foreign extraction in
                                                  Germany and China.
------------------------------------------------------------------------

    In all four scenarios, the 1 MWh of electricity delivered to the 
end consumer is assumed to be distributed using existing transmission 
infrastructure.\49\
---------------------------------------------------------------------------

    \47\ The four scenarios are set forth in the LCA GHG Update at 
2-3 and also discussed at 4-5.
    \48\ Yamal, Siberia, was chosen as the extraction site because 
that region accounted for 82.6% of natural gas production in Russia 
in 2012. LCA GHG Update at 5.
    \49\ See id. at 3.
---------------------------------------------------------------------------

E. GHGs Reported as Carbon Dioxide Equivalents

    Recognizing that there are several types of GHGs, each having a 
different potential impact on the climate, NETL normalized GHGs for the 
study. NETL chose carbon dioxide equivalents (CO2e), which 
convert GHGs to the same basis: an equivalent mass of carbon dioxide. 
CO2e is a metric commonly used to estimate the amount of 
global warming that GHGs may cause, relative to the same mass of carbon 
dioxide released to the atmosphere.\50\ NETL chose CO2e 
using the GWP of each gas set forth in the IPCC's AR5, published in 
2013.\51\
---------------------------------------------------------------------------

    \50\ See id.
    \51\ See id.
---------------------------------------------------------------------------

    GWP is an impact category that comprises carbon dioxide, methane, 
and nitrous oxide (N2O). All three of these gases have the 
ability to trap heat in the atmosphere, but each one has a unique heat 
trapping capacity and atmospheric decay rate, thus requiring an impact 
assessment method that allows aggregation of their impacts to a common 
basis. Without multiplying each of these gases by an equivalency factor 
(e.g., a GWP), there is no way to directly compare them. Therefore, the 
IPCC uses the relative radiative forcing of these gases, the secondary 
effects of their decay, and feedback from the ecosystem--all of which 
are a function of a specified time frame--to develop the GWP 
equivalency factors.
    In the Update, NETL notes that the IPCC AR5 gives the GWPs on a 20- 
and 100-year time frame that includes climate-carbon feedback.\52\ NETL 
used a 20-year methane GWP of 87 and a 100-year methane GWP of 36. 
Because climate carbon effects are included in these GWP values, they 
are slightly higher than the GWP values used in the 2014 LCA GHG Report 
(which were 85 and 30, respectively). As a result, the LCA GHG Update 
reflects the most current GWP for methane as set forth in the IPCC 
AR5.\53\
---------------------------------------------------------------------------

    \52\ See id. & n.2 (discussing the IPCC AR5's GWPs).
    \53\ See id.
---------------------------------------------------------------------------

F. Natural Gas Modeling Approach

    NETL's natural gas model is flexible, allowing for the modeling of 
different methods of producing natural gas. For Scenario 1, all natural 
gas was modeled as unconventional gas from the Appalachian Shale, since 
that shale play reasonably represents new marginal gas production in 
the United States. For Scenarios 2 and 3, the extraction process was 
modeled after conventional onshore natural gas production in the United 
States. This includes both the regional LNG supply options that were 
chosen for this study (Algeria for Europe and Australia for Asia) and 
extraction in the Siberian region of Russia for pipeline transport to 
the power plants in Europe and Asia.\54\
---------------------------------------------------------------------------

    \54\ LCA GHG Update at 4.
---------------------------------------------------------------------------

    In the above three natural gas scenarios, the natural gas is 
transported through a pipeline, either to an area that processes LNG 
(Scenarios 1 and 2) or directly to a power plant (Scenario 3). NETL's 
model also includes an option for all LNG steps--from extraction to 
consumption--known as the LNG supply chain. After extraction and 
processing, natural gas is transported through a pipeline to a 
liquefaction facility. The LNG is loaded onto an ocean tanker, 
transported to an LNG terminal, re-gasified, and fed to a pipeline that 
transports it to a power plant. NETL assumed that the natural gas power 
plant in each of the import destinations already exists and is located 
close to the LNG port, such that no additional pipeline transport of 
natural gas is modeled in the destination country.\55\
---------------------------------------------------------------------------

    \55\ See id.
---------------------------------------------------------------------------

    The amount of natural gas ultimately used to make electricity is 
affected by power plant efficiency. Therefore, the efficiency of the 
destination power plant is an important parameter required for 
determining the life cycle emissions for

[[Page 78]]

natural gas power. The less efficient a power plant is, the more 
natural gas it consumes and the more GHG emissions it produces per unit 
of electricity generated. The LCA GHG Update used a natural gas power 
plant efficiency of 46.4%, the same efficiency used in the 2014 
Report.\56\ This efficiency is consistent with the efficiencies of 
currently installed, large-scale natural gas power plants in the United 
States, as detailed in the Update.\57\ NETL also assumed that the 
efficiencies used at the destination power plants (in Rotterdam and 
Shanghai) were the same as those used in the U.S. model, which are 
representative of fleet baseload power plants.\58\
---------------------------------------------------------------------------

    \56\ Originally calculated using the U.S. Environmental 
Protection Agency's (EPA) Emissions and Generation Resource 
Integrated Database (eGRID), this 46.4% figure represents the 
average efficiency of natural gas power plants operating in the 
United States in 2009. More background on this efficiency is 
provided in NETL's Natural Gas and Power LCA Model Documentation 
(NETL, 2014).
    \57\ See LCA GHG Update at 19 (Exh. 5-13). In Exhibit 5-13, the 
two citations to the NETL, 2019 reference should cite the NETL, 
2014a reference, as shown in the third row of that column. Although 
these two NETL references were incorrectly cited, the numbers used 
in the LCA GHG Update were correct.
    \58\ See id.
---------------------------------------------------------------------------

G. Coal Modeling Approach

    NETL modeled Scenario 4, the regional coal scenario, based on two 
types of coal: bituminous and sub-bituminous. Bituminous coal is a soft 
coal known for its bright bands. Sub-bituminous coal is a form of 
bituminous coal with a lower heating value. Both types are widely used 
as fuel to generate steam-electric power. NETL used its existing LCA 
model for the extraction and transport of sub-bituminous and bituminous 
coal in the United States as a proxy for foreign extraction in Germany 
and China. Likewise, NETL modeled foreign coal production as having 
emissions characteristics equivalent to average U.S. coal production. 
No ocean transport of coal was included to represent the most 
conservative coal profile (whether regionally sourced or imported).\59\
---------------------------------------------------------------------------

    \59\ See id. at 6.
---------------------------------------------------------------------------

    The heating value of coal is the amount of energy released when 
coal is combusted, whereas the heat rate is the rate at which coal is 
converted to electricity by a power plant. Both factors were used in 
the model to determine the feed rate of coal to the destination power 
plant (or the speed at which the coal would be used). For consistency, 
the LCA GHG Update used the same range of efficiencies that NETL used 
in the 2014 LCA GHG Report for the modeling of coal power in the United 
States. The Update also assumed the same range of power plant 
efficiencies for Europe and Asia as the U.S. model, which are 
representative of fleet baseload power plants.\60\
---------------------------------------------------------------------------

    \60\ See id. at 6-7.
---------------------------------------------------------------------------

H. Key Modeling Parameters

    NETL modeled variability among each scenario by adjusting numerous 
parameters, giving rise to hundreds of variables. Key modeling 
parameters described in the LCA GHG Update include, but are not limited 
to: (1) Lifetime well production rates, (2) emission factors for non-
routine (or episodic) emissions,\61\ (3) the flaring rate for natural 
gas,\62\ (4) coal type (sub-bituminous or bituminous), (5) transport 
distance (ocean tanker for LNG transport, and rail for coal transport), 
and (6) the efficiency of the destination power plant.\63\ To account 
for uncertainty, NETL developed distributions of low, expected, and 
high values when the data allowed. Otherwise, NETL gave an expected 
value for each parameter.\64\
---------------------------------------------------------------------------

    \61\ The key modeling parameters for the natural gas scenarios 
are provided in the LCA GHG Update at Exhibits 5-1 through Exhibit 
5-6 (LNG and Russian natural gas). See LCA GHG Update at 8-14.
    \62\ Flaring rate is a modeling parameter because the GWP of 
vented natural gas can be reduced if it is flared, or burned, to 
create carbon dioxide. See id. at 8.
    \63\ See generally id. at 8-19 (key modeling parameters).
    \64\ Id. at 9.
---------------------------------------------------------------------------

    NETL noted that the results of the LCA GHG Update are sensitive to 
these key modeling parameters--particularly changes in coal type, coal 
transport distance, and power plant net efficiency (i.e., 
performance).\65\ NETL also identified several study limitations 
attributable to challenges with LNG market dynamics and data 
availability in foreign countries, including that: (1) NETL had to 
model foreign natural gas and coal production based on U.S. models; (2) 
NETL had to model foreign power plant efficiencies based on data from 
U.S. power plants; and (3) the specific LNG export and import locations 
used in the Update represent an estimate for an entire region (e.g., 
New Orleans representing the U.S. Gulf Coast).\66\
---------------------------------------------------------------------------

    \65\ See id. at 18-19.
    \66\ See id. at 32 (summary and study limitations).
---------------------------------------------------------------------------

I. Results of the LCA GHG Update

    As with the 2014 LCA GHG Report, two primary conclusions may be 
drawn from the LCA GHG Update.\67\ First, use of U.S. LNG exports to 
produce electricity in European and Asian markets will not increase GHG 
emissions on a life cycle perspective, when compared to regional coal 
extraction and consumption for power production.\68\ As shown below in 
Figures 1 and 2, the Update indicates that, for most scenarios in both 
the European and Asian regions, the generation of power from imported 
natural gas has lower life cycle GHG emissions than power generation 
from regional coal.\69\ The use of imported coal in these countries 
would only increase coal's GHG profile. Given the uncertainty in the 
underlying model data, however, it is not clear if there are 
significant differences between the corresponding European and Asian 
cases other than the LNG transport distance from the United States and 
the pipeline distance from Russia.\70\
---------------------------------------------------------------------------

    \67\ For detailed study results, see LCA GHG Update at 20-31.
    \68\ See id. at 32.
    \69\ Although these figures present an expected value for each 
of the four scenarios, the figures should not be interpreted as the 
most likely values due to the wide range of scenario variability and 
data uncertainty. Rather, the values allow an evaluation of trends 
only--specifically, how each of the major processes (e.g., 
extraction, transport, combustion) contribute to the total life 
cycle GHG emissions. See id. at 20.
    \70\ See id. at 22.
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BILLING CODE 6450-01-C
    Second, on a 100-year GWP timeframe, there is an overlap between 
the ranges in the life cycle GHG emissions of U.S. LNG, regional 
alternative sources of LNG, and natural gas from Russia delivered to 
the European or Asian markets. Any differences are considered 
indeterminate due to the underlying uncertainty in the modeling data. 
Therefore, on a 100-year GWP timeframe, the life cycle GHG emissions 
among these sources of natural gas are considered similar, and no 
significant increase or decrease in net climate impact is anticipated 
from any of these three scenarios.\73\
---------------------------------------------------------------------------

    \71\ See id. at 20 (Exh. 6-1).
    \72\ See id. at 21 (Exh. 6-2).
    \73\ LCA GHG Update at 21, 32.
---------------------------------------------------------------------------

    When using a 20-year GWP timeframe, the Russian scenario (which 
transports natural gas via pipeline) has higher life cycle GHG 
emissions than the LNG scenarios, with no overlapping of error bars. 
Further, on a 20-year GWP time frame, the error bars for the Russian 
scenario overlap those for the regional coal scenarios for both Europe 
and Asia.
    For additional information, please see the LCA GHG Update available 
on DOE's website at: https://www.energy.gov/sites/prod/files/2019/09/f66/2019%20NETL%20LCA-GHG%20Report.pdf.

III. Notice of Availability of the LCA GHG Update

    On September 19, 2019, DOE published notice of availability (NOA) 
of the LCA GHG Update and a request for comments.\74\ The purpose of 
the NOA was ``to provide additional information to the public and to 
inform DOE's decisions regarding the life cycle greenhouse gas 
emissions of U.S. [LNG] exports for use in electric power generation.'' 
\75\ DOE stated that ``any person may file comments addressing the LCA 
GHG Update.'' \76\
---------------------------------------------------------------------------

    \74\ See U.S. Dep't of Energy, Life Cycle Greenhouse Gas 
Perspective on Exporting Liquefied Natural Gas From the United 
States; Notice of Availability of Report Entitled Life Cycle 
Greenhouse Gas Perspective on Exporting Liquefied Natural Gas From 
the United States: 2019 Update and Request for Comments, 84 FR 49278 
(Sept. 19, 2019).
    \75\ Id. at 84 FR 49279.
    \76\ Id. at 84 FR 49280 (also stating that persons with an 
interest in individual docket proceedings already have been given an 
opportunity to intervene in or protest those matters).
---------------------------------------------------------------------------

    Publication of the NOA began a 30-day public comment period that 
ended on October 21, 2018. DOE received seven comments in response to 
the NOA. Three commenters supported the LCA GHG Update: (1) LNG Allies, 
the U.S. LNG Association (LNG Allies), (2) the American Petroleum 
Institute (API), and (3) the Center for Liquefied Natural Gas (CLNG). 
Three commenters opposed the LCA GHG Update, or otherwise criticized 
aspects of the Update: (1) John Young, (2) the Industrial Energy 
Consumers of America (IECA), and (3) Sierra Club. The final comment, 
submitted by Croitiene ganMoryn, was non-responsive. Ms. ganMoryn did 
not address the LCA GHG Update but rather stated her opposition to 
exports of LNG generally.
    The NOA and comments received on the NOA are available on DOE's 
website at: https://fossil.energy.gov/app/docketindex/docket/index/21.

IV. Comments on the LCA GHG Update and DOE Responses

    DOE has evaluated the comments received during the public comment 
period. In this section, DOE discusses the relevant comments received 
on the LCA GHG Update and provides DOE's responses to those comments. 
DOE does not address comments outside the scope of the LCA GHG Update, 
such as concerns related to hydraulic fracturing (or ``fracking'') and 
the geopolitical aspects of exporting U.S. LNG.\77\
---------------------------------------------------------------------------

    \77\ See Comments of John Young at 1-2.
---------------------------------------------------------------------------

A. Scope of the LCA GHG Update

1. Comments
    Commenters supporting the LCA GHG Update express support for NETL's 
study design. For example, LNG Allies supports NETL's transparency in 
presenting the LCA approach, the modeling scenarios used, and other 
aspects of the Update.\78\ LNG Allies further states that the 
assumptions used in the LCA GHG Update track other peer-reviewed 
studies published between 2015 and 2019--which, LNG Allies asserts, 
found that exports of U.S. LNG yield ``substantial net positive global 
GHG benefits.'' \79\ CLNG states that NETL's updates to the 2014 LCA 
GHG Report reflect the latest science and understanding of new 
technology, including a comprehensive upstream LCA model and updated 
shipping and regasification modules.\80\ Similarly, API expresses 
support for DOE's decision to provide updates to the assumptions and 
methodologies used in the 2014 Report, and notes that the overall 
conclusions in the Update remain the same.\81\
---------------------------------------------------------------------------

    \78\ Comments of LNG Allies at 1.
    \79\ Id. at 1-2.
    \80\ Comments of CLNG at 2-3.
    \81\ Comments of API at 1-2.
---------------------------------------------------------------------------

    Sierra Club observes that ``comparing the lifecycle emissions of US 
LNG with other fossil fuels can provide a useful perspective on the 
climate impacts of potential LNG exports.'' \82\ Sierra Club, however, 
also criticizes the scope of the LCA GHG Update for this same 
comparison.
---------------------------------------------------------------------------

    \82\ Comments of Sierra Club at 5.
---------------------------------------------------------------------------

    In Sierra Club's view, comparing the lifecycle emissions of 
electricity generated in foreign markets using various fossil fuels 
``does not answer the question of how DOE's decision to approve 
additional US LNG exports, generally for 20-year licenses, will affect 
global greenhouse gas emissions throughout the approved project 
lifetimes.'' \83\ Sierra Club argues that the LCA GHG Update fails to 
account for two factors: (1) That U.S. LNG exports allegedly will, to 
some extent, displace renewables or increase overall energy 
consumption, rather than only displacing other fossil fuels, and (2) 
that increasing LNG exports will cause ``domestic gas-to-coal 
switching,'' and thus result in an increase in coal use.\84\ We address 
the domestic gas-to-coal switching argument in section IV.C.
---------------------------------------------------------------------------

    \83\ Id. at 1 (emphasis in original).
    \84\ Id.
---------------------------------------------------------------------------

    As to the first point, Sierra Club asserts that the LCA GHG Update 
ignores the effect that exports of U.S. LNG will have on renewable 
sources of energy and overall energy consumption.\85\ Sierra Club 
maintains that increasing international trade in LNG to increase global 
availability of natural gas will cause natural gas to displace use of 
wind, solar, or other renewables that would otherwise occur. Further, 
according to Sierra Club, ``recent peer reviewed research concludes 
that US LNG exports are likely to play only a limited role in 
displacing foreign use of coal . . . such that US LNG exports are 
likely to increase net global GHG emissions.'' \86\
---------------------------------------------------------------------------

    \85\ Id. at 3 (and section heading).
    \86\ Id. at 4 (citing Gilbert, A.Q. & Sovacool, B.K., U.S. 
liquefied natural gas (LNG) exports: Boom or bust for the global 
climate? Energy (Dec. 15, 2017) [hereinafter Gilbert & Sovacool]).
---------------------------------------------------------------------------

    Mr. Young similarly questions whether exports of U.S. LNG will 
delay or reduce the transition to renewable sources of energy, and 
whether LNG will replace or be added to coal generated power.\87\
---------------------------------------------------------------------------

    \87\ Comments of John Young at 1.
---------------------------------------------------------------------------

2. DOE Response
    The 2019 LCA GHG Update was a timely update to the 2014 LCA GHG 
Report and maintained the same analytical structure. As with the 2014 
Report, the boundaries of the 2019 Update were developed with respect 
to questions about two fossil fuels--natural gas and coal--and where 
they

[[Page 81]]

come from. Although Sierra Club criticizes the Update for ``not looking 
at the whole picture,'' \88\ the purpose of the LCA was to understand 
the life cycle GHG emissions from natural gas-fired power and how it 
varies with changes to natural gas sources, destinations, and transport 
distances. The LCA included coal-fired power as a comparative scenario 
because coal is currently the most likely alternative to natural gas-
fired power for baseload power generation.
---------------------------------------------------------------------------

    \88\ Comments of Sierra Club at 3.
---------------------------------------------------------------------------

    Additionally, the LCA is an attributional analysis, meaning that 
the natural gas and coal scenarios are considered independent supply 
chains. Therefore, the LCA does not account for supply or demand shifts 
caused by the use of one fuel instead of another fuel (or types of 
fuels).
    For these reasons, the LCA GHG Update (like the 2014 Report) does 
not provide information on whether authorizing exports of U.S. LNG to 
non-FTA nations will increase or decrease GHG emissions on a global 
scale. Recognizing there is a global market for LNG, exports of U.S. 
LNG will affect the global price of LNG which, in turn, will affect 
energy systems in numerous countries. DOE further acknowledges that 
regional coal and imported natural gas are not the only fuels with 
which U.S.-exported LNG will compete. U.S. LNG exports may also compete 
with renewable energy, nuclear energy, petroleum-based liquid fuels, 
coal imported from outside East Asia or Western Europe, indigenous 
natural gas, synthetic natural gas derived from coal, and other 
resources. However, to model the effect that U.S. LNG exports would 
have on net global GHG emissions would require projections of how each 
of these fuel sources would be affected in each LNG-importing nation. 
Such an analysis would not only have to consider market dynamics in 
each of these countries over the coming decades, but also the 
interventions of numerous foreign governments in those markets. 
Moreover, the uncertainty associated with estimating each of these 
factors would likely render such an analysis too speculative to inform 
the public interest determination in DOE's non-FTA proceedings.
    Although Sierra Club expresses concern with the scope of the LCA 
GHG Update, the D.C. Circuit held in 2017 that there was, in fact, 
``nothing arbitrary about the Department's decision'' to compare 
emissions from exported U.S. LNG to emissions of coal or other sources 
of natural gas, rather than renewables or other possible fuel 
sources.\89\ The Court's decision in Sierra Club I guided our 
development of this Update.\90\
---------------------------------------------------------------------------

    \89\ Sierra Club I, 867 F.3d at 202 (finding that ``Sierra 
Club's complaint `falls under the category of flyspecking' '') 
(citation omitted).
    \90\ See supra at Sec.  I.D.
---------------------------------------------------------------------------

    Nonetheless, Sierra Club asserts that DOE could now conduct a more 
careful and informative analysis than it did in the 2014 Report.\91\ 
Sierra Club does not cite any study that provides the sort of analysis 
it urges DOE to undertake. Rather, Sierra Club cites projections from 
the U.S. Energy Information Administration (EIA) that ``global energy 
consumption will steadily increase in the coming decades, and that this 
increase will be satisfied by growth in renewables and [natural] gas,'' 
\92\ as well as projections by the International Energy Agency (IEA) 
that exports of LNG are likely to supply increased demand rather than 
displace existing generation.\93\ Sierra Club also points to a study by 
Gilbert and Sovacool which, according to Sierra Club, concludes that 
U.S. LNG is ``likely to play only a limited role in displacing foreign 
use of coal.'' \94\
---------------------------------------------------------------------------

    \91\ Comments of Sierra Club at 4.
    \92\ Id. (citing U.S. Energy Info. Admin., International Energy 
Outlook 2019, at 31).
    \93\ Id. at 3-4.
    \94\ Id. at 4 (citing Gilbert & Sovacool, supra).
---------------------------------------------------------------------------

    As explained previously, NETL's LCA GHG Update uses the most 
current data and methodology to assess GHG emissions. The materials 
cited by Sierra Club do not provide any new analysis to evaluate how 
exports of U.S. LNG may affect global GHG emissions. The market 
projections by EIA and IEA cited by Sierra Club simply provide a case 
of continued exports of U.S. LNG to support global energy demands. 
Conclusions by other analysts (such as the Gilbert and Sovacool study) 
provide a different analysis, but they do not provide new data or tools 
beyond what NETL already has integrated into the Update.
    The reality is that, although it may be straightforward to model 
simplified cause-and-effect relationships between energy options (such 
as the direct displacement of coal with natural gas), the modeling of 
complex market interactions in different countries introduces 
significant uncertainty, while at the same time expanding study 
boundaries and hindering accurate comparisons.\95\ For these reasons, 
DOE finds that Sierra Club has not provided new evidence to justify 
changes to the scope of the LCA GHG Update.
---------------------------------------------------------------------------

    \95\ For example, in one recent study (cited with approval by 
LNG Allies), Kasumu et al. mention the interaction among fuel 
options for electricity generation (e.g., LNG vs. renewables), but 
this study likewise did not model a complex cause-and-effect 
relationship between LNG and other fuels. See Kasumu, A.S., Li, V., 
Coleman, J.W., Liendo, J., & Jordaan, S.M. (2018). Country-level 
life cycle assessment of greenhouse gas emissions from liquefied 
natural gas trade for electricity generation. Environmental Science 
& Technology, 52(4), 1735-1746.
---------------------------------------------------------------------------

B. Roles of Natural Gas and Renewable Energy

1. Comments
    In challenging the scope of the LCA, Sierra Club states that the 
``primary question'' facing international markets that may import U.S. 
LNG is ``whether to meet increasing energy needs through [natural] gas 
or renewables.'' \96\
---------------------------------------------------------------------------

    \96\ Comments of Sierra Club at 4.
---------------------------------------------------------------------------

    CLNG states, however, that natural gas is an ``ideal partner'' to 
renewable energy resources in global energy markets.\97\ According to 
CLNG, when countries increase their use of natural gas for power 
generation, they both reduce their GHG emissions by switching to 
natural gas and have the opportunity to increase their use of renewable 
energy. CLNG asserts that, for every 1% increase in natural gas-powered 
electric generation, renewable power generation increases by 0.88%, 
further reducing emissions.\98\ CLNG thus argues that natural gas is 
helping the transition to a lower-carbon future.\99\
---------------------------------------------------------------------------

    \97\ Comments of CLNG at 4.
    \98\ Id. (citing National Bureau of Economic Research, 
``Bridging the Gap: Do Fast Reacting Fossil Technologies Facilitate 
Renewable Energy Diffusion?'' (July 2016)).
    \99\ Id.
---------------------------------------------------------------------------

2. DOE Response
    Projections by IEA from November 2019 indicate that the question of 
how to meet the demand for global energy should not be framed as 
natural gas or renewables, as suggested by Sierra Club.\100\ IEA's 
World Energy Model predicts medium to long-term energy trends, using 
simulations to replicate the inner-workings of energy markets.\101\ In 
that Model, the Sustainable Development Scenario models the behavior of 
energy markets in reaction to holding the increase in global average 
temperature below a 2 [deg]C increase from pre-industrial levels. The 
Sustainable Development Scenario projects that global CO2 
emissions will peak around 2020, then steeply decline by 2040. Although 
renewable energy sources will comprise much of this change--as 
renewables are projected to provide over 65% of global electricity 
generation by 2040--the use of natural gas remains

[[Page 82]]

part of the portfolio through 2040.\102\ As a result, DOE concludes 
that natural gas is one part of an environmentally-preferable global 
energy portfolio.
---------------------------------------------------------------------------

    \100\ See Comments of Sierra Club at 4.
    \101\ Internat'l Energy Agency, World Energy Model (Nov. 2019), 
available at: https://www.iea.org/weo/weomodel/.
    \102\ See id. at https://www.iea.org/weo/weomodel/sds/ and 
https://www.iea.org/weo2018/scenarios/. Table A3 (at page 679) shows 
the Sustainable Development Scenario World Energy Demand for the 
years 2030 and 2040. In 2040, natural gas is projected to be 17% of 
total world electricity demand and meet 24% of total world primary 
energy demand under the Sustainable Development Scenario.
---------------------------------------------------------------------------

C. Domestic Natural Gas-to-Coal Switching

1. Comments
    Sierra Club asserts that the LCA GHG Update is flawed because it 
does not consider that increasing LNG exports will cause natural gas-
to-coal switching in the United States.\103\ Citing EIA's 2012 and 2014 
LNG Export Studies for DOE, Sierra Club argues that some of the 
additional U.S. LNG to be exported will not be supplied by new 
production, but instead will be supplied by diverting natural gas from 
domestic consumers--which allegedly will cause an increase in domestic 
natural gas prices.\104\ According to Sierra Club, these price 
increases will cause domestic consumers to switch to using coal for 
power generation. Sierra Club therefore claims that the LCA GHG Update 
should have evaluated how increasing U.S. LNG exports will lead to an 
increase in domestic coal use and, in turn, how global GHG emissions 
will change based on DOE's decision to approve LNG export 
applications.\105\
---------------------------------------------------------------------------

    \103\ Comments of Sierra Club at 1.
    \104\ Id. at 5.
    \105\ Id. at 1, 5.
---------------------------------------------------------------------------

2. DOE Response
    The purpose of the Update was to conduct a life cycle analysis of 
GHG emissions in Europe and Asia, not to predict future coal usage by 
U.S. consumers. This argument is thus beyond the scope of this 
proceeding.
    Nonetheless, we note that the current price of natural gas in the 
United States is historically low, at less than $3.00/MMBtu. There 
would have to be substantial price increases before domestic consumers 
would switch from natural gas to coal. In 2018, however, DOE issued the 
2018 LNG Export Study, which found that `` `[i]ncreasing U.S. LNG 
exports under any given set of assumptions about U.S. natural gas 
resources and their production leads to only small increases in U.S. 
natural gas prices.' '' \106\ The 2018 LNG Export Study also refuted 
the concern that LNG exports would negatively impact domestic natural 
gas production.\107\ Further, EIA's Reference Case in the Annual Energy 
Outlook 2019 (AEO 2019) shows decreasing levels of coal consumption 
through 2050, falling from 677 million short tons (MMst) in 2018 to 538 
MMst in 2050.\108\ Although Sierra Club participated in the 2018 LNG 
Export Study proceeding, it did not raise concerns about gas-to-coal 
switching in that proceeding.\109\ Sierra Club also does not 
acknowledge the findings of the 2018 LNG Export Study or EIA's 
projections in AEO 2019 in its comments on the LCA GHG Update.
---------------------------------------------------------------------------

    \106\ See U.S. Dep't of Energy, Study on Macroeconomic Outcomes 
of LNG Exports; Response to Comments Received on Study, 83 FR 67251, 
67258 (quoting 2018 LNG Export Study), 67272 (same) (Dec. 28, 2018).
    \107\ Id. at 83 FR 62273.
    \108\ See U.S. Energy Info. Admin., Annual Energy Outlook 2019 
(with projections to 2050) (Jan. 24, 2019), available at: https://www.eia.gov/outlooks/aeo/pdf/aeo2019.pdf.
    \109\ See Sierra Club, Comments on the 2018 LNG Export Study 
(July 27, 2018), available at: https://fossil.energy.gov/app/DocketIndex/docket/DownloadFile/582.
---------------------------------------------------------------------------

    We also note that, in prior LNG export proceedings, Sierra Club 
raised this natural gas-to-coal switching argument under the National 
Environmental Policy Act (NEPA). In Sierra Club I, the D.C. Circuit 
rejected this argument by Sierra Club. The Court agreed with DOE that 
``the economic causal chain between its [non-FTA] export authorization 
and the potential use of coal as a substitute fuel for gas `is even 
more attenuated' than its relationship to export-induced gas 
production.'' \110\
---------------------------------------------------------------------------

    \110\ Sierra Club I, 867 F.3d at 201 (quoting DOE's order on 
rehearing) (denying Sierra Club's petition with respect to coal 
usage).
---------------------------------------------------------------------------

D. Global Warming Potential of Methane

1. Comments
    Although CLNG states that it supports the conclusion of the LCA GHG 
Update, it contends that NETL used an incorrect 100-year Global Warming 
Potential (GWP) for methane of 36.\111\ CLNG argues that this GWP value 
is out of line with most LCA practitioners and that, if NETL instead 
used a lower GWP of 28 or 30, the LCA GHG Update would show even 
greater benefits of U.S. LNG exports.\112\
---------------------------------------------------------------------------

    \111\ Comments of CLNG at 3 n.3.
    \112\ Id.
---------------------------------------------------------------------------

2. DOE Response
    Although the 2014 LCA GHG Report used a 100-year methane GWP of 30, 
that value is no longer appropriate today. In the LCA GHG Update, NETL 
used the 100-year methane GWP of 36, as set forth in the IPCC's Fifth 
Assessment Report (or AR5). The GWP value of 36 captures climate carbon 
feedbacks not reflected in lower GWP values for methane, and thus 
represents the current consensus of the international scientific and 
policy communities. DOE commissioned the LCA GHG Update in part to 
recognize this updated GWP value.\113\
---------------------------------------------------------------------------

    \113\ LCA GHG Update at 3 & n.2; see also supra at Sec.  II.E. 
Insofar as CLNG argues that the 100-year methane GWP of 36 skews the 
results of the LCA GHG Update, we refer CLNG to our prior 
proceedings, where we explained that a 100-year methane GWP of 36 
versus 30 would not have materially affected the conclusions of the 
2014 LCA GHG Report. See, e.g., Sabine Pass Liquefaction, LLC, DOE/
FE Order No. 3792-A, FE Docket No. 15-63-LNG, Opinion and Order 
Denying Request for Rehearing, at 37-38 (Oct. 20, 2016).
---------------------------------------------------------------------------

E. Methane Emission Rate of U.S. Natural Gas Production

1. Comments
    Sierra Club challenges the methane emission rate (also called the 
methane leakage rate) for U.S. natural gas production used in the LCA 
GHG Update. As explained previously, the methane emission rate measures 
the amount of methane that is emitted during the production, 
processing, and transportation of natural gas to a U.S. liquefaction 
facility.\114\ Sierra Club points out that, in the Update, NETL used a 
methane leakage rate of 0.7% of the natural gas delivered. Sierra Club 
states that this figure underestimates the methane leakage rate of 
domestic natural gas production, and thus underestimates the lifecycle 
GHG emissions of U.S. LNG.\115\
---------------------------------------------------------------------------

    \114\ See supra at Sec.  II.B.
    \115\ Comments of Sierra Club at 6 (citing LCA GHG Update at 
27).
---------------------------------------------------------------------------

    First, Sierra Club argues that the 0.7% leakage rate is not 
consistent with NETL's supporting documentation. Sierra Club points to 
NETL's April 2019 LCA of Natural Gas Extraction and Power Generation, 
which found a national average methane emission rate of 1.24%.\116\ 
Sierra Club further states that, even if it is appropriate to use a 
regional (as opposed to national) value representing natural gas coming 
from the Appalachian Shale (as NETL did in the Update), NETL's 
supporting documentation provides a leakage rate of 0.88% for 
Appalachian Shale production.\117\
---------------------------------------------------------------------------

    \116\ Id.
    \117\ See id.
---------------------------------------------------------------------------

    Second, Sierra Club maintains that the 0.7% leakage rate is far 
lower than ``top-down'' measurements, which it contends provide a more 
accurate leakage rate. Top-down studies measure methane emissions by 
measuring--through aerial flyovers--atmospheric measurements where oil 
and natural gas activity is occurring. Sierra Club

[[Page 83]]

criticizes NETL's 0.7% leakage rate because it is taken from ``bottom-
up'' measurement studies, which use measurements of methane emissions 
taken ``on the ground'' at natural gas production facilities.\118\ We 
note that this choice is consistent with the 2014 Report, in which NETL 
also used a methane emission rate derived from bottom-up measurement 
studies.
---------------------------------------------------------------------------

    \118\ See id. at 6-8.
---------------------------------------------------------------------------

    Sierra Club argues that methane leakage rates from top-down 
measurement studies are more common in the published literature, and 
that bottom-up estimates are ``systemically too low.'' \119\ According 
to Sierra Club, ``the likely average leak rate for U.S. natural gas 
production is 2.3% or more.'' \120\ Therefore, in Sierra Club's 
opinion, the 0.7% leakage rate used in the Update significantly 
understates the likely climate impact of U.S. LNG exports.\121\
---------------------------------------------------------------------------

    \119\ Id. at 7.
    \120\ See id. at 8.
    \121\ Comments of Sierra Club at 8.
---------------------------------------------------------------------------

2. DOE Response
    The average methane leakage rate estimated in the LCA GHG Update, 
at 0.7%, is based on NETL's analyses and relevant scientific 
literature.
    As a starting point, NETL used Appalachian Shale in the Update to 
represent the upstream emissions from U.S. LNG exports. NETL chose this 
scenario because Appalachian Shale is a growing share of the U.S. 
natural gas supply, currently representing approximately 30% of U.S. 
natural gas production.\122\ NETL's April 2019 LCA of Natural Gas 
Extraction and Power Generation showed a methane emission rate (or 
leakage rate) of 0.88% from cradle through distribution. This rate, 
like all GHG emissions in NETL's results, was bounded by wide 
uncertainty bounds that are driven by the variability in natural gas 
systems. The upper error bound for Appalachian Shale natural gas, from 
cradle through transmission, is 1.21%. When the boundaries of this 
emission rate are modified to represent natural gas production through 
transmission only (i.e., not including distribution to the end 
consumer), the average methane emission rate is reduced to 0.7%. This 
boundary modification is necessary because LNG liquefaction terminals 
pull natural gas directly from the natural gas transmission network to 
supply exports--meaning the natural gas does not pass through local 
distribution networks to U.S. consumers (which would increase the 
leakage rate). Accordingly, NETL's choice of a 0.7% leakage rate is 
representative of natural gas produced in the Appalachian Shale region 
for purposes of this export-focused analysis.
---------------------------------------------------------------------------

    \122\ See, e.g., LCA GHG Update at 4, 9-11.
---------------------------------------------------------------------------

    Second, we note that the studies cited by Sierra Club were 
generally published between 2012 and 2014.\123\ Sierra Club cites two 
more recent studies: A study published by Tong, et al. in 2015,\124\ 
and a study published by Alvarez, et al. in 2018.\125\ DOE addressed 
Sierra Club's argument based on several of the earlier studies in 
connection with the 2014 LCA GHG Report, and we incorporate by 
reference DOE's prior response.\126\
---------------------------------------------------------------------------

    \123\ See Comments of Sierra Club at 6-8.
    \124\ Tong, et al., Comparison of Life Cycle Greenhouse Gases 
from Natural Gas Pathways for Medium and Heavy-Duty Vehicles, 49 
Environ. Sci. Technol. 12 (2015), cited in Comments of Sierra Club 
at 6 n.16 & Exh. 11 [hereinafter Tong study].
    \125\ Alvarez, et al., Assessment of methane emissions from the 
U.S. oil and gas supply chain, 361 Science 186 (July 13, 2018), 
cited in Comments of Sierra Club at 6 n.16 & Exh. 10 [hereinafter 
Alvarez study].
    \126\ See, e.g., Sabine Pass Liquefaction, LLC, DOE/FE Order No. 
3792-A, supra note 113, at 31-35 (stating, inter alia, that ``[t]he 
top-down studies cited by Sierra Club represent valuable research 
that advance our understanding of methane emissions, but do not form 
a robust basis for estimating the leakage rate from U.S. natural gas 
systems in the aggregate.'').
---------------------------------------------------------------------------

    Turning to the Tong study, DOE notes that this study presents a LCA 
for fuel pathways for vehicles. Although the study includes a 2015-era 
estimates of methane emissions from the natural gas supply chain, its 
primary focus is transportation. Specifically, for natural gas supply 
chain emissions, the Tong study estimates a baseline methane leakage 
rate ranging from 1.0% to 2.2%, then multiplies this baseline rate by 
1.5 to account for ``superemitters.'' (``Superemitters'' is an 
expression that has been adopted by natural gas analysts to describe a 
small number of emission sources that contribute a disproportionately 
large share of emissions to the total U.S. natural gas emission 
inventory.) The methodology used in the Tong study, however, is neither 
as specific nor as current as NETL's 2019 methodology, which 
characterizes upstream natural gas production using data published by 
NETL in the April 2019 LCA of Natural Gas Extraction and Power 
Generation.\127\
---------------------------------------------------------------------------

    \127\ LCA GHG Update at 1, 4-5; see also supra at Sec.  II.B 
(discussing the April 2019 LCA).
---------------------------------------------------------------------------

    Likewise, the Alvarez study--which used a bottom-up approach--
evaluates measurements taken between 2012 and 2016. These measurements 
covered the natural gas supply chain, from production through 
distribution, and included methane emissions from petroleum production. 
Nonetheless, most of these measurements were collected at the facility 
level, and do not provide information on component-level emission 
sources within the fence-lines of facilities. On this basis, the 
Alvarez study calculated an average methane emission rate (or leakage 
rate) of 2.3%. This rate is higher than the rate in EPA's Greenhouse 
Gas Inventory, which shows an average methane emission rate of 1.4% for 
all U.S. natural gas from production through distribution.\128\ The 
Alvarez study further concluded that traditional inventory methods 
underestimate total methane emissions because they do not account for 
emissions from abnormal events, although the study did not provide data 
on what constitutes an abnormal event. Therefore, although the Alvarez 
study assembles emissions to a national level, its results do not 
provide insight on how methane emissions vary geographically or 
temporally.
---------------------------------------------------------------------------

    \128\ See U.S. Envt'l Protection, 2018. Inventory of U.S. 
Greenhouse Gas Emissions and Sinks: 1990-2016. EPA 430-R-18-003 
(Apr. 12, 2018), cited in LCA GHG Update at 33.
---------------------------------------------------------------------------

    Unlike the Tong and Alvarez studies, the LCA GHG Update accounts 
for methane emissions at the component level (i.e., specific pieces of 
supply chain equipment) and accounts for geographic and temporal 
variability. To address the discrepancies between top-down and bottom-
up measurement studies, NETL accounted for geographic and component 
variability in its April 2019 LCA on Natural Gas Extraction and Power 
Generation--which, in turn, was used as part of the 2019 Update. 
Specifically, NETL stratified EPA's Greenhouse Gas Reporting Program 
data into 27 scenarios that represent four extraction technologies and 
12 onshore production basins (``techno-basins''). This approach allowed 
NETL to factor in the regional differences in natural gas production 
methods and geologic sources across the country, with regional 
variability in methane emission profiles.\129\ The average life cycle 
methane emissions across NETL's techno-basins range from 0.8% to 3.2% 
(production through distribution).\130\
---------------------------------------------------------------------------

    \129\ See, e.g., LCA GHG Update at 1, 4-5, 8-9.
    \130\ April 2019 LCA of Natural Gas Extraction and Power 
Generation, at 79 (Exh. 6-4).
---------------------------------------------------------------------------

    NETL's methodology thus acknowledges that there are combinations of 
natural gas extraction technologies and geographical regions that both 
exceed the methane emission rate (or leakage rate) calculated in the 
Alvarez study and that have upper error bounds that include the leakage 
rates from top-down studies. The existence of higher leakage rates does 
not undermine

[[Page 84]]

NETL's use of 0.7% as the methane emission rate because part of NETL's 
analysis in the Update sought to address the discrepancies between the 
two types of measurements.
    Further, as noted, NETL chose the Appalachian Shale scenario 
because the Appalachian Shale represents a growing share of U.S. 
natural gas production and is currently supporting the U.S. LNG export 
market. The other, higher leakage rates cited by Alvarez are merely 
indicative of the type of irregular behavior expected in highly 
variable natural gas systems, which have many contributors with skewed 
probability distribution functions (e.g., superemitters).\131\
---------------------------------------------------------------------------

    \131\ See, e.g., Brandt, A.R., Heath, G.A., & Cooley, D. (2016). 
Methane leaks from natural gas systems follow extreme distributions. 
Environmental science & technology, 50(22), 12512-12520.
---------------------------------------------------------------------------

    In sum, top-down and bottom-up methods are complementary, and more 
research and analysis are necessary to reconcile them. NETL has 
continued to update its LCA of Natural Gas Extraction and Power 
Generation with the current state of the science, inclusive of both 
top-down and bottom-up measurement data. By characterizing the 
variability inherent in EPA's Greenhouse Gas Reporting Program data, 
NETL's bottom-up method provides results that are comparable to top-
down studies.\132\ For these reasons, DOE concludes that a higher 
methane leakage rate derived through top-down studies is not inherently 
more accurate than the 0.7% rate calculated by NETL on the basis of its 
bottom-up method.
---------------------------------------------------------------------------

    \132\ As one example, NETL has accounted for variability between 
top-down and bottom-up methods by evaluating liquids unloading. NETL 
produced a multivariable model that simulates liquids unloading at a 
basin level and generates methane emission rates that are comparable 
to top-down measurements (Zaimes, et al., 2019). This method is 
included in NETL's latest work, including in the LCA GHG Update and 
the April 2019 LCA of Natural Gas Extraction and Power Generation.
---------------------------------------------------------------------------

F. Other Aspects of NETL's Natural Gas Modeling Approach

1. Comments
    Sierra Club and IECA assert that the LCA GHG Update either 
underestimates certain categories of GHG emissions (including methane) 
present at other stages of the LNG lifecycle or does not include them 
at all. Neither commenter explains how or to what extent these alleged 
deficiencies in NETL's natural gas modeling approach would affect the 
conclusions of the Update. However, both commenters assert that the 
Update must account for these emissions.\133\
---------------------------------------------------------------------------

    \133\ See Comments of Sierra Club at 8-9; Comments of IECA at 1.
---------------------------------------------------------------------------

    First, Sierra Club contends that it was improper for NETL to assume 
that the natural gas power plant in each of the import destinations is 
located close to the LNG port, so that no additional pipeline transport 
of natural gas was modeled in the destination country.\134\ Citing an 
article in Bloomberg Business, Sierra Club states that, ``in China, LNG 
is being transported from terminal to end users by truck, a process 
that presumably entails significant emissions even greater than 
transportation by pipeline.'' \135\
---------------------------------------------------------------------------

    \134\ Comments of Sierra Club at 8 (discussing LCA GHG Update at 
4).
    \135\ Comments of Sierra Club at 8 & n.26 (citing Dan Murtaugh, 
Welcome to Gas Pipelines on Wheels, Bloomberg Business (Nov. 5, 
2018)).
---------------------------------------------------------------------------

    Second, Sierra Club contends that the LCA GHG Update should account 
for the fact that LNG may not proceed directly from the import facility 
to regasification due to an emerging LNG resale market.\136\ Sierra 
Club states that resale (or re-export) of U.S. LNG in the destination 
country may involve additional steps in storing, moving, and shipping 
LNG, beyond the direct shipping routes assumed by NETL in its national 
gas modeling approach.\137\
---------------------------------------------------------------------------

    \136\ Id. at 9.
    \137\ Id.
---------------------------------------------------------------------------

    Next, IECA identifies the following five types of emissions that, 
it states, should be included in the LCA GHG Update:

    (1) GHG emissions from natural gas electricity consumption to 
compress the natural gas into LNG and to operate the liquefaction 
facility;
    (2) GHG emissions from the LNG liquefaction process inside-the-
fence line, including CO2, methane, and GHG emissions 
emitted during the refrigeration process;
    (3) Methane emissions inside-the-fence line, including those 
emitted during the loading and unloading of LNG;
    (4) Methane emissions from pipelines used to serve the LNG 
facility, using the EIA/EPA national average methane leakage rates; 
and
    (5) National average EIA/EPA GHG emissions from drilling oil and 
natural gas wells, plus any related power generation.\138\

    \138\ Comments of IECA at 1.

    Additionally, API states that the Update likely overestimated the 
emissions associated with the natural gas extraction and processing 
stage, citing the availability of new, low-leak equipment.\139\ CLNG 
likewise asserts that NETL overestimated the GHG emissions associated 
with compressor stations and, by extension, pipelines.\140\
---------------------------------------------------------------------------

    \139\ Comments of API at 2.
    \140\ Comments of CLNG at 3 n.3 (referencing Exhibit 6-3 of the 
April 2019 LCA of Natural Gas Extraction and Power Generation).
---------------------------------------------------------------------------

2. DOE Response
    Addressing Sierra Club's first concern, DOE notes that the LCA GHG 
Update intentionally did not account for natural gas transmission 
between regasification facilities and power plants. This was a modeling 
simplification--the same one used in the 2014 Report--based on an 
assumption that large-scale natural gas power plants are located close 
to LNG import terminals.
    As a way of testing the effect of this assumption, NETL has 
approximated the marginal increase in life cycle GHG emissions by 
adding 100 miles of natural gas pipeline transmission between the 
regasification facility and power plant. The April 2019 LCA of Natural 
Gas Extraction and Power Generation, at Exhibit 6-1, shows that there 
are approximately 6 kilograms (kg) of CO2e emitted from 
natural gas transmission per megajoule (MJ) of delivered natural gas. 
These emissions comprise approximately 4.5 grams of CO2 and 
1.5 grams of methane (in 100-year methane GWPs). NETL's life cycle 
natural gas model uses an average transmission distance of 971 
kilometers (km) and a natural gas combustion emission factor of 
approximately 2.7 kg CO2/kg natural gas. This information 
allows the computation of a transmission energy intensity of 0.0017 g 
NG fuel/MJ-km and a transmission emission intensity factor of 0.0062 g 
CO2e/MJ-km. After balancing these intensity factors with 
upstream natural gas losses and downstream power plant demands, DOE 
finds that an additional 100 miles of transmission between 
regasification and power generation increases the life cycle GHG 
emissions for NETL's New Orleans-to-Rotterdam scenario by only 1.8% 
(from 636 to 648 kg CO2e/MWh). The magnitude of this 
increase would be similar for all LNG scenarios, and such a small 
increase would not change the conclusions of the LCA GHG Update.
    With regard to truck transport, DOE agrees that trucks are another 
potential option for moving natural gas between import terminals and 
end users, including power plants. However, because truck transport of 
LNG is still relatively new and transport by pipeline remains the 
dominant way to move LNG to end users, NETL did not model LNG tanker 
truck transport for purposes of this analysis. In a fully developed LNG 
supply chain, we expect that LNG importers will invest in efficient, 
cost-effective infrastructure, like pipelines, to transport natural gas 
to end users. Sierra Club does not provide evidence, other than the 
Bloomberg Business

[[Page 85]]

article, to support this point, and we decline to make any changes to 
the LCA GHG Update on this basis.\141\
---------------------------------------------------------------------------

    \141\ Among other observations about Sierra Club's truck 
argument, we note that imports of U.S. LNG as modeled in the LCA GHG 
Update would be delivered in large-scale LNG carriers capable of 
delivering the equivalent of more than three billion cubic feet of 
natural gas. Those deliveries would serve power plants on a scale 
requiring continuous supply of natural gas that would make 
deliveries by truck impracticable. Additionally, Sierra Club claims 
that LNG transported from terminals to end users by truck ``accounts 
for 12 percent of China's LNG use.'' Comments of Sierra Club at 8-9. 
Sierra Club cites the Bloomberg Business article for this statistic. 
We are unable to evaluate this statistic, however, as it is appears 
to be taken from a Wood Mackenzie report that is not part of the 
record. Finally, Sierra Club's argument is based on the assumption 
that all truck transport of LNG in China involves imported LNG. We 
note, however, that China produces its own natural gas, and also 
receives natural gas by pipeline from neighboring countries. These 
supplies of natural gas could be liquefied in China for delivery by 
truck.
---------------------------------------------------------------------------

    As to Sierra Club's concern regarding emissions potentially 
associated with the resale or re-export of U.S. LNG in importing 
countries, this issue is outside the scope of this proceeding. 
Nonetheless, in December 2018, DOE found that re-exports of U.S. LNG 
cargoes represent a ``very small percentage'' of global LNG trade.\142\
---------------------------------------------------------------------------

    \142\ U.S. Dep't of Energy, Eliminating the End Use Reporting 
Provision in Authorizations for the Export of Liquefied Natural Gas; 
Policy Statement, 83 FR 65078, 65079 (Dec. 19, 2018) (citation 
omitted).
---------------------------------------------------------------------------

    DOE next addresses the concerns raised by IECA, API, and CLNG 
concerning the alleged deficiencies or errors in NETL's natural gas 
modeling approach. First, IECA contends that the Update overlooks GHG 
emissions from natural gas electricity consumption to compress the 
natural gas into LNG and to operate the liquefaction facility. NETL's 
model, however, has a unit process that accounts for all inputs and 
outputs from liquefaction, including the portion of natural gas that a 
liquefaction facility sends to gas-fired turbines to generate power for 
the liquefaction trains.\143\
---------------------------------------------------------------------------

    \143\ LCA GHG Update at App. B (Unit Process Descriptions).
---------------------------------------------------------------------------

    Second, IECA claims that the Update does not account for GHG 
emissions from the LNG liquefaction process inside-the-fence line, 
including GHG emissions released during the refrigeration process. In 
fact, NETL's unit process for liquefaction accounts for all GHG 
emissions from both onsite energy generation at the liquefaction 
facility and the operation of ancillary equipment at the facility. The 
unit process also includes fugitive methane emissions as reported by 
facility operators to EPA.\144\
---------------------------------------------------------------------------

    \144\ See id.
---------------------------------------------------------------------------

    Third, IECA contends that the Update does not account for methane 
emissions inside-the-fence line, including those emitted during the 
loading and unloading of LNG. IECA is correct that the Update does not 
account for this emission source, but NETL has conducted a screening 
analysis based on the length of a LNG tanker loading arm connector. 
This screening analysis determined that the scale of these emissions 
are miniscule in comparison to the fugitive emissions already accounted 
for in the liquefaction unit process.
    Fourth, IECA asserts that the Update does not account for the 
methane emissions from pipelines used to serve the LNG facility, using 
the EIA and EPA national average methane leakage rates. NETL's unit 
process for transmission, however, is representative of a 971 km 
natural gas pipeline with fugitive emissions of methane, as well as 
intentional methane releases through routine blowdown and other 
pipeline maintenance events.\145\ The data for these methane emissions 
are representative of industry reporting to EPA and emission factors 
used by EPA's Greenhouse Gas Inventory.
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    \145\ See April 2019 LCA of Natural Gas Extraction and Power 
Generation, at 21 (Exh. 3-7), 62-64 (Exhs. 4-4 and 4-6).
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    Finally, IECA contends that the LCA GHG Update does not account for 
national average EIA and EPA GHG emissions from drilling oil and 
natural gas wells, plus any related power generation. On the other 
hand, API and CLNG state that the Update likely overestimates other 
categories of GHG emissions in the natural gas supply chain. NETL's 
LCA, however, is a detailed, engineering-based life cycle model of the 
U.S. natural gas supply chain. It includes well drilling energy and 
emissions, as well as all ancillary systems used by the natural gas 
supply chain. It uses data from EIA, EPA, and other government sources, 
as well as data from peer-reviewed literature and fundamental 
engineering concepts to represent the energy and material flow of the 
entire natural gas supply chain.\146\ DOE also believes that the 
uncertainty bounds strengthen the LCA by accounting for variability in 
natural gas systems.\147\
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    \146\ See, e.g., LCA Update at 1-9; April 2019 LCA of Natural 
Gas Extraction and Power Generation, at 57-58 (Exh. 4-1). With 
regard to CLNG's concern about emissions from gathering and boosting 
stations within the natural gas value chain, NETL modeled these 
emissions based on the current state of science at the time of 
analysis. Field measurement activities and related research are 
currently focused on improving the understanding of methane 
emissions and the representativeness to regional operations. DOE 
agrees that this is an area of continual scientific research to 
improve upon previous understandings of the contribution of 
gathering and boosting operations to the total life cycle analysis.
    \147\ See, e.g., LCA GHG Update at 9, 32.
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 V. Discussion and Conclusions

    Since August 2014, DOE's 2014 LCA GHG Report has been an important 
part of DOE's decision-making in numerous non-FTA orders issued to 
date. Although Sierra Club challenged DOE's conclusions based on the 
2014 LCA GHG Report, the D.C. Circuit ruled in favor of DOE in 
2017.\148\ In 2018, DOE commissioned NETL to undertake the LCA GHG 
Update to ensure that the conclusions of the 2014 Report were still 
valid based on newer information, including the IPCC's updated 100-year 
GWP for methane.
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    \148\ See supra at Sec.  I.D (discussing Sierra Club I, 867 F.3d 
at 202).
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    NETL's detailed analysis, set forth in the LCA GHG Update dated 
September 12, 2019, is based on the most current available science, 
methodology, and data from the U.S. natural gas system to assess the 
GHGs associated with exports of U.S. LNG. The Update demonstrates that 
the conclusions of the 2014 LCA GHG Report have not changed. 
Specifically, the Update concludes that the use of U.S. LNG exports for 
power production in European and Asian markets will not increase GHG 
emissions from a life cycle perspective, when compared to regional coal 
extraction and consumption for power production.\149\
---------------------------------------------------------------------------

    \149\ LCA GHG Update at 32.
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    The LCA GHG Update estimates the life cycle GHG emissions of U.S. 
LNG exports to Europe and Asia, compared with certain other fuels used 
to produce electric power in those importing countries. While 
acknowledging uncertainty, the LCA GHG Update shows that, to the extent 
U.S. LNG exports are preferred over coal in LNG-importing nations, U.S. 
LNG exports are likely to reduce global GHG emissions on per unit of 
energy consumed basis for power production. Further, to the extent U.S. 
LNG exports are preferred over other forms of imported natural gas, 
they are likely to have only a small impact on global GHG 
emissions.\150\ The key findings for U.S. LNG exports to Europe and 
Asia are summarized in Figures 1 and 2.\151\
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    \150\ See id. at 21, 32.
    \151\ See supra at Sec.  II.I.
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    Sierra Club continues to express its concern that exports of U.S. 
LNG may have a negative effect on the total amount of energy consumed 
in foreign nations and on global GHG emissions. The conclusions of the 
LCA GHG

[[Page 86]]

Update, combined with the observation that many LNG-importing nations 
rely heavily on fossil fuels for electric generation, suggest that 
exports of U.S. LNG may decrease global GHG emissions, although there 
is substantial uncertainty on this point, as indicated above.\152\ 
Further, based on the evidence, we see no reason to conclude that U.S. 
LNG exports will increase global GHG emissions in a material or 
predictable way. Neither Sierra Club nor the other commenters opposing 
the LCA GHG Update have provided sufficient evidence to rebut or 
otherwise undermine these findings.
---------------------------------------------------------------------------

    \152\ See LCA GHG Update at 32.
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    In sum, DOE finds that the LCA GHG Update is both fundamentally 
sound and supports the proposition that exports of LNG from the lower-
48 states will not be inconsistent with the public interest. As stated, 
DOE will consider each pending and future non-FTA application as 
required under the NGA and NEPA, based on the administrative record 
compiled in each individual proceeding.

    Signed in Washington, DC, on December 19, 2019.
Steven Winberg,
Assistant Secretary, Office of Fossil Energy.
[FR Doc. 2019-28306 Filed 12-31-19; 8:45 am]
 BILLING CODE 6450-01-P