[Federal Register Volume 85, Number 28 (Tuesday, February 11, 2020)]
[Proposed Rules]
[Pages 7672-7681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02358]


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DEPARTMENT OF ENERGY

10 CFR Part 590


Extending Natural Gas Export Authorizations to Non-Free Trade 
Agreement Countries Through the Year 2050

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                 FE Docket Nos.
----------------------------------------------------------------------------------------------------------------
Sabine Pass Liquefaction, LLC...................  [FE Docket No. 10-111-LNG].
Carib Energy (USA), LLC.........................  [FE Docket No. 11-141-LNG].
Freeport LNG Expansion, L.P. et al..............  [FE Docket No. 10-161-LNG].
Lake Charles Exports, LLC.......................  [FE Docket No. 11-59-LNG].

[[Page 7673]]

 
Dominion Cove Point LNG, LP.....................  [FE Docket No. 11-128-LNG].
Freeport LNG Expansion, L.P. et al..............  [FE Docket No. 11-161-LNG].
Cameron LNG, LLC................................  [FE Docket No. 11-162-LNG].
Southern LNG Company, LLC.......................  [FE Docket No. 12-100-LNG].
Gulf LNG Liquefaction Company, LLC..............  [FE Docket No. 12-101-LNG].
Jordan Cove Energy Project, L.P.................  [FE Docket No. 12-32-LNG].
CE FLNG, LLC....................................  [FE Docket No. 12-123-LNG].
Golden Pass Products, LLC.......................  [FE Docket No. 12-156-LNG].
Lake Charles LNG Export Co......................  [FE Docket No. 13-04-LNG].
MPEH LLC........................................  [FE Docket No. 13-26-LNG].
Cheniere Marketing LLC and Corpus Christi         [FE Docket Nos. 13-30-LNG], 13-42 LNG, & 13-121-LNG].
 Liquefaction, LLC.
Venture Global Calcasieu Pass...................  [FE Docket Nos. 13-69-LNG, 14-88-LNG, & 15-25 LNG].
Eos LNG LLC.....................................  [FE Docket No. 13-116-LNG].
Barca LNG LLC...................................  [FE Docket No. 13-118-LNG].
Magnolia LNG, LLC...............................  [FE Docket No. 13-132-LNG].
Delfin LNG, LLC.................................  [FE Docket No. 13-147-LNG].
Emera CNG, LLC..................................  [FE Docket No. 13-157-CNG].
SCT&E LNG, LLC..................................  [FE Docket No. 14-98-LNG].
Pieridae Energy (USA) Ltd.......................  [FE Docket No. 14-179-LNG].
American LNG Marketing, LLC.....................  [FE Docket No. 14-209-LNG].
Bear Head LNG Corporation and Bear Head LNG       [FE Docket No. 15-33-LNG].
 (USA).
Floridian Natural Gas Storage Co., LLC..........  [FE Docket No. 15-38-LNG].
G2 LNG LLC......................................  [FE Docket No. 15-45-LNG].
Texas LNG Brownsville LLC.......................  [FE Docket No. 15-62-LNG].
Sabine Pass Liquefaction, LLC...................  [FE Docket No. 15-63-LNG].
Strom Inc.......................................  [FE Docket No. 15-78-LNG].
Cameron LNG, LLC................................  [FE Docket No. 15-90-LNG].
Port Arthur LNG, LLC............................  [FE Docket No. 15-96-LNG].
Cameron LNG, LLC................................  [FE Docket No. 15-167-LNG].
Rio Grande LNG, LLC.............................  [FE Docket No. 15-190-LNG].
Air Flow North American Corp....................  [FE Docket No. 15-206-LNG].
Eagle LNG Partners Jacksonville, LLC............  [FE Docket No. 16-15-LNG].
SeaOne Gulfport, LLC............................  [FE Docket No. 16-22-CGL].
Venture Global Plaquemines LNG, LLC.............  [FE Docket No. 16-28-LNG].
Carib Energy (USA) LLC,.........................  [FE Docket No. 16-98-LNG].
Freeport LNG Expansion, L.P., et al.............  [FE Docket No. 16-108-LNG].
Lake Charles LNG Export Co......................  [FE Docket No. 16-109-LNG].
Lake Charles Exports, LLC.......................  [FE Docket No. 16-110-LNG].
Driftwood LNG LLC...............................  [FE Docket No. 16-144-LNG].
Eagle LNG Partners Jacksonville II, LLC.........  [FE Docekt No. 17-79-LNG].
Fourchon LNG, LLC...............................  [FE Docket No. 17-105-LNG].
Galveston Bay LNG, LLC..........................  [FE Docket No. 17-167-LNG].
Freeport LNG Expansion, L.P., et al.............  [FE Docket No. 18-26-LNG].
Corpus Christi Liquefaction Stage III, LLC......  [FE Docket No. 18-78-LNG].
Mexico Pacific Limited LLC......................  [FE Docket No. 18-70-LNG].
Energ[iacute]a Liquefaction, S. de R.L. de C.V..  [FE Docket No. 18-144-LNG].
Energ[iacute]a Costa Azul, S. de R.L. de C.V....  [FE Docket No. 18-145-LNG].
Annova LNG Common Infrastructure, LLC...........  [FE Docket No. 19-34-LNG].
Cheniere Marketing LLC and Corpus Christi         [FE Docket No. 19-124-LNG].
 Liquefaction, LLC.
Sabine Pass Liquefaction, LLC...................  [FE Docket No. 19-125-LNG].
Commonwealth LNG, LLC...........................  [FE Docket No. 19-134-LNG].
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AGENCY: Office of Fossil Energy, Department of Energy.

ACTION: Notice of proposed policy statement and request for comments.

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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice (Notice) of a proposed policy statement (Proposed 
Policy Statement or Proposal). DOE is proposing to extend the standard 
20-year term for authorizations to export natural gas from the lower-48 
states--including domestically produced liquefied natural gas (LNG), 
compressed natural gas, and compressed gas liquid--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). 
Under the Proposal, existing non-FTA authorization holders could apply 
to extend their export term through December 31, 2050, on a voluntary 
opt-in basis; existing applicants could amend their pending non-FTA 
application to request an export term through December 31, 2050, on a 
voluntary opt-in basis; and DOE would issue all future non-FTA export 
authorizations with a standard export term lasting through December 31, 
2050, unless a shorter term is requested by the applicant. In this 
document, DOE discusses the Proposed Policy Statement and invites 
comments on the Proposal. DOE is proposing this policy change under 
section 3(a) of the Natural Gas Act (NGA) and DOE's implementing 
regulations.

DATES: Comments are to be filed using procedures detailed in the Public 
Comment Procedures section no later than 4:30 p.m., Eastern time, March 
12, 2020.

[[Page 7674]]


ADDRESSES: 
    Electronic Filing of Comments Using Online Form: https://fossil.energy.gov/app/docketindex/docket/index/22.
    Regular Mail: U.S. Department of Energy (FE-34), Attn: Term 
Extension--Proposed Policy Statement, Office of Regulation, Analysis, 
and Engagement, Office of Fossil Energy, P.O. Box 44375, Washington, DC 
20026-4375.
    Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, 
etc.): U.S. Department of Energy (FE-34), Attn: Term Extension--
Proposed Policy Statement, Office of Regulation, Analysis, and 
Engagement, Office of Fossil Energy, Forrestal Building, Room 3E-042, 
1000 Independence Avenue SW, Washington, DC 20585.

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.

Bcf/d Billion Cubic Feet per Day
Bcf/yr Billion Cubic Feet per Year
CGL Compressed Gas Liquid
CNG Compressed Natural Gas
DOE U.S. Department of Energy
EIA U.S. Energy Information Administration
FE Office of Fossil Energy, U.S. Department of Energy
FTA Free Trade Agreement
GHG Greenhouse Gas
GWP Global Warming Potential
LCA Life Cycle Analysis
LNG Liquefied Natural Gas
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. Regulatory Background
    1. Public Interest Review for Non-FTA Export Authorizations
    2. DOE's Economic Studies Through 2017
    3. DOE's Environmental Studies
    4. DOE's Standard 20-Year Export Term for Non-FTA Authorizations
    C. Judicial Decisions Upholding DOE's Non-FTA Authorizations
    D. Recent Regulatory Developments
    1. 2018 LNG Export Study
    2. 2019 Life Cycle Greenhouse Gas Update
    E. Existing Non-FTA Authorizations and Pending Applications
II. Proposed Policy Statement
    A. Proposal To Extend Standard Term of Non-FTA Authorizations
    1. Basis for Proposal and Effect on Export Volume
    2. Comments of Cheniere Energy, Inc. Requesting Term Extension
    3. Canadian Export Term for LNG
    4. Summary of Proposal
    5. Potential Impact on FTA Authorizations and Applications
    B. Proposed Implementation Process
III. Invitation To Comment
IV. Public Comment Procedures
V. Administrative Benefits
VI. Approval of the Office of the Secretary

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 under 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,\2\ 
to countries with which the United States has entered into a free trade 
agreement (FTA) requiring national treatment for trade in natural gas 
(FTA countries).\3\ 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.'' \4\ 
Accordingly, this Proposed Policy Statement does not apply to existing 
or future FTA applications and authorizations. As discussed in Section 
II.A.5, however, DOE anticipates that, if this Proposal is adopted, FTA 
authorization holders likely will request a comparable extension in the 
export term of their existing FTA orders.
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    \1\ The authority to regulate the imports and exports of natural 
gas, including liquefied natural gas, 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\ In referring to natural gas in this Proposal, DOE refers 
primarily, but not exclusively, to LNG. To date, two non-FTA 
proceedings have involved other types of natural gas: Compressed 
natural gas (CNG) in FE Docket No. 13-157-CNG, and compressed gas 
liquid (CGL) in FE Docket No. 16-22-CGL. See 15 U.S.C. 717a(5) 
(definition of natural gas); 10 CFR 590.102(i) (same).
    \3\ 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.
    \4\ 15 U.S.C. 717b(c).
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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\
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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 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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    Before reaching a final decision, DOE must also comply with the 
National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et 
seq. DOE's environmental review process under NEPA may result in the 
preparation or adoption of an environmental impact statement (EIS) or 
environmental assessment (EA) describing the potential environmental 
impacts associated with the application.\9\ In other cases, DOE

[[Page 7675]]

may determine that an application is eligible for a categorical 
exclusion from the preparation or adoption of an EIS or EA, pursuant to 
DOE's regulations implementing NEPA.
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    \9\ Typically, the Federal agency responsible for permitting the 
export facility--either the Federal Energy Regulatory Commission or 
the U.S. Department of Transportation (DOT) Maritime Administration 
(MARAD)--serves as the lead agency in the NEPA review process, and 
DOE serves as a cooperating agency. Where no other Federal agency is 
responsible for permitting the export facility, DOE serves as the 
lead agency in the NEPA review process.
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B. Regulatory Background

1. 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.\10\ 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.'' \11\ 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.\12\
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    \10\ New Policy Guidelines and Delegations Order Relating to 
Regulation of Imported Natural Gas, 49 FR 6684 (Feb. 22, 1984) 
[hereinafter 1984 Policy Guidelines].
    \11\ Id. at 49 FR 6685.
    \12\ 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.'' \13\
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    \13\ 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,\14\ 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.
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    \14\ DOE Delegation Order No. 0204-111 was later rescinded by 
DOE Delegation Order No. 00-002.00 (] 2) (Dec. 6, 2001), and DOE 
Redelegation Order No. 00-002.04 (] 2) (Jan. 8, 2002).
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2. DOE's Economic Studies Through 2017
    Between 2011 and 2017, DOE commissioned four studies to examine the 
effects of U.S. LNG exports on the U.S. economy and energy markets.\15\ 
The first study, Effect of Increased Natural Gas Exports on Domestic 
Energy Markets, was performed by the U.S. Energy Information 
Administration (EIA) and published in January 2012 (EIA Study).\16\ The 
second study, Macroeconomic Impacts of LNG Exports from the United 
States, was performed by NERA Economic Consulting (NERA) and published 
in December 2012 (NERA Study and, together with the EIA Study, the 2012 
LNG Export Study).\17\ The third study, Effect of Increased Levels of 
Liquefied Natural Gas Exports on U.S. Energy Markets, was performed by 
EIA and published in October 2014 (2014 LNG Export Study).\18\ The 
fourth study, The Macroeconomic Impact of Increasing U.S. LNG Exports, 
was performed jointly by the Center for Energy Studies at Rice 
University's Baker Institute and Oxford Economics and published in 
October 2015 (2015 LNG Export Study).\19\ As relevant here, the 2015 
LNG Export Study included a case examining export volumes up to 28 Bcf/
d of natural gas, and the analysis covered through the year 2040.
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    \15\ Because there is no natural gas pipeline interconnection 
between Alaska and the lower 48 states, DOE generally views those 
LNG export markets as distinct.
    \16\ See 2012 LNG Export Study, 77 FR 73627 (Dec. 11, 2012), 
available at: http://energy.gov/sites/prod/files/2013/04/f0/fr_notice_two_part_study.pdf (notice of availability of the 2012 LNG 
Export Study).
    \17\ See id.
    \18\ U.S. Energy Info. Admin., Effect of Increased Levels of 
Liquefied Natural Gas Exports on U.S. Energy Markets (Oct. 2014), 
available at: https://www.eia.gov/analysis/requests/fe/pdf/lng.pdf.
    \19\ Center for Energy Studies at Rice University Baker 
Institute and Oxford Economics, The Macroeconomic Impact of 
Increasing U.S. LNG Exports (Oct. 29, 2015), available at: http://energy.gov/sites/prod/files/2015/12/f27/20151113_macro_impact_of_lng_exports_0.pdf; see also U.S. Dep't of 
Energy, Macroeconomic Impacts of LNG Exports Studies; Notice of 
Availability and Request for Comments, 80 F R 81300 (Dec. 29, 2015) 
(notice of availability of the 2014 and 2015 LNG Export Studies).
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    DOE relied on these studies, and the public comments received on 
each study, to better inform its public interest review under NGA 
section 3(a).\20\
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    \20\ For more information about the 2012, 2014, and 2015 LNG 
Export Studies, see U.S. Dep't of Energy, Study on Macroeconomic 
Outcomes of LNG Exports; Response to Comments Received on Study, 83 
FR 67251 (Dec. 28, 2018) [hereinafter 2018 Study Response to 
Comments].
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3. DOE's Environmental Studies
    On June 4, 2014, DOE issued two notices in the Federal Register 
proposing to evaluate different environmental aspects of the LNG 
production and export chain. First, DOE announced that it had conducted 
a review of existing literature on potential environmental issues 
associated with unconventional natural gas production in the lower-48 
states. The purpose of this review was to provide additional 
information to the public concerning the potential environmental 
impacts of unconventional natural gas exploration and production 
activities, including hydraulic fracturing. DOE published its draft 
report for public review and comment, entitled Draft Addendum to 
Environmental Review Documents Concerning Exports of Natural Gas from 
the United States (Draft Addendum).\21\ DOE received public comments on 
the Draft Addendum, and on August 15, 2014, issued the final Addendum 
with

[[Page 7676]]

its response to the public comments contained in Appendix B.\22\
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    \21\ Dep't of Energy, Draft Addendum to Environmental Review 
Documents Concerning Exports of Natural Gas From the United States, 
79 FR 32258 (June 4, 2014). DOE announced the availability of the 
Draft Addendum on its website on May 29, 2014.
    \22\ Dep't of Energy, Addendum to Environmental Review Documents 
Concerning Exports of Natural Gas From the United States, 79 FR 
48132 (Aug. 15, 2014) [hereinafter Addendum]; see also http://energy.gov/fe/addendum-environmental-review-documents-concerning-exports-natural-gas-united-states.
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    Second, 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. The purpose of this analysis was 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. DOE published the 
report entitled, Life Cycle Greenhouse Gas Perspective on Exporting 
Liquefied Natural Gas from the United States (LCA GHG Report).\23\ DOE 
also received public comments on the LCA GHG Report and responded to 
those comments in prior orders.\24\
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    \23\ Dep't of Energy, Life Cycle Greenhouse Gas Perspective on 
Exporting Liquefied Natural Gas From the United States, 79 FR 32260 
(June 4, 2014) [hereinafter LCA GHG Report]. DOE announced the 
availability of the LCA GHG Report on its website on May 29, 2014.
    \24\ See, e.g., Magnolia LNG, LLC, DOE/FE Order No. 3909, FE 
Docket No. 13-132-LNG, Opinion and Order Granting Long-Term, Multi-
Contract Authorization to Export Liquefied Natural Gas by Vessel 
From the Proposed Magnolia LNG Terminal to be Constructed in Lake 
Charles, Louisiana, to Non-Free Trade Agreement Nations, at 95-121 
(Nov. 30, 2016) (description of LCA GHG Report and response to 
comments).
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    DOE has made the Addendum and the LCA GHG Report, as well as the 
public comments received on each study, part of the record of each non-
FTA proceeding since 2014.
4. DOE's Standard 20-Year Export Term for Non-FTA Authorizations
    Both the NGA and DOE's regulations provide DOE with broad authority 
to attach conditions to non-FTA export authorizations. NGA section 3(a) 
states that DOE may grant an application for a non-FTA export 
authorization ``upon such terms and conditions as the [Secretary] may 
find necessary or appropriate.'' \25\ Similarly, under 10 CFR 590.404, 
DOE may ``issue a final opinion and order and attach such conditions 
thereto as may be required by the public interest after completion and 
review of the final record.'' \26\ However, neither NGA section 3(a) 
nor DOE's regulations prescribe a specific time period for a non-FTA 
authorization. For this reason, DOE has determined that it has 
discretion under 10 CFR 590.404 to impose a suitable term for non-FTA 
authorizations as appropriate, in light of the evidence in each 
proceeding.
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    \25\ 15 U.S.C. 717b(a).
    \26\ 10 CFR 590.404.
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    In 2011, DOE issued its first conditional long-term export 
authorization involving domestically produced LNG from the lower-48 
states to Sabine Pass Liquefaction, LLC (Sabine Pass) in DOE/FE Order 
No. 2961.\27\ In its application, Sabine Pass had requested an export 
term of 20 years. After reviewing the record evidence, DOE determined 
that a term of 20 years was consistent with the public interest, and 
DOE granted the conditional order for the requested 20-year term.\28\
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    \27\ See Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961, 
FE Docket No. 10-111-LNG, Opinion and Order Conditionally Granting 
Long-Term Authorization to Export Liquefied Natural Gas from Sabine 
Pass LNG Terminal to Non-Free Trade Agreement Nations, at 2, 20 
n.26, 42 (May 20, 2011) (Ordering Para. B). DOE later granted Sabine 
Pass's final order with a 20-year term (see DOE/FE Order No. 2961-A, 
issued on August 7, 2012).
    \28\ See Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961, 
at 2.
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    In 2013, DOE continued to issue long-term non-FTA authorizations 
for a standard 20-year term. DOE chose a 20-year term for two reasons. 
First, the economic analysis then-supporting DOE's authorizations--the 
2012 LNG Export Study--did not extend past 20 years at the time the 
authorizations were issued. In DOE/FE Order No. 3282, for example, 
Freeport LNG Expansion, L.P., et al. (Freeport) had requested a 25-year 
export term for its non-FTA authorization. DOE declined to authorize a 
25-year export term, and instead approved a 20-year term. DOE reasoned 
that, ``because the NERA study contains projections over a 20-year 
period beginning from the date of first export, . . . caution 
recommends limiting this conditional authorization to no longer than a 
20-year term beginning from the date of first export.'' \29\
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    \29\ See, e.g., Freeport LNG Expansion, L.P., et al., DOE/FE 
Order No. 3282, FE Docket No. 10-161-LNG, Order Conditionally 
Granting Long-Term, Multi-Contract Authorization to Export Liquefied 
Natural Gas by Vessel from the Freeport LNG Terminal on Quintana 
Island, Texas, to Non-Free Trade Agreement Nations, at 114 (May 17, 
2013) (Para. A, Term of the Authorization).
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    Second, in the same Freeport order, DOE recognized that ``LNG 
export facilities are capital intensive and that, to obtain financing 
for such projects, there must be a reasonable expectation that the 
authorization will continue for a term sufficient to support 
repayment.'' \30\ DOE found that a 20-year term ``is likely sufficient 
to achieve this result.'' \31\ For these reasons, DOE granted 
Freeport's conditional non-FTA order--and, later, its final non-FTA 
order--for a 20-year term, instead of the requested 25-year term.\32\
---------------------------------------------------------------------------

    \30\ Id. at 114-15.
    \31\ Id. at 115.
    \32\ See Freeport LNG Expansion, L.P., et al., DOE/FE Order No. 
3282-C, FE Docket No. 10-161-LNG, Final Opinion and Order Granting 
Long-Term, Multi-Contract Authorization to Export Liquefied Natural 
Gas by Vessel from the Freeport LNG Terminal on Quintana Island, 
Texas, to Non-Free Trade Agreement Nations, at 89 (Nov. 14, 2014) 
(Para. A, Term of the Authorization).
---------------------------------------------------------------------------

    DOE has continued to apply a policy of authorizing a 20-year export 
term for every long-term non-FTA order issued to date.\33\ For each 
final non-FTA order, the 20-year export term commences when the 
authorization holder begins commercial export of LNG from its 
facility.\34\
---------------------------------------------------------------------------

    \33\ The only exception involves a conditional authorization to 
export LNG to non-FTA countries from Alaska. DOE conditionally 
granted the applicant's request for a 30-year export term, citing 
unique aspects of that Alaska-based project. DOE has not yet issued 
a final order in that proceeding. See Alaska LNG Project, LLC, DOE/
FE Order No. 3643, FE Docket No. 14-96-LNG, Order Conditionally 
Granting Long-Term, Multi-Contract Authorization to Export Liquefied 
Natural Gas by Vessel from the Proposed Alaska LNG Terminal in 
Nikiski, Alaska, to Non-Free Trade Agreement Nations, at 35 (May 28, 
2015).
    \34\ DOE also allows: (i) A term for commercial export 
operations to commence--typically seven years--set from the date the 
order is issued; and (ii) a three-year ``make-up period'' following 
the end of the 20-year export term, during which the authorization 
holder may continue to export any ``make-up volume'' that it was 
unable to export during the 20-year export term. These provisions 
are not directly at issue in this Proposal.
---------------------------------------------------------------------------

C. 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; 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),\35\ and

[[Page 7677]]

three in a consolidated, unpublished opinion issued on November 1, 2017 
(Sierra Club II).\36\ Sierra Club subsequently withdrew its fifth and 
remaining petition for review.\37\
---------------------------------------------------------------------------

    \35\ Sierra Club vs. U.S. Dep't of Energy, 867 F.3d 189 (D.C. 
Cir. 2017) (denying petition of review of the LNG export 
authorization issued to Freeport LNG Expansion, L.P., et al.).
    \36\ 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).
    \37\ 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).
---------------------------------------------------------------------------

    In Sierra Club I, the D.C. Circuit concluded that DOE had complied 
with both NGA section 3(a) and NEPA in issuing the challenged non-FTA 
authorization. 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.'' 
\38\
---------------------------------------------------------------------------

    \38\ Sierra Club I, 867 F.3d at 203.
---------------------------------------------------------------------------

    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.'' 
\39\ 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.\40\
---------------------------------------------------------------------------

    \39\ Sierra Club, 703 Fed. Appx. 1 at *2.
    \40\ Id.
---------------------------------------------------------------------------

    The D.C. Circuit's decisions in Sierra Club I and II continue to 
guide DOE's review of applications to export LNG to non-FTA countries.

D. Recent Regulatory Developments

1. 2018 LNG Export Study
    In 2017, DOE commissioned NERA to conduct a new economic study, now 
referred to as the 2018 LNG Export Study.\41\ As with its prior 
economic studies, DOE commissioned the 2018 LNG Export Study to inform 
its determination of the public interest in pending and future non-FTA 
application proceedings. DOE published the 2018 LNG Export Study on its 
website on June 7, 2018,\42\ and concurrently provided notice of the 
availability of the Study.\43\
---------------------------------------------------------------------------

    \41\ See U.S. Dep't of Energy, Study on Macroeconomic Outcomes 
of LNG Exports; Notice of Availability of the 2018 LNG Export Study 
and Request for Comments, 83 FR 27314 (June 12, 2018) [hereinafter 
2018 Study Notice].
    \42\ See NERA Economic Consulting, Macroeconomic Outcomes of 
Market Determined Levels of U.S. LNG Exports (June 7, 2018), 
available at: https://www.energy.gov/sites/prod/files/2018/06/f52/Macroeconomic%20LNG%20Export%20Study%202018.pdf [hereinafter 2018 
LNG Export Study or 2018 Study].
    \43\ See 2018 Study Notice.
---------------------------------------------------------------------------

    Like DOE's prior economic studies, the 2018 Study analyzed the 
outcomes of different LNG export levels on the U.S. natural gas markets 
and the U.S. economy as a whole. Additionally, for the first time in a 
DOE-commissioned macroeconomic study, the 2018 LNG Export Study 
assessed the likelihood of different levels of ``unconstrained'' LNG 
exports, defined as market-determined levels of exports. The Study 
examined the period from the year 2020 through 2050, and was based, in 
part, on the projections in EIA's Annual Energy Outlook 2017 \44\ 
through 2050.\45\
---------------------------------------------------------------------------

    \44\ U.S. Energy Info. Admin., Annual Energy Outlook 2017 (with 
projections to 2050) (Jan. 5, 2017), available at: https://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf.
    \45\ See 2018 Study Notice, 83 FR 27316.
---------------------------------------------------------------------------

    DOE received 19 comments on the 2018 LNG Export Study. DOE 
summarized and responded to these comments in the Response to Comments 
document, published on December 28, 2018.\46\
---------------------------------------------------------------------------

    \46\ See 2018 Study Response to Comments, 83 FR 67260-67272.
---------------------------------------------------------------------------

    Based upon the record, DOE determined that the 2018 Study provides 
substantial support for non-FTA applications within the export volumes 
considered by the 2018 Study--ranging from 0.1 to 52.8 Bcf/d of natural 
gas.\47\ The principal conclusion of the 2018 LNG Export Study is that 
the United States will experience net economic benefits from the export 
of domestically produced LNG through the 30-year study period, i.e., 
from 2020 through 2050.\48\
---------------------------------------------------------------------------

    \47\ See id.
    \48\ See id. In its Response to Comments document, DOE also 
highlighted the key findings of the Study. See id. 83 FR 67273.
---------------------------------------------------------------------------

    Overall, DOE found that the 2018 LNG Export Study supports the 
proposition that exports of LNG from the lower-48 states, in volumes up 
to and including 52.8 Bcf/d of natural gas, will not be inconsistent 
with the public interest. DOE also stated that it would consider each 
application to export LNG as required under the NGA and NEPA based on 
the administrative record compiled in each individual proceeding.\49\
---------------------------------------------------------------------------

    \49\ See id.
---------------------------------------------------------------------------

2. 2019 Life Cycle Greenhouse Gas Update
    In 2018, DOE commissioned NETL to conduct an update to the 2014 LCA 
GHG Report, entitled Life Cycle Greenhouse Gas Perspective on Exporting 
Liquefied Natural Gas From the United States: 2019 Update (LCA GHG 
Update).\50\ As with the 2014 Report, the LCA GHG Update compared 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--were the same as the 2014 Report, the 2019 
LCA GHG Update contained the following three changes:
---------------------------------------------------------------------------

    \50\ 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.
---------------------------------------------------------------------------

     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); \51\
---------------------------------------------------------------------------

    \51\ 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.
---------------------------------------------------------------------------

     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 Fifth Assessment Report.\52\
---------------------------------------------------------------------------

    \52\ 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, 49279 (Sept. 19, 2019).

---------------------------------------------------------------------------

[[Page 7678]]

In all other respects, the LCA GHG Update was unchanged from the 2014 
Report.
    On September 19, 2019, DOE published notice of availability (NOA) 
of the LCA GHG Update and a request for comments.\53\ DOE received 
seven comments in response to the NOA. In a Response to Comments 
document that was effective on December 19, 2019, and published in the 
Federal Register on January 2, 2020, DOE responded to the public 
comments and summarized its conclusions drawn from the LCA GHG 
Update.\54\
---------------------------------------------------------------------------

    \53\ See id.
    \54\ See U.S. Dep't of Energy, Life Cycle Greenhouse Gas 
Perspective on Exporting Liquefied Natural Gas From the United 
States: 2019 Update--Response to Comments, 85 FR 72 (Jan. 2, 2020).
---------------------------------------------------------------------------

    As DOE explained, the analysis in the LCA GHG Update was 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 demonstrated that the conclusions of the 2014 LCA GHG 
Report have not changed. Specifically, the Update concluded 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.\55\
---------------------------------------------------------------------------

    \55\ See id. 85 FR 78, 85.
---------------------------------------------------------------------------

    The LCA GHG Update estimated 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 showed 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.\56\
---------------------------------------------------------------------------

    \56\ See id. 85 FR 85.
---------------------------------------------------------------------------

    The conclusions of the LCA GHG 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.\57\ Further, based on 
the evidence, DOE saw no reason to conclude that U.S. LNG exports will 
increase global GHG emissions in a material or predictable way.\58\
---------------------------------------------------------------------------

    \57\ See id. 85 FR 86.
    \58\ See id.
---------------------------------------------------------------------------

    In sum, DOE found that the LCA GHG Update supports the proposition 
that exports of LNG from the lower-48 states will not be inconsistent 
with the public interest. DOE stated it will evaluate each pending and 
future non-FTA application as required under the NGA and NEPA, based on 
the administrative record compiled in each individual proceeding.\59\
---------------------------------------------------------------------------

    \59\ See id.
---------------------------------------------------------------------------

E. Existing Non-FTA Authorizations and Pending Applications

    To date, DOE has issued 38 final long-term authorizations to export 
domestically produced (or U.S.) LNG or compressed natural gas to non-
FTA countries.\60\ 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.\61\ As noted 
above, each of these final non-FTA orders authorize an export term of 
20 years.
---------------------------------------------------------------------------

    \60\ 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).
    \61\ See id.
---------------------------------------------------------------------------

    Additionally, 18 long-term non-FTA applications requesting to 
export domestically produced LNG from the lower-48 states are currently 
pending before DOE. These applications represent a cumulative volume of 
24.5 Bcf/d of natural gas, or 8.94 trillion cubic feet per year.\62\
---------------------------------------------------------------------------

    \62\ U.S. Dep't of Energy, Summary of LNG Export Applications as 
of Jan. 8, 2020, available at: https://www.energy.gov/fe/downloads/summary-lng-export-applications-lower-48-states.
---------------------------------------------------------------------------

    To date, DOE also has authorized exports to FTA countries in a 
volume of 56.24 Bcf/d of natural gas. The volumes authorized for export 
to FTA and non-FTA countries, however, are not additive to one another. 
Rather, each order grants authority to export the entire volume of a 
facility to FTA or non-FTA countries, respectively, to provide the 
authorization holder with maximal flexibility in determining its export 
destinations.\63\ According to EIA estimates, U.S. domestic dry natural 
gas production for the year 2019 averaged a rate of 92.03 Bcf/d, well 
in excess of current long-term FTA and non-FTA authorizations (in non-
additive volumes of 56.24 Bcf/d and 38.06 Bcf/d, respectively).\64\
---------------------------------------------------------------------------

    \63\ See, e.g., Venture Global Plaquemines LNG, LLC, DOE/FE 
Order No. 4446, at 53 (Ordering Para. I) (as a condition of the 
order, ``Plaquemines LNG may not treat the FTA and non-FTA export 
volumes as additive to one another.'')
    \64\ U.S. Energy Info. Admin., ``Short-Term Energy Outlook'' 
(Jan. 14, 2020), available at: https://www.eia.gov/outlooks/steo/data/browser/#/?v=15&f=A&s=0&maptype=0&ctype=linechart (Table 5a, 
U.S. Natural Gas Supply, Consumption, and Inventories, ``Total Dry 
Gas Production'').
---------------------------------------------------------------------------

    Finally, DOE notes that the amount of U.S. LNG export capacity that 
is currently operating or under construction totals 15.54 Bcf/d of 
natural gas across eight large-scale export projects in the lower-48 
states.\65\
---------------------------------------------------------------------------

    \65\ U.S. Energy Info. Admin., U.S. Liquefaction Capacity (Jan. 
30, 2020), available at: https://www.eia.gov/naturalgas/U.S.liquefactioncapacity.xlsx (total of 15.54 Bcf/d calculated by 
adding Column N in ``Existing & Under Construction'' worksheet).
---------------------------------------------------------------------------

II. Proposed Policy Statement

A. Proposal To Extend Standard Term of Non-FTA Authorizations

1. Basis for Proposal and Effect on Export Volume
    Recently, authorization holders have indicated that a 30-year 
export term would better match the operational life of their physical 
asset--the LNG export facility--allowing them more security in 
financing their facility and maximizing their ability to contract for 
exports. LNG export terminals are typically designed for a service life 
of 30 to 50 years.\66\ Although DOE has limited its non-FTA export 
authorizations to a 20-year export term based on the projections in the 
2012, 2014, and 2015 LNG Export Studies, that limitation is no longer 
required based on the findings of the 2018 LNG Export Study that 
included analysis on an expanded time period. Because the 2018 LNG 
Export Study considered unconstrained (or market-determined) levels of 
LNG exports and included analysis through the year 2050, the 2018 Study 
supports export terms lasting through December 31, 2050.\67\
---------------------------------------------------------------------------

    \66\ See, e.g., Texas LNG Brownsville LLC, Order Granting 
Authorization Under Section 3 of the Natural Gas Act, 169 FERC ] 
61,130, at ] 6 (Nov. 22, 2019) (stating that the minimum expected 
operational life of the LNG terminal is 25-30 years); Federal Energy 
Regulatory Comm'n, Gulf LNG Liquefaction Project Final Environmental 
Impact Statement, Docket No. CP15-521-000, at 4-197 (Apr. 17, 2019), 
available at: https://www.ferc.gov/industries/gas/enviro/eis/2019/04-17-19-FEIS/FEIS.pdf (the expected physical operational service 
life of the LNG terminal is 50 years); International Gas Union, 2019 
World LNG Report, at 35 (Apr. 2, 2019) (discussing LNG facilities in 
operation for ``35 years or longer'').
    \67\ See supra at Sec.  I.D.1.
---------------------------------------------------------------------------

    A proposed change in export terms through the year 2050 would not 
alter the maximum daily rate of export currently approved under each 
existing non-FTA authorization. The maximum daily rate of export, set 
in billion cubic

[[Page 7679]]

feet per day (Bcf/d), is already based on each facility's maximum 
approved liquefaction production capacity as set by the agency 
approving the siting and construction of the facility--either the 
Federal Energy Regulatory Commission or the U.S. Maritime 
Administration (see supra note 9). But, by extending the period over 
which these exports would occur, a term extension would provide a 
mechanism for existing authorization holders to increase the total 
volume of LNG exports over the life of their authorization.
    For the non-FTA applications currently pending before DOE 
(involving exports from the lower-48 states), the total requested 
export volume for each application also would increase if DOE 
ultimately were to grant each application for an export term lasting 
through the year 2050 (as opposed to the standard 20-year term).
    In sum, the Proposed Policy Statement, if adopted, would not 
increase the approved rate of exports from a particular facility, but 
it would result in an increase in the total approved volume of exports 
from each participating facility due to the longer export term. DOE 
notes that the 2018 LNG Export Study and the recent EIA Annual Energy 
Outlooks assume a steady rate of exports between 2040 and 2050.
2. Comments of Cheniere Energy, Inc. Requesting Term Extension
    On July 27, 2018, Cheniere Energy, Inc. (Cheniere) filed comments 
in the 2018 LNG Export Study proceeding.\68\ Cheniere is the parent 
company of three companies that currently export U.S. LNG under long-
term authorizations: Sabine Pass Liquefaction, LLC; Cheniere Marketing, 
LLC; and Corpus Christi Liquefaction, LLC. As part of its comments, 
Cheniere asked DOE to: (i) begin issuing export authorizations with a 
term of 30 years based on the analysis provided in the 2018 LNG Export 
Study, and (ii) provide a procedure whereby authorization holders with 
existing 20-year authorizations (such as Cheniere's subsidiaries) could 
request such a term extension.\69\
---------------------------------------------------------------------------

    \68\ Cheniere Energy, Inc., Comments on the 2018 LNG Export 
Study (July 27, 2018), available at: https://fossil.energy.gov/app/DocketIndex/docket/DownloadFile/567 [hereinafter Cheniere Comments].
    \69\ Id. at 5.
---------------------------------------------------------------------------

    In support of this request, Cheniere first noted that the 2018 LNG 
Export Study extends for 30 years and shows macroeconomic benefits to 
the United States over the entire period.\70\ Second, Cheniere asserted 
that it has received interest from LNG buyers who are seeking contracts 
that extend beyond 20 years. Cheniere stated that this interest in U.S. 
LNG may be ``inhibited'' if the seller lacks export authority over the 
entire contract term.\71\ Cheniere further stated that, once LNG 
projects enter operation, the flexibility to extend contracts beyond 
the initial 20-year term will be even more important. Cheniere 
maintained that, for foreign buyers deciding between U.S. LNG and 
alternative long-term sources, a 30-year term may prove decisive.\72\
---------------------------------------------------------------------------

    \70\ Id. (citing 2018 LNG Export Study at Appendix F).
    \71\ Id. at 5-6.
    \72\ Id. at 6.
---------------------------------------------------------------------------

3. Canadian Export Term for LNG
    On December 4, 2019, Canada granted its first 40-year LNG export 
license, which it issued to Chevron Canada Limited (Chevron) for a 
proposed LNG export facility called the Kitimat LNG project.\73\ Under 
the terms of that license, Chevron is authorized to export LNG from 
Canada in a volume of 996.93 billion cubic feet per year (Bcf/yr) of 
natural gas for a term of 40 years beginning on the date of first 
export--with a period of 10 years to commence exports.\74\ Canada's 
regulatory agency, the Canada Energy Regulator,\75\ approved the 
requested 40-year export term over an argument by a commenter that 
Canada's existing natural gas forecasts supported an export term of 
only 25 years.\76\ In rejecting this argument, the Canada Energy 
Regulator found that ``the natural gas resource base in Canada, as well 
as North America overall, is large and can accommodate reasonably 
foreseeable Canadian demand, including the natural gas exports proposed 
in this Application, and a plausible potential increase in demand'' 
over a 40-year export term.\77\ This recent development underscores the 
importance of U.S. LNG export projects being able to offer the same or 
similar contract terms as their Canadian counterparts.
---------------------------------------------------------------------------

    \73\ See Canada Energy Regulator, Letter Decision, Application 
of Chevron Canada Limited for a 40-Year License to Export Natural 
Gas as Liquefied Natural Gas (LNG), at 6 & Exh. 1 (Dec. 4, 2019) 
[hereinafter Canada Energy Regulator Decision], available at: 
https://docs2.cer-rec.gc.ca/ll-eng/llisapi.dll/fetch/2000/90466/94153/552726/3760154/3760155/3893823/C03430-1_CER_%E2%80%93_Letter_Decision_%E2%80%93_Chevron_Application_for_a_40-year_Licence_to_Export_LNG_-_A7A5Z5.pdf?nodeid=3891530&vernum=-2.
    \74\ See id. at 1 & Appendix I.
    \75\ On August 28, 2019, Canada's National Energy Board became 
the Canada Energy Regulator. See id. at 1 n.1.
    \76\ See Canada Energy Regulator Decision at 3.
    \77\ Id. at 6.
---------------------------------------------------------------------------

4. Summary of Proposal
    Based on the 2018 LNG Export Study, the LCA GHG Update, and the 
current status of the U.S. LNG export market, DOE believes there is new 
evidence to support changing from the standard 20-year export term for 
non-FTA orders to an extended export term with an end date of December 
31, 2050. This Proposed Policy Statement, if adopted, would effectively 
extend the export term for existing authorization holders from 20 to 30 
(or more) years, depending on when they commenced (or will commence) 
export operations.
    For example, Sabine Pass Liquefaction, LLC received DOE's first 
final long-term non-FTA authorization (DOE/FE Order No. 2961-A) on 
August 7, 2012, and began exporting LNG in February 2016.\78\ In 
addition to Sabine Pass, seven other non-FTA authorization holders are 
exporting LNG to date (Dominion Energy Cove Point LNG, LP; Cheniere 
Marketing, LLC; Corpus Christi Liquefaction, LLC; Cameron LNG, LLC; 
Freeport LNG Expansion, L.P., et al.; American LNG Marketing LLC; and 
Southern LNG Company, LLC).\79\ If this Proposal is adopted and these 
authorization holders elect to apply for an extended export term, they 
ultimately could have authority to export for more than 30 years in 
total. For example, if Sabine Pass were to obtain an extended export 
term for Order No. 2961-A through December 31, 2050, it ultimately 
would be authorized to export LNG for a total of 38 years, with an 
actual export period of up to 34 years, 10 months (if Sabine Pass 
exported continuously through the year 2050).
---------------------------------------------------------------------------

    \78\ See supra at Sec.  I.B.4.
    \79\ See U.S. Dep't of Energy, Office of Fossil Energy, LNG 
Monthly (Dec. 2019), at 9-25 (Tables 2a(i)-2a(vi), 2b), available 
at: https://www.energy.gov/sites/prod/files/2019/12/f69/LNG%20Monthly%202019_0.pdf (identifying exporters of U.S. LNG). DOE 
notes that Southern LNG Company, LLC began exporting LNG in December 
2019, but those exports are not yet reflected in DOE's LNG Monthly 
report.
---------------------------------------------------------------------------

    For the majority of existing authorization holders, however, this 
Proposal would result in a maximum 30-year export term (depending on 
whether and when the authorization holders begin exporting LNG). 
Likewise, the Proposal would provide up to a 30-year export term for 
future authorizations issued beginning in 2020.
    Under this Proposal, the December 31, 2050 date would be the end of 
the authorization period for all non-FTA exports, inclusive of any 
``make-up'' export periods.\80\ DOE will continue to

[[Page 7680]]

monitor developments in the LNG export market, however, including EIA's 
projections about natural gas supply and demand. Consistent with its 
longstanding practice, DOE anticipates that it will commission new 
economic studies and consider any extensions in the export period 
beyond the year 2050 at the appropriate time in the future.\81\
---------------------------------------------------------------------------

    \80\ See supra note 34.
    \81\ DOE previously affirmed its commitment to export 
authorizations issued under the NGA, including existing and future 
long-term non-FTA authorizations at issue under this Proposal. See 
U.S. Dep't of Energy, Policy Statement Regarding Long-Term 
Authorizations to Export Natural Gas to Non-Free Trade Agreement 
Countries, 83 FR 28841, 28843 (June 21, 2018) (stating that 
authorization holders and interested stakeholders ``should have the 
utmost confidence in the validity of DOE/FE's LNG export 
authorizations for the full term of each non-FTA order'').
---------------------------------------------------------------------------

5. Potential Impact on FTA Authorizations and Applications
    This Proposal does not apply to FTA applications and 
authorizations, since DOE is required to grant FTA applications 
``without modification or delay'' under NGA section 3(c). Because of 
this statutory standard, applicants for FTA orders are not subject to 
DOE's standard 20-year term for non-FTA authorizations, and numerous 
FTA orders already have export terms of 25 or more years. Nonetheless, 
authorization holders typically apply for both FTA and non-FTA 
authorizations, and they prefer to align their FTA and non-FTA exports 
over the same time period for administrative efficiencies. Therefore, 
if this Proposal is adopted, DOE anticipates that authorization holders 
may elect to request a comparable extension in the export term of their 
existing FTA authorization(s) or any pending FTA applications.

B. Proposed Implementation Process

    DOE proposes to implement the Proposed Policy Statement as follows:
    (1) For existing non-FTA authorizations: Existing authorization 
holders would request the change on a voluntary opt-in basis. 
Specifically, each non-FTA authorization holder would file an 
application requesting an amendment to its authorization to extend its 
export term through December 31, 2050, with an attendant increase in 
the total export volume over the life of the authorization;
    (2) For pending non-FTA applications: Existing applicants would 
request the change as an amendment to their pending application, on a 
voluntary opt-in basis.\82\ Each applicant would file an amendment to 
its application to extend its requested export term through December 
31, 2050, with an attendant increase in the total export volume over 
the life of the authorization; and
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    \82\ See 10 CFR 590.204.
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    (3) For future applications: The extended term would become DOE's 
standard export term for all future non-FTA authorizations. 
Accordingly, for any application filed after the date the Proposed 
Policy Statement is finalized (if it is adopted), the applicant would 
request an export term lasting through December 31, 2050, unless the 
applicant prefers a shorter export term.
    In each individual docket proceeding, the authorization holder or 
applicant would be required to submit an application (for #1 and #3) or 
an amendment to its pending application (for #2) with relevant facts 
and argument supporting the term request.\83\ DOE would provide notice 
of the application or amendment in the Federal Register.\84\ 
Additionally, if this Proposed Policy Statement is adopted, DOE 
anticipates that it would provide suggested application templates on 
its website (including an option for consolidated non-FTA and FTA 
application proceedings, see supra at Section II.A.5) to ensure more 
consistent, streamlined proceedings.
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    \83\ See 10 CFR 590.201, 590.202, 590.204.
    \84\ See 10 CFR 590.205.
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    Following the notice and comment period in each proceeding, DOE 
would conduct a public interest analysis of the application (or amended 
application) under NGA section 3(a). DOE would also have to comply with 
NEPA, as discussed herein. For existing non-FTA orders, the public 
interest analysis would be limited to the application for an extended 
export term--meaning an intervenor or protestor could challenge the 
requested extension but not the existing non-FTA order. Consistent with 
its established practice, DOE would respond to any comments received in 
its final order on each application (or amendment) requesting the 
extended export term.
    DOE notes that, in Cheniere's comments on the 2018 LNG Export Study 
requesting that DOE implement a 30-year export term, Cheniere urged DOE 
to consider a ``consolidated proceeding'' for all existing 
authorizations. Under this approach, Cheniere stated that DOE should 
``consider the [export term] extension of all existing authorizations 
in a single proceeding . . . because the public interest question in 
each case is identical.'' \85\ Cheniere also asserted that DOE's 
decision to extend all existing export terms in a consolidated 
proceeding would be eligible for a categorical exclusion from NEPA 
\86\--specifically, categorical exclusion B5.7 (10 CFR part 1021, 
subpart D, appendix B5).\87\
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    \85\ Cheniere Comments at 6.
    \86\ Id. at 6-7.
    \87\ See 10 CFR 1021.410, appendix B to subpart D of part 1021, 
Categorical Exclusion B5.7 (``Approvals or disapprovals of new 
authorizations or amendments of existing authorizations to import or 
export natural gas under section 3 of the Natural Gas Act that 
involve minor operational changes (such as changes in natural gas 
throughput, transportation, and storage operations) but not new 
construction.'').
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    As indicated, DOE is currently proposing a voluntary application 
process for existing authorization holders that would be adjudicated in 
each individual proceeding (#1). DOE believes that not every 
authorization holder may want to have an extended export term, and that 
the public interest considerations in individual proceedings may vary. 
Additionally, DOE takes no position on Cheniere's suggestion that any 
decision by DOE to extend an existing export term would be eligible for 
a categorical exclusion from NEPA (such as categorical exclusion B5.7). 
If this Proposed Policy Statement is adopted, DOE would comply with its 
NEPA obligations in each individual application proceeding, consistent 
with its current practice.\88\
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    \88\ See supra at Sec.  I.A.
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III. Invitation To Comment

    In response to this document, any person may file comments 
addressing the Proposed Policy Statement. The comments will help to 
inform DOE's decision as to whether to adopt the Proposed Policy 
Statement for use in current and future non-FTA proceedings. DOE 
invites comment on any aspect of the Proposed Policy Statement, 
including but not limited to the potential benefits and impacts 
associated with the Proposal and the voluntary opt-in process for 
existing authorization holders and applicants. Interested parties will 
be provided 30 days from the date of publication of this Notice of 
proposed policy statement in which to submit their comments.

IV. Public Comment Procedures

    DOE is not establishing a new proceeding or docket in this 
document. Comments submitted in compliance with the instructions in 
this document will be placed in the administrative record for all of 
the above-referenced proceedings and need only be submitted once.
    Additionally, the submission of comments in response to this Notice 
of proposed policy statement will not make commenters parties to any of 
the affected dockets. Persons with an

[[Page 7681]]

interest in the outcome of one or more of the affected dockets already 
have been given an opportunity to intervene in or protest those matters 
by complying with the procedures established in the notice of 
application issued in each respective docket and published in the 
Federal Register. Future opportunities for intervention or protest will 
be published in the Federal Register only for the applications to 
extend the term.
    Comments may be submitted using one of the following methods:
    (1) Submitting the comments using the online form at https://fossil.energy.gov/app/docketindex/docket/index/22.
    (2) Mailing an original and three paper copies of the filing to the 
Office of Regulation, Analysis, and Engagement at the address listed in 
ADDRESSES; or
    (3) Hand delivering an original and three paper copies of the 
filing to the Office of Regulation, Analysis, and Engagement at the 
address listed in ADDRESSES.
    For administrative efficiency, DOE prefers comments to be filed 
electronically using the online form (method 1). All comments must 
include a reference to ``Term Extension--Proposed Policy Statement'' in 
the title line. The record in the above-referenced proceedings will 
include all comments received in response to this Notice of proposed 
policy statement. DOE will review the comments received on a 
consolidated basis.
    The Proposed Policy Statement is available for inspection and 
copying in the Division of Natural Gas Regulation docket room, Room 3E-
042, 1000 Independence Avenue SW, Washington, DC 20585. The docket room 
is open between the hours of 8:00 a.m. and 4:30 p.m., Monday through 
Friday, except Federal holidays. Additionally, the Proposed Policy 
Statement and any comments filed in response to this document will be 
available on the following DOE website: https://fossil.energy.gov/app/docketindex/docket/index/22.

V. Administrative Benefits

    In this Proposed Policy Statement, DOE is not proposing any new 
requirements for applicants or authorization holders under 10 CFR part 
590. Rather, DOE's intent is to minimize administrative burdens and to 
enhance certainty for authorization holders in the U.S. natural gas 
export market, as well as for those who may purchase U.S. LNG.

VI. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this Proposed 
Policy Statement.

    Signed in Washington, DC, on January 31, 2020.
Steven Eric Winberg,
Assistant Secretary, Office of Fossil Energy.
[FR Doc. 2020-02358 Filed 2-10-20; 8:45 am]
 BILLING CODE 6450-01-P