[Federal Register Volume 85, Number 165 (Tuesday, August 25, 2020)]
[Rules and Regulations]
[Pages 52237-52248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16836]



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 Rules and Regulations
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  Federal Register / Vol. 85, No. 165 / Tuesday, August 25, 2020 / 
Rules and Regulations  

[[Page 52237]]



DEPARTMENT OF ENERGY

10 CFR Part 590


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

AGENCY: Office of Fossil Energy, Department of Energy.

ACTION: Notice of final policy statement and response to comments.

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

------------------------------------------------------------------------
                                                     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].
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,
Liquefaction, LLC............................  13-42 LNG, & 13-121-LNG].
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-
 (USA).                                         LNG].
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].

[[Page 52238]]

 
Driftwood LNG LLC............................  [FE Docket No. 16-144-
                                                LNG].
Eagle LNG Partners Jacksonville II, LLC......  [FE Docket 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].
ECA 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............  [FE Docket No. 19-124-
                                                LNG].
Christi Liquefaction, LLC....................  .........................
Sabine Pass Liquefaction, LLC................  [FE Docket No. 19-125-
                                                LNG].
Commonwealth LNG, LLC........................  [FE Docket No. 19-134-
                                                LNG].
Port Arthur LNG Phase II, LLC................  [FE Docket No. 20-23-
                                                LNG].
Epcilon LNG, LLC.............................  [FE Docket No. 20-31-
                                                LNG].
------------------------------------------------------------------------

SUMMARY: The U.S. Department of Energy's (DOE) Office of Fossil Energy 
(FE) will act on applications and amendments requesting to export 
domestically produced natural gas--including liquefied natural gas 
(LNG), compressed natural gas, and compressed gas liquid--from the 
lower-48 states to non-free trade agreement (non-FTA) countries for a 
term ending on December 31, 2050, discontinuing its practice of issuing 
standard 20-year export terms. In this Final Policy Statement, DOE 
responds to the 22 public comments received on the Proposed Policy 
Statement and describes the implementation process for long-term non-
FTA authorization holders and applicants to request this term 
extension, and for DOE to adjudicate each request.

DATES: This policy statement is effective on August 25, 2020.

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 Edward Toyozaki, 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) 586-0126; [email protected] or 
[email protected].

SUPPLEMENTARY INFORMATION:
    Acronyms and Abbreviations. Frequently used acronyms and 
abbreviations are set forth below for reference.

AEO Annual Energy Outlook
API American Petroleum Association
Bcf/d Billion Cubic Feet per Day
Bcf/yr Billion Cubic Feet per Year
CPP Clean Power Plan
CLNG Center for Liquefied Natural Gas
DECP Dominion Energy Cove Point LNG, LP
DOE U.S. Department of Energy
EA Environmental Assessment
EIA U.S. Energy Information Administration
EIS Environmental Impact Statement
FE Office of Fossil Energy, U.S. Department of Energy
FTA Free Trade Agreement
GDP Gross Domestic Product
GHG Greenhouse Gas
IECA Industrial Energy Consumers of America
LCA Life Cycle Analysis
LNG Liquefied Natural Gas
NEPA National Environmental Policy Act of 1969
NETL National Energy Technology Laboratory
NGA Natural Gas Act
NGSA Natural Gas Supply Association

Table of Contents

I. Authority and Background
II. Public Comments and DOE's Responses
    A. Economic Benefits of the Term Extension
    B. Distributional Impacts
     1. Gross Domestic Product (GDP) and Consumer Welfare
     2. Sectoral Impacts
    C. Market-Based Export Levels and Price Impacts
    D. International Trade and Geopolitical Impacts
    E. Environmental Issues
    F. Categorical Exclusion From NEPA for Existing Non-FTA 
Authorizations
    G. Clarification of Export Limits
III. Final Policy Statement
    A. Extended Term for Long-Term Non-FTA Authorizations
    B. Implementation Process
    C. Alignment of FTA Export Terms
IV. Administrative Benefits
V. Approval of the Office of the Secretary

I. Authority and Background

    DOE is responsible for authorizing exports of natural gas, 
including LNG,\1\ to foreign countries pursuant to section 3 of the 
Natural Gas Act (NGA), 15 U.S.C. 717b.\2\ The policy announced in this 
notice is specific to applications to export natural gas 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).\3\ 
For such applications, NGA section 3(a) authorizes the exportation of 
natural gas from the United States unless DOE determines that doing so 
``will not be consistent with the public interest.'' \4\ DOE has 
consistently interpreted this provision as creating a rebuttable 
presumption favoring export authorization.\5\ Accordingly, DOE will 
conduct an informal adjudication and grant a non-FTA application unless 
DOE finds that

[[Page 52239]]

the proposed exportation of natural gas will not be consistent with the 
public interest.\6\
---------------------------------------------------------------------------

    \1\ In referring to natural gas, DOE refers primarily, but not 
exclusively, to LNG. To date, two non-FTA proceedings have involved 
types of natural gas other than LNG: 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).
    \2\ 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.
    \3\ 15 U.S.C. 717b(a). This Final Policy Statement does not 
apply to exports to FTA countries under section 3(c) of the NGA, 15 
U.S.C. 717b(c). DOE recognizes, however, that authorization holders 
and applicants likely will seek to align their long-term non-FTA 
export terms under this Final Policy Statement with their FTA export 
terms, as discussed herein. See infra Sec.  III.C.
    \4\ 15 U.S.C. 717b(a).
    \5\ 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)).
    \6\ 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).
---------------------------------------------------------------------------

    Before reaching a final decision, DOE must also comply with the 
National Environmental Policy Act of 1969 (NEPA).\7\ 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.\8\ In other cases, DOE 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.\9\
---------------------------------------------------------------------------

    \7\ 42 U.S.C. 4321 et seq.
    \8\ Typically, the federal agency responsible for permitting the 
export facility--either the Federal Energy Regulatory Commission or 
the U.S. Department of Transportation's Maritime Administration--
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.
    \9\ In prior non-FTA proceedings where DOE has determined that a 
categorical exclusion under NEPA is appropriate, DOE has relied on 
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.'').
---------------------------------------------------------------------------

    Both the NGA and DOE's regulations (10 CFR 590.404) provide DOE 
with broad authority to attach conditions to non-FTA export 
authorizations.\10\ 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 long-term 
non-FTA authorizations, in light of the evidence in each 
proceeding.\11\
---------------------------------------------------------------------------

    \10\ For purposes of this policy, DOE uses the terms 
``authorization'' and ``order'' interchangeably.
    \11\ Under DOE practice, ``long-term'' refers to authorizations 
and contracts greater than two years in duration.
---------------------------------------------------------------------------

    For nearly a decade, DOE has issued long-term authorizations to 
export LNG (and compressed natural gas) produced from the lower-48 
states to non-FTA countries for a standard term of 20 years.\12\ As set 
forth in each order, the 20-year term begins when the authorization 
holder commences commercial export from its facility.\13\ DOE also 
allows a term for commercial export operations to commence--typically 
seven years--set from the date the order is issued, and 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.\14\
---------------------------------------------------------------------------

    \12\ See U.S. Dep't of Energy, 10 CFR part 590; Extending 
Natural Gas Export Authorizations to Non-Free Trade Agreement 
Countries Through the Year 2050; Notice of Proposed Policy Statement 
and Request for Comments, 85 FR 7672, 7676 (Feb. 11, 2020) 
[hereinafter Proposed Policy Statement] (explaining basis for 20-
year term). This Final Policy Statement applies to exports of 
natural gas produced from the lower-48 states. Because there is no 
natural gas pipeline interconnection between Alaska and the lower 48 
states, DOE generally views those LNG export markets as distinct.
    \13\ See, e.g., Jordan Cove Energy Project L.P., DOE/FE Order 
No. 3413-A, FE Docket No. 12-32-LNG, Final Opinion and Order 
Granting Long-Term Authorization to Export Liquefied Natural Gas to 
Non-Free Trade Agreement Nations, at 123 (Ordering Para. A) (July 6, 
2020), available at: https://www.energy.gov/sites/prod/files/2020/07/f76/3143a.pdf.
    \14\ See id. at 123 (Ordering Paras. B & C).
---------------------------------------------------------------------------

    To date, DOE has issued 43 final long-term non-FTA authorizations 
to export domestically produced LNG and compressed natural gas from the 
lower-48 states--each with an export term of 20 years. These 
authorizations total a cumulative volume of 45.89 billion cubic feet 
(Bcf) per day (Bcf/d) of natural gas, or approximately 16.7 trillion 
cubic feet per year.\15\ Additionally, 16 long-term non-FTA 
applications requesting to export domestically produced LNG or 
compressed gas liquid from the lower-48 states are currently pending 
before DOE.\16\
---------------------------------------------------------------------------

    \15\ See id. at 112-16. This volume includes existing 
authorizations involving U.S. natural gas produced in the lower-48 
states and liquefied in Canada and Mexico for export to non-FTA 
countries. 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. See U.S. Energy Info. Admin., U.S. Liquefaction 
Capacity (Apr. 22, 2020), available at: https://www.eia.gov/naturalgas/U.S.liquefactioncapacity.xlsx (total of 15.54 Bcf/d 
calculated byadding Column N in the ``Existing & Under 
Construction'' worksheet).
    \16\ U.S. Dep't of Energy, Summary of LNG Export Applications as 
of July 6, 2020, available at: https://www.energy.gov/fe/downloads/summary-lng-export-applications-lower-48-states. This number 
includes one pending application involving U.S. natural gas produced 
in the lower-48 states, proposed to be liquefied in Mexico for 
export to non-FTA countries.
---------------------------------------------------------------------------

    On February 11, 2020, DOE published a notice in the Federal 
Register proposing to extend this standard 20-year term for non-FTA 
authorizations (Proposed Policy Statement or Proposal).\17\ Publication 
of the notice began a 30-day public comment period that ended on March 
12, 2020. In the Proposed Policy Statement, DOE proposed an end date of 
December 31, 2050, for non-FTA exports, inclusive of any make-up 
period. DOE explained that, under this change, existing authorization 
holders would be able to extend their export term from 20 to 30 (or 
more) years, depending on when the authorization holder begins 
exporting LNG.\18\ DOE stated, however, that for the majority of 
existing authorization holders, the proposed term extension would 
result in a maximum 30-year export term. Likewise, DOE stated that it 
would provide up to a 30-year export term--through December 31, 2050--
for new authorizations issued beginning this year (i.e., in 2020). DOE 
explained that, 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.
---------------------------------------------------------------------------

    \17\ Proposed Policy Statement, 85 FR 7678-7679.
    \18\ Id., 85 FR 7679.
---------------------------------------------------------------------------

    The Proposed Policy Statement described an implementation process 
based on the status of the authorization holder or applicant, as 
follows:

    (1) Existing non-FTA authorization holders would apply to DOE to 
extend their export term through December 31, 2050, on a voluntary 
opt-in basis;
    (2) Existing non-FTA applicants would amend their pending non-
FTA application to request an export term through December 31, 2050, 
on a voluntary opt-in basis; and
    (3) DOE would issue all future non-FTA export authorizations 
with a standard export term lasting through December 31, 2050, 
unless a shorter term was requested by the applicant.

DOE explained that, in each individual non-FTA 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. 
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 also would have to comply with 
NEPA, as discussed herein.
    DOE offered two principal reasons for this proposed term 
extension.\19\ First, DOE stated that there is new evidence

[[Page 52240]]

to support changing from the standard 20-year export term to an export 
term with an end date of December 31, 2050. DOE cited its 2018 LNG 
Export Study, which was performed by NERA Economic Consulting 
(NERA).\20\ 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.\21\ DOE explained that, although it had 
limited its existing non-FTA export authorizations to a 20-year export 
term based on the projections in its prior 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.\22\ 
Specifically, because the 2018 LNG Export Study considered 
unconstrained (or market-determined) levels of LNG exports and included 
analysis through the year 2050, the 2018 LNG Export Study supports 
export terms lasting through December 31, 2050.\23\
---------------------------------------------------------------------------

    \19\ Id., 85 FR 7678-7679.
    \20\ DOE published the 2018 LNG Export Study on its website on 
June 7, 2018, and concurrently provided notice of the availability 
of the Study. 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].
    \21\ 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); 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].
    \22\ Proposed Policy Statement, 85 FR 7678; see also id. 85 FR 
7677 (citing 2018 Study Response to Comments, 83 FR 67260-67272).
    \23\ The Proposed Policy Statement provides additional 
background on DOE's practice of issuing non-FTA export 
authorizations and the various studies DOE has commissioned to 
evaluate the reasonably foreseeable economic and environmental 
impacts of natural gas exports, including the 2018 LNG Export Study 
that is the basis for this Final Policy Statement.
---------------------------------------------------------------------------

    DOE also pointed to a new environmental analysis entitled Life 
Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas 
From the United States: 2019 Update (LCA GHG Update). In 2018, DOE's 
National Energy Technology Laboratory (NETL) conducted this study as a 
follow-up to its life cycle analysis (LCA) conducted in 2014. 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 emissions of greenhouse gases (GHGs) associated with exports of 
U.S. LNG. In January 2020, upon review of both the LCA GHG Update and 
the public comments received on that study, DOE determined that it saw 
no reason to conclude that U.S. LNG exports will increase global GHG 
emissions in a material or predictable way. DOE thus 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.'' 
\24\
---------------------------------------------------------------------------

    \24\ 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, 86 (Jan. 2, 
2020), cited in Proposed Policy Statement, 85 FR 7678.
---------------------------------------------------------------------------

    Second, DOE stated that authorization holders have indicated that a 
30-year export term would better match the operational life of LNG 
export facilities, which are typically designed for a service life of 
30 to 50 years. A 30-year export term thus would provide authorization 
holders with greater security in financing their export facility and 
would maximize their ability to enter into natural gas supply and 
export contracts for a longer period of time.
    In particular, DOE observed that a 30-year export term would 
benefit U.S. authorization holders as they compete for long-term export 
contracts in the global market. DOE noted that, in December 2019, the 
Canadian Government granted the first-ever 40-year export term to a 
Canadian LNG export project--the proposed Kitimat LNG project, being 
developed by Chevron Canada Limited. Additionally, citing an earlier 
comment in a proceeding made by Cheniere Energy, Inc. (Cheniere)--the 
first company to have large-scale exports of U.S. LNG to non-FTA 
countries from the lower-48 states, and currently the leading U.S. 
exporter in terms of volume \25\--DOE observed that foreign buyers have 
shown an interest in securing long-term contracts for U.S. LNG that 
last beyond 20 years. Therefore, a 30-year export term could prove 
decisive when foreign buyers are deciding between U.S. LNG and 
alternative long-term sources of LNG, such as the Canadian project.
---------------------------------------------------------------------------

    \25\ Cheniere owns and operates two LNG facilities: The Sabine 
Pass LNG Terminal in Cameron Parish, Louisiana, and the Corpus 
Christi Liquefaction Facility in San Patricio County, Texas.
---------------------------------------------------------------------------

II. Public Comments and DOE's Response

    DOE received 22 comments on the Proposed Policy Statement from a 
variety of sources, including U.S. Senators, participants in the 
natural gas industry, environmental organizations, and individuals. 
Eight comments supported the Proposed Policy Statement,\26\ 13 comments 
opposed the Proposed Policy Statement,\27\ and one comment was non-
responsive.\28\ The Proposed Policy Statement and comments received in 
response are available on DOE's website at https://fossil.energy.gov/app/docketindex/docket/index/22.Several comments express general 
opposition to LNG exports and the use of fossil fuels, advocate for the 
use of renewable energy, argue against an individual non-FTA 
application, or challenge the design of the 2018 LNG Export Study. DOE 
has considered these comments carefully, but considers them outside the 
scope of the Proposed Policy Statement, which addressed whether DOE 
should extend the standard 20-year term for non-FTA authorizations 
through December 31, 2050. DOE previously received public comments on 
the 2018 LNG Export Study, and addressed those comments in the Federal 
Register in December 2018.\29\ The remaining relevant comments are 
summarized below, together with DOE's response to these comments.
---------------------------------------------------------------------------

    \26\ Supporting comments were submitted by Delfin LNG LLC 
(Delfin); Dominion Energy Cove Point LNG, LP (DECP); LNG Allies, The 
U.S. LNG Association (LNG Allies); Golden Pass LNG Terminal LLC 
(Golden Pass LNG); Cheniere; American Petroleum Institute (API); 
U.S. Senators John Barrasso, Bill Cassidy, John Hoeven, and Kevin 
Cramer (filing jointly); and the Center for Liquefied Natural Gas 
and the Natural Gas Supply Association (filing jointly, and 
together, CLNG/NGSA).
    \27\ Opposing comments were submitted by Senators Edward Markey 
and Jeffrey Merkley (filing jointly), Cindy Spoon, Industrial Energy 
Consumers of America (IECA), Public Citizen, Jody McCaffree, A. 
Pani, Morgan Schmitz Anonymous, Sarah-Hope Parmeter, Suzanne Sorkin, 
Corey Capehart, Jean Connochie, and Margaret Gordon.
    \28\ A non-responsive comment was submitted by Lindsey Cox-
McQueen.
    \29\ See 2018 Study Response to Comments, 83 FR 67251.
---------------------------------------------------------------------------

A. Economic Benefits of the Term Extension

a. Comments
    Commenters in support of the Proposed Policy Statement cite the 
2018 LNG Export Study, maintaining that economic benefits for the 
United States will increase with U.S. LNG exports ``since the U.S. 
natural gas industry . . . will remain demand-limited, and not supply-
limited.'' \30\ The commenters also identify the following positive 
commercial benefits that, in their view, will accrue as a result of the 
proposed term extension.
---------------------------------------------------------------------------

    \30\ Comment of LNG Allies at 2; see also Comment of Cheniere at 
1; Comment of API at 2-3.
---------------------------------------------------------------------------

     Planning and financing. Delfin, DECP, API, and CLNG/NGSA 
state that an extended export term through December 31, 2050, will 
better align

[[Page 52241]]

with the expected lifespan of export facilities--which, DECP states, is 
``much longer than 20 years.'' \31\ Commenters including LNG Allies and 
API emphasize that LNG export projects are highly capital intensive and 
require a considerable amount of planning and construction time.\32\ 
They state that, for an export project to be successful, developers 
must be reasonably certain that the LNG project can remain in operation 
long enough to recover those costs and generate a return.\33\ According 
to Delfin and Senators Barrasso, Cassidy, Hoeven, and Cramer, the 
longer export term will provide reassurance that export facilities have 
a reasonable expectation of recouping their investment.\34\ This 
reassurance, in turn, will facilitate the financing of such projects, 
as well as enable project development teams to move forward with 
greater confidence when making critical investment decisions.\35\
---------------------------------------------------------------------------

    \31\ Comment of DECP at 2; see also Comment of Delfin; Comment 
of API at 1; Comment of CLNG/NGSA at 4.
    \32\ Comment of LNG Allies at 2; Comment of API at 2.
    \33\ Comment of API at 2; see also Comment of CLNG/NGSA at 4.
    \34\ Comment of Delfin; Comment of Senators Barrasso, Cassidy, 
Hoeven, and Cramer at 1.
    \35\ Comment of Delfin.
---------------------------------------------------------------------------

     Market competitiveness. API and other commenters assert 
that the proposed term extension will afford U.S. authorization holders 
more flexibility in responding to LNG buyers, and thus will level the 
playing field in competing with other global suppliers.\36\ LNG Allies 
states that DOE's current non-FTA practice--authorizing exports for a 
20-year term--constrains the flexibility that U.S. companies can offer 
in contract negotiations. Specifically, LNG Allies and API assert that 
the inability of U.S. exporters to offer export terms longer than 20 
years is a major disadvantage in an increasingly competitive, dynamic 
global LNG market with new projects planned in Qatar, Russia, 
Mozambique, and elsewhere. According to LNG Allies, export facilities 
require most U.S. project sponsors to raise financing of up to $10 
billion or more to construct their terminals, underwritten by long-term 
LNG offtake contracts. A longer export term thus would allow U.S. 
companies to offer contract arrangements that have a greater certainty 
of supply and that are more attractive to potential customers.\37\ LNG 
Allies points to the proposed Kitimat LNG export facility to be 
constructed in British Columbia, Canada, which it states has a 40-year 
export license and will be a direct competitor to U.S. projects seeking 
to serve importing countries in Asia.\38\ API also notes that other 
exporting countries, such as Russia, place few limitations on a 
project's operational timeline.\39\ In sum, these commenters argue that 
the proposed term extension will better reflect domestic and 
international market dynamics.\40\
---------------------------------------------------------------------------

    \36\ Comment of API at 2.
    \37\ Comment of LNG Allies at 2-3; Comment of Delfin.
    \38\ Comment of LNG Allies at 3.
    \39\ Comment of API at 2.
    \40\ See id. at 5; see also Comment of CLNG/NGSA at 1, 4.
---------------------------------------------------------------------------

     Regulatory certainty in the United States and abroad. 
CLNG/NGSA and Senators Barrasso, Cassidy, Hoeven, and Cramer state that 
the proposed term extension provides a more certain pathway for U.S. 
natural gas to be sold abroad, sends a clear statement of confidence in 
U.S. LNG, and provides greater regulatory certainty to the 
industry.\41\
---------------------------------------------------------------------------

    \41\ Comment of CLNG/NGSA at 5; Comment of Senators Barrasso, 
Cassidy, Hoeven, and Cramer at 1.
---------------------------------------------------------------------------

    On the other hand, opponents of the Proposed Policy Statement 
challenge the anticipated economic and commercial benefits associated 
with an extended export term. IECA, for example, contends that DOE 
should not extend export terms to 2050 or approve any additional LNG 
export applications until DOE conducts economic studies that, in IECA's 
view, fully evaluate the economic impacts of exporting U.S. LNG.\42\ 
Additionally, Public Citizen asserts that the trend of LNG exports is 
shifting away from long-term, fixed price contracts and towards spot 
and short-term sales.\43\ According to Public Citizen, this shift 
increases the likelihood that LNG export destinations will be 
determined by the markets offering the highest prices, and thus is at 
odds with DOE's proposal to ``lock in'' 30-year export volumes.\44\
---------------------------------------------------------------------------

    \42\ Comment of IECA at 2.
    \43\ Comment of Public Citizen.
    \44\ Id.
---------------------------------------------------------------------------

b. DOE Response
    DOE agrees with the commenters stating that this Final Policy 
Statement will provide important commercial benefits to existing and 
future authorization holders in the lower-48 states, while enhancing 
long-term regulatory certainty for both authorization holders and 
foreign buyers of U.S. LNG. More generally, DOE notes that the 2018 LNG 
Export Study, as well as DOE's four prior LNG export studies, 
consistently have projected positive economic benefits from increased 
levels of U.S. LNG exports, as measured by GDP.\45\
---------------------------------------------------------------------------

    \45\ See, e.g., 2018 Study Response to Comments, 83 FR 67259 
(citing 2018 LNG Export Study), 67263.
---------------------------------------------------------------------------

    Although Public Citizen notes certain commercial trends in the U.S. 
LNG market--such as the use of flexible short-term sales, in addition 
to long-term contracts--Public Citizen does not explain how these 
market variations are any more or less significant whether existing 
authorization holders have a 20-year export term or an extended export 
term lasting through 2050.\46\
---------------------------------------------------------------------------

    \46\ Additionally, DOE continues to be guided by the 
longstanding principles established in the 1984 Policy Guidelines of 
minimizing federal involvement in energy markets and promoting 
market competition. See Jordan Cove Energy Project L.P., DOE/FE 
Order No. 3413-A, at 28-30 (citing, e.g., U.S. Dep't of Energy, New 
Policy Guidelines and Delegations Order Relating to Regulation of 
Imported Natural Gas, 49 FR 6684, 6685 (Feb. 22, 1984)).
---------------------------------------------------------------------------

    Insofar as IECA argues that the 2018 LNG Export Study used 
propriety economic models and failed to evaluate certain economic 
impacts, and thus cannot provide support for the Proposed Policy 
Statement, DOE finds that these issues are beyond the scope of this 
proceeding. DOE previously addressed IECA's (and other commenters') 
arguments concerning the scope, design, and methodology of the 2018 LNG 
Export Study. In that proceeding, DOE determined that none of the 
comments opposing the 2018 LNG Export Study--including IECA's 
arguments--provided sufficient evidence to rebut the findings of the 
2018 Study.\47\
---------------------------------------------------------------------------

    \47\ 2018 Study Response to Comments, 83 FR 67260-67273.
---------------------------------------------------------------------------

B. Distributional Impacts

1. Gross Domestic Product (GDP) and Consumer Welfare
a. Comments
    Some commenters, including IECA, Public Citizen, and Senators 
Markey and Merkley, suggest that any net economic benefits associated 
with the proposed term extension are overstated and not sustainable. 
Senators Markey and Merkley contend, for example, that the Proposed 
Policy Statement will result in higher profits for the natural gas 
industry, while ``cutting American consumers out of any potential 
benefits.'' \48\ Likewise, IECA and Public Citizen argue that the 
Proposed Policy Statement prioritizes the supply of natural gas to 
foreign countries and the financial interests of natural gas producers 
and LNG exporters at the

[[Page 52242]]

expense of domestic consumers and households.\49\
---------------------------------------------------------------------------

    \48\ Comment of Senators Markey and Merkley.
    \49\ Comment of IECA at 2; Comment of Public Citizen.
---------------------------------------------------------------------------

    Public Citizen and Morgan Schmitz also contend that extending 
export terms for LNG would link U.S. GDP to price-volatile, finite 
natural resources that will become increasingly more difficult to 
obtain.\50\ Ms. Schmitz argues that the fossil fuel industry causes 
negative economic effects, and the United States would experience more 
economic gain over the long term by expanding renewable energy sources 
and investing in jobs in ``green energy.'' \51\
---------------------------------------------------------------------------

    \50\ Comment of Public Citizen; see also Comment of Morgan 
Schmitz at 3.
    \51\ Comment of Morgan Schmitz at 3-4.
---------------------------------------------------------------------------

    Other commenters, including LNG Allies, Cheniere, and API, seek to 
rebut these concerns by pointing to the conclusion of the 2018 LNG 
Export Study that the United States will experience net economic 
benefits from the export of domestically produced LNG (in a volume up 
to 52.8 Bcf/d of natural gas) through the year 2050.\52\ Cheniere also 
emphasizes the Study's conclusion that ``there is greater gain in GDP 
as the LNG export volume increases.'' \53\
---------------------------------------------------------------------------

    \52\ Comment of LNG Allies 2-3; Comment of Cheniere at 1; 
Comment of API at 2-3.
    \53\ Comment of Cheniere at 1 (quoting 2018 LNG Export Study at 
67-68).
---------------------------------------------------------------------------

    Additionally, Senators Barrasso, Cassidy, Hoeven, and Cramer 
maintain that LNG exports will help the U.S. natural gas industry 
continue to be an engine for growth--creating thousands of jobs in the 
United States and generating millions in tax revenue for federal, 
state, and local governments.\54\ API adds that the 2018 LNG Export 
Study's conclusion was consistent with an API study published in 2017, 
which found that an increase in LNG export volumes to approximately 16 
Bcf/d in 2040 could support between 220,000 to 452,000 additional jobs 
and add $50 to $73 billion to the U.S. economy.\55\
---------------------------------------------------------------------------

    \54\ Comment of Senators Barrasso, Cassidy, Hoeven, and Cramer 
at 1.
    \55\ Comment of API at 2.
---------------------------------------------------------------------------

b. DOE Response
    The 2018 LNG Export Study measured the broad macroeconomic effects 
of LNG exports on the U.S. economy through several metrics, including 
the wellbeing of the average U.S. consumer, total household income from 
all sources, economy-wide investment, output effects on key 
manufacturing sectors, and GDP.
    With respect to GDP, the 2018 LNG Export Study showed that, for 
each of the supply scenarios, higher levels of LNG exports in response 
to international demand consistently lead to higher levels of GDP.\56\ 
Specifically, GDP grows as LNG exports increase because the U.S. 
economy benefits from investment in liquefaction facilities, export 
revenues, income from the upstream and midstream natural gas industry, 
and tolling charges generated by the LNG export facilities. With 
respect to consumer well-being, the 2018 LNG Export Study found that 
all scenarios within the ``more likely'' range of results are welfare-
improving for the average U.S. household.\57\
---------------------------------------------------------------------------

    \56\ See 2018 Study Response to Comments, 83 FR 67255 (citing 
2018 LNG Export Study at 18).
    \57\ See id., 83 FR 67264 (citing 2018 LNG Export Study at 66-
67). For a detailed discussion of these distributional impacts in 
the context of the 2018 LNG Export Study, see id., 83 FR 67264 
(GDP), 67265-67266 (consumer welfare).
---------------------------------------------------------------------------

    Upon review, DOE is not persuaded by the commenters' claims of 
negative economic impacts from the proposed term extension. The 
commenters have not presented sufficient evidence to support their 
assertions of economic harm and, indeed, do little more than 
acknowledge the 2018 LNG Export Study without rebutting its analysis. 
Consistent with the conclusions of the 2018 LNG Export Study, DOE finds 
that exports of U.S. LNG under the proposed term extension will 
generate positive economic benefits in the United States through the 
year 2050.
2. Sectoral Impacts
a. Comments
    IECA and Public Citizen contend that LNG exports will impact the 
domestic energy-intensive, trade exposed (EITE) sectors 
disproportionately. Specifically, IECA states that, if natural gas 
prices rise due to LNG exports over an extended export term, U.S. 
manufacturers will lose their current competitive advantage of 
relatively low natural gas prices. IECA asserts that DOE's 
implementation of this Final Policy Statement thus ``could jeopardize 
nearly 13 million manufacturing jobs and trillions of dollars in 
assets.'' \58\
---------------------------------------------------------------------------

    \58\ Comment of IECA at 2; see also Comment of Public Citizen.
---------------------------------------------------------------------------

    In contrast, LNG Allies asserts that IECA has failed to cite 
evidence supporting its claim that manufacturers have been adversely 
affected over the past four years as U.S. LNG exports have 
increased.\59\ LNG Allies states that IECA cannot point to any 
manufacturing facility in the United States that has been forced to cut 
back its operations due to an inability to secure an adequate or 
affordable supply of natural gas.\60\
---------------------------------------------------------------------------

    \59\ Comment of LNG Allies (Response of LNG Allies to IECA) at 
1.
    \60\ Id.
---------------------------------------------------------------------------

b. DOE Response
    In response to IECA's claim that increases in LNG exports will 
threaten the competitiveness of the U.S. manufacturing base by driving 
up natural gas prices, DOE notes that the 2018 LNG Export Study and 
U.S. Energy Information Administration's (EIA) Annual Energy Outlook 
2020 (AEO 2020) \61\ project robust domestic supply conditions that are 
more than adequate to satisfy both domestic needs and exports of LNG 
under the proposed term extension--i.e., through December 31, 2050.\62\
---------------------------------------------------------------------------

    \61\ U.S. Energy Info. Admin., Annual Energy Outlook 2020 (with 
projections to 2050) (Jan. 29, 2020), available at: https://www.eia.gov/outlooks/aeo/pdf/aeo2020.pdf.
    \62\ See, e.g., 2018 Study Response to Comments, 83 FR 67262.
---------------------------------------------------------------------------

    Further, the 2018 LNG Export Study consistently shows macroeconomic 
benefits to the U.S. economy in every scenario, as well as positive 
annual growth across the energy intensive sectors of the economy.\63\ 
Specifically, the 2018 Study found that, ``[a]ll negatively affected 
sectors, and in particular the natural gas intensive sectors, continue 
to grow robustly at higher levels of LNG exports, albeit at slightly 
lower rates of increase than they would at lower levels.'' \64\ Based 
on these and other findings in the 2018 LNG Export Study, DOE does not 
find it credible that approval of the Proposed Policy Statement would 
put trillions of dollars of U.S. manufacturing assets and millions of 
jobs at risk, as IECA claims.\65\
---------------------------------------------------------------------------

    \63\ See id. 83 FR 67268-67269 (citing 2018 LNG Export Study at 
67, 70).
    \64\ See id. 83 FR 67265 (quoting 2018 LNG Export Study at 70).
    \65\ For a detailed discussion of sectoral impacts in the 
context of the 2018 LNG Export Study, see id. 83 FR 67265-67266.
---------------------------------------------------------------------------

C. Market-Based Export Levels and Price Impacts

a. Comments
    Some commenters, such as IECA, Public Citizen, and Senators Markey 
and Merkley, warn of large increases in domestic prices of natural gas 
if the term extension is implemented. They contend that increases in 
LNG exports through 2050 will increase demand for natural gas--thus 
driving up prices in the United States and adversely affecting electric 
and natural gas utility customers (including residential customers) and 
manufacturing-based energy-intensive industries.\66\
---------------------------------------------------------------------------

    \66\ See, e.g., Comment of Public Citizen.

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

[[Page 52243]]

    According to Senators Markey and Merkley, EIA has concluded that 
increased LNG exports result in increased domestic consumer 
expenditures and higher natural gas prices.\67\ Senators Markey and 
Merkley, along with Public Citizen, further contend that extending non-
FTA export terms will harm American consumers by giving companies 
``free rein'' to export natural gas overseas for a higher profit, which 
drives up domestic household costs.\68\ Public Citizen argues that, in 
Australia, domestic natural gas prices skyrocketed in response to 
``unfettered LNG exports,'' which caused Australian manufacturers to 
close their doors as they became unable to compete globally.\69\
---------------------------------------------------------------------------

    \67\ Comment of Senators Markey and Merkley.
    \68\ See id.; see also Comment of Public Citizen.
    \69\ Comment of Public Citizen; see also Comment of IECA at 2.
---------------------------------------------------------------------------

    Other commenters dispute that the proposed term extension will 
increase the price of domestic natural gas. LNG Allies states that, due 
to the large size of the U.S. resource base (among other factors), EIA 
forecasts U.S. natural gas prices to remain low at increasing levels of 
production through at least 2050.\70\ LNG Allies states that EIA has 
revised its estimate of U.S. natural gas prices downward--despite 
increasing exports--for each year in recent years. LNG Allies thus 
asserts that the proposed term extension will not have a negative 
impact on the availability or price of U.S. natural gas in the domestic 
market.\71\ Citing DOE's 2018 LNG Export Study and a study conducted by 
API in 2017, API likewise contends that increased exports of LNG are 
estimated to have a minimal effect on the domestic price of natural 
gas.\72\
---------------------------------------------------------------------------

    \70\ Comment of LNG Allies at 3.
    \71\ Id.; see also Comment of LNG Allies (Response of LNG Allies 
to IECA) at 2.
    \72\ Comment of API at 2.
---------------------------------------------------------------------------

    Finally, LNG Allies disputes IECA's claim that increases in U.S. 
LNG exports will increase price volatility.\73\ LNG Allies contends 
that, in fact, natural gas price volatility has declined since the 
first cargo of U.S. LNG was shipped in 2016.\74\
---------------------------------------------------------------------------

    \73\ See Comment of LNG Allies (Response of LNG Allies to IECA) 
at 1.
    \74\ Id.
---------------------------------------------------------------------------

b. DOE Response
    As a preliminary matter, DOE emphasizes that DOE's approval of non-
FTA applications to date--and its proposal in this proceeding--does not 
amount to the ``rubber stamping'' of unlimited exports of natural 
gas.\75\ In the context of individual non-FTA proceedings, DOE has 
performed its statutory obligation under NGA section 3(a), which 
creates a rebuttable presumption that a proposed export of natural gas 
is in the public interest.\76\ In evaluating the public interest, DOE 
takes seriously the potential economic impacts of higher natural gas 
prices. In addition to commissioning five economic studies since 2011 
to examine these issues (most recently, the 2018 LNG Export Study), DOE 
has taken into account factors that could mitigate price impacts, such 
as the current oversupply situation and data indicating that the 
natural gas industry would increase natural gas supply in response to 
increasing demand from the export markets.\77\
---------------------------------------------------------------------------

    \75\ See, e.g., Comment of Senators Markey and Merkley.
    \76\ See supra Sec.  I.
    \77\ See, e.g., U.S. Energy Info. Admin., Short-Term Energy 
Outlook (July 7, 2020), available at: https://www.eia.gov/outlooks/steo/report/natgas.php (natural gas forecasts).
---------------------------------------------------------------------------

    Further, it is far from certain that all or even most of the 
proposed LNG export projects will ever be realized because of the time, 
complexity, and expense of commercializing, financing, and constructing 
LNG export terminals, as well as the uncertainties inherent in the 
global market demand for LNG. The 2018 Study found that exports of LNG 
from the lower-48 states, in volumes up to and including 52.8 Bcf/d of 
natural gas, will bring net economic benefits to the United States.\78\ 
These scenarios exceed the current amount of LNG exports authorized in 
the final non-FTA export authorizations to date (45.89 Bcf/d of natural 
gas). Additionally, the volume of LNG export capacity that is currently 
operating or under construction in the United States totals 15.54 Bcf/d 
of natural gas in the lower-48 states.\79\ The LNG export capacity 
actively operating or undergoing commissioning in the United States is 
lower still--currently 10.24 Bcf/d of natural gas.\80\
---------------------------------------------------------------------------

    \78\ 2018 Study Response to Comments, 83 FR 67272.
    \79\ See supra note 15.
    \80\ See U.S. Energy Info. Admin., U.S. Liquefaction Capacity 
(Apr. 22, 2020), available at: https://www.eia.gov/naturalgas/U.S.liquefactioncapacity.xlsx (calculated by adding the volumes in 
Column N in the ``Existing & Under Construction'' worksheet that are 
cross-listed in Column G as ``commercial operation'' or 
``commissioning'').
---------------------------------------------------------------------------

    Most recently, in EIA's Short-Term Energy Outlook issued on July 7, 
2020, EIA observed that ``[h]istorically low natural gas and LNG spot 
prices in Europe and Asia have reduced the economic viability of U.S. 
LNG exports, which are highly price sensitive.'' \81\ Thus far in the 
summer of 2020, more than 100 LNG export cargoes under long-term 
contract from authorized LNG exporters in the United States have been 
cancelled. EIA estimates that, as a result of these cancellations, U.S. 
LNG exports averaged 3.6 Bcf/d of natural gas in June 2020. EIA 
forecasts that U.S. LNG exports will average 2.2 Bcf/d in July and 
August 2020, implying a 25% utilization of U.S. LNG export 
capacity.\82\ EIA projects that, as global natural gas demand gradually 
recovers, U.S. LNG exports may average 7.1 Bcf/d from December 2020 to 
February 2021.\83\ Each of these export levels is below the capacity 
actively operating or undergoing commissioning in the United States 
referenced above (10.24 Bcf/d).
---------------------------------------------------------------------------

    \81\ U.S. Energy Info. Admin., Short-Term Energy Outlook (July 
7, 2020), available at: https://www.eia.gov/outlooks/steo/report/natgas.php (natural gas forecasts).
    \82\ See id.
    \83\ See id.
---------------------------------------------------------------------------

    Additionally, DOE takes administrative notice of EIA's recent 
authoritative projections for natural gas supply, demand, and prices, 
set forth in the Annual Energy Outlook 2020 (AEO 2020), issued on 
January 29, 2020.\84\ DOE has analyzed AEO 2020 to evaluate any 
differences from Annual Energy Outlook 2017 (AEO 2017),\85\ which 
formed the basis for the 2018 LNG Export Study.\86\ Comparing key 
results from 2050 (the end of the projection period in the Reference 
case without the Clean Power Plan (CPP) from AEO 2017) shows that the 
Reference case outlook in AEO 2020 projects lower-48 market conditions 
that would be even more supportive of LNG exports than in AEO 2017, 
including higher production and demand coupled with lower prices. For 
example, for the year 2050, the AEO 2020 Reference case anticipates 
over 13% more natural gas production in the

[[Page 52244]]

lower-48 states than the AEO 2017 Reference case without the CPP.\87\
---------------------------------------------------------------------------

    \84\ U.S. Energy Info. Admin., Annual Energy Outlook 2020 (with 
projections to 2050) (Jan. 29, 2020), available at: https://www.eia.gov/outlooks/aeo/pdf/aeo2020.pdf.
    \85\ 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.
    \86\ AEO 2017 included two versions of the Reference case--one 
with, and one without, the implementation of the Clean Power Plan. 
In recent non-FTA orders, DOE discussed both versions of the AEO 
2017 Reference case, noting that the U.S. Environmental Protection 
Agency (EPA) was reviewing the CPP and considering an alternative 
regulatory approach. On June 19, 2019, EPA repealed the CPP and 
issued the final Affordable Clean Energy (ACE) rule. See U.S. Envtl. 
Prot. Agency, Repeal of the Clean Power Plan; Emission Guidelines 
for Greenhouse Gas Emissions From Existing Electric Utility 
Generating Units; Revisions to Emission Guidelines Implementing 
Regulations, 84 FR 32520 (July 8, 2019). Accordingly, in this Final 
Policy Statement, DOE refers only to the AEO 2017 Reference case 
without the CPP. The AEO 2020 Reference case does not include the 
CPP, so the comparisons between AEO 2017 and AEO 2020 are consistent 
in that regard.
    \87\ See, e.g., Jordan Cove Energy Project L.P., DOE/FE Order 
No. 3413-A, at 104-05 & Table 1 (row entitled ``Lower-48 Dry Natural 
Gas Production'').
---------------------------------------------------------------------------

    Turning to the commenters' concerns about increases in natural gas 
prices, the 2018 LNG Export Study 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.'' \88\ The 2018 LNG Export Study also found that, 
because available natural gas resources have the largest impact on 
natural gas prices, ``U.S. natural gas prices are far more dependent on 
available resources and technologies to extract available resources 
than on U.S. policies surrounding LNG exports.'' \89\
---------------------------------------------------------------------------

    \88\ See 2018 Study Response to Comments, 83 FR 67258 (quoting 
2018 LNG Export Study at 55) (emphasis added).
    \89\ Id., 83 FR 67268 (quoting 2018 LNG Export Study at 55).
---------------------------------------------------------------------------

    In analyzing AEO 2020 to evaluate any differences from AEO 2017 
(the basis for the 2018 LNG Export Study), DOE notes that, for the year 
2050, AEO 2020 projects an average Henry Hub natural gas price that is 
lower than the AEO 2017 Reference case without the CPP by over 38%.\90\ 
Further, in the period since authorization holders began exporting U.S. 
LNG from the lower-48 states in 2016, wholesale prices of U.S. natural 
gas at Henry Hub have remained low.\91\ This is a function of the size 
of domestic natural gas supply to meet both domestic and export demand.
---------------------------------------------------------------------------

    \90\ See, e.g., Jordan Cove Energy Project L.P., DOE/FE Order 
No. 3413-A, at 104-05 & Table 1 (row entitled ``Henry Hub Spot 
Price'').
    \91\ See U.S. Energy Info. Admin., Today in Energy, ``U.S. Henry 
Hub natural gas spot prices reached record lows in the first half of 
2020'' (July 13, 2020), available at: https://www.eia.gov/todayinenergy/detail.php?id=44337 (graph entitled ``Monthly Henry 
Hub natural gas spot prices (Jan. 2016-Dec. 2020)'').
---------------------------------------------------------------------------

    Finally, the 2018 LNG Export Study consistently showed 
macroeconomic benefits to the U.S. economy in every scenario at the 
projected Henry Hub natural gas prices, as well as positive annual 
growth across the energy-intensive sectors.\92\ The commenters opposing 
the Proposed Policy Statement did not offer studies or other evidence 
to rebut these findings. For these reasons, and as explained in DOE/
FE's Response to Comments on the 2018 Study, the commenters' arguments 
concerning domestic price increases are not supported by the record 
evidence.\93\
---------------------------------------------------------------------------

    \92\ 2018 Study Response to Comments, 83 FR 67268-67269 (citing 
2018 LNG Export Study at 67, 70).
    \93\ Id.
---------------------------------------------------------------------------

D. International Trade and Geopolitical Impacts

a. Comments
    API states that increasing the availability of U.S. natural gas 
over longer export terms will benefit both the United States and its 
trading partners. According to API, increasing the use of U.S.-sourced 
natural gas enhances national security in both the United States and 
abroad by providing a reliable alternative to U.S. allies around the 
world, who otherwise would rely more heavily on foreign energy 
supplies.\94\ Senators Barrasso, Cassidy, Hoeven, and Cramer add that 
the Proposed Policy Statement ``sends a strong signal to our allies and 
trading partners'' on U.S. global energy leadership--in particular, as 
a leader in clean energy and as a committed natural gas trading 
partner.\95\
---------------------------------------------------------------------------

    \94\ Comment of API at 5.
    \95\ Comment of Senators Barrasso, Cassidy, Hoeven, and Cramer 
at 1; see also Comment of CLNG/NGSA at 5.
---------------------------------------------------------------------------

    On the other hand, Public Citizen argues that the ability of LNG 
exports to increase American influence for geopolitical reasons--such 
as reducing the dependency of European countries on the Russian natural 
gas supply--is limited.\96\ Public Citizen critiques what it calls 
``commodity diplomacy,'' stating that the destination of U.S. LNG is 
market-driven, not determined by the U.S. Government.\97\
---------------------------------------------------------------------------

    \96\ Comment of Public Citizen.
    \97\ Id.
---------------------------------------------------------------------------

b. DOE Response
    DOE's long-standing review of non-FTA applications under NGA 
section 3(a) includes consideration of the international consequences 
of DOE's decisions.\98\ An efficient, transparent international market 
for natural gas with diverse sources of supply provides both economic 
and strategic benefits to the United States and its allies. After four 
years exporting at market-based levels, the United States has become 
one of the top three global LNG exporters. Cheniere points out, for 
example, that its two LNG facilities--Sabine Pass and Corpus Christi--
have produced, loaded, and exported more than 1,000 LNG cargoes since 
2016.\99\
---------------------------------------------------------------------------

    \98\ See, e.g., Jordan Cove Energy Project L.P., DOE/FE Order 
No. 3413-A, at 28, 105-06.
    \99\ Comment of Cheniere at 1.
---------------------------------------------------------------------------

    Public Citizen points out that the destination of U.S. LNG cargoes 
around the world is driven by market demand. However, DOE notes that to 
the extent U.S. exports can diversify global LNG supplies and increase 
the volumes of LNG available globally, these exports will improve 
energy security for many U.S. allies and trading partners. Indeed, the 
reach of U.S. LNG exports has been expansive, with cargoes already 
delivered to the majority of importing countries.\100\ Further, 
shipments of LNG that would have been destined to U.S. markets have 
been redirected to Europe and Asia, improving energy security for many 
of our key trading partners. Therefore, by providing a mechanism for 
authorization holders to increase the total volume of LNG exports over 
the life of their authorization, this Final Policy Statement will 
advance the public interest.
---------------------------------------------------------------------------

    \100\ Since February 2016, U.S. LNG has been delivered by region 
as follows: Europe and Central Asia (31.5%), East Asia and Pacific 
(35.2%), Latin America and the Caribbean (22.4%), Middle East and 
North Africa (4.9%), and South Asia (6.1%). See U.S. Dep't of 
Energy, Office of Fossil Energy, LNG Monthly, at 1, Table 1a (July 
2020), available at: https://www.energy.gov/sites/prod/files/2020/07/f76/LNG%20Monthly%202020_2.pdf (Table of Exports of Domestically 
Produced LNG Delivered by Region, Cumulative from February 2016 
through May 2020).
---------------------------------------------------------------------------

E. Environmental Issues

a. Comments
    Some commenters argue that the Proposed Policy Statement is 
inconsistent with the public interest on environmental grounds. They 
assert that extending the standard 20-year term for export 
authorizations through 2050 will lead to the increased production and 
transportation of natural gas (in the form of LNG)--which, in turn, 
will result in negative environmental and public health impacts.\101\
---------------------------------------------------------------------------

    \101\ See, e.g., Comment of Senators Markey and Merkley; Comment 
of Cindy Spoon; Comment of Morgan Schmitz at 2; Comment of Public 
Citizen (Attachment at 10-11).
---------------------------------------------------------------------------

    Specifically, these commenters express concerns regarding hydraulic 
fracturing (or fracking).\102\ Public Citizen states, for example, that 
increasing LNG exports directly correlates to increases in domestic gas 
production, mostly through the fracking of shale gas.\103\ The 
commenters also argue that increased exports of natural gas under the 
Proposed Policy Statement will result in increased emissions of GHGs, 
which they contend will accelerate climate change both in the United 
States and in the importing countries.\104\
---------------------------------------------------------------------------

    \102\ See, e.g., Comment of Sarah-Hope Parmeter; Comment of 
Suzanne Sorkin; Comment of Public Citizen; Comment of Morgan Schmitz 
at 2-3; Comment of Margaret Gordon.
    \103\ Comment of Public Citizen (Attachment at 10); see also 
Comment of Cindy Spoon.
    \104\ See, e.g., Comment of Senators Markey and Merkley; Comment 
of Public Citizen.
---------------------------------------------------------------------------

    According to these commenters, the proposed term extension will 
prolong the use of fossil fuels, making it harder

[[Page 52245]]

for the United States and other countries to transition from fossil 
fuels to clean, renewable sources of energy.\105\ They argue that DOE 
should be focused on encouraging renewable sources of energy on a 
global scale, rather than facilitating exports of natural gas over a 
longer time period.\106\
---------------------------------------------------------------------------

    \105\ See id.
    \106\ See, e.g., Comment of Senators Markey and Merkley; Comment 
of Jean Connochie; Comment of Morgan Schmitz; Comment of Sarah-Hope 
Parmeter; Comment of Suzanne Sorkin; Comment of Corey Capehart.
---------------------------------------------------------------------------

    Two commenters add that LNG facilities have negative impacts on 
local communities. Cindy Spoon asserts that communities living near 
proposed LNG export facilities in Texas have made it clear they do not 
want to live close to these facilities.\107\ Jody McCaffree describes 
the threat of eminent domain to landowners who live near the site of 
the proposed Jordan Cove LNG Terminal and associated pipeline in 
Oregon.\108\
---------------------------------------------------------------------------

    \107\ Comment of Cindy Spoon at 1.
    \108\ Comment of Jody McCaffree at 1, 7.
---------------------------------------------------------------------------

    In contrast, DECP and Senators Barrasso, Cassidy, Hoeven, and 
Cramer maintain that exports of U.S. LNG are important to providing 
clean, safe, and affordable energy to U.S. trading partners around the 
world.\109\ LNG Allies, API, and CLNG/NGSA likewise assert that the 
proposed term extension will help to reduce global GHG emissions by 
reducing the use of coal for electric power and industrial uses.\110\ 
In support of this argument, the commenters point to DOE's life cycle 
analyses of greenhouse gases--the first conducted in 2014 (the LCA GHG 
Report) and the second conducted in 2019 (the LCA GHG Update).\111\ API 
states that the LCA GHG Update is an extensive ``cradle-to-grave'' 
assessment of GHG emissions associated with LNG exports over 20- and 
100-year global warming potential time horizons.\112\ In API's view, 
the LCA GHG Update not only supports the Proposed Policy Statement, but 
likely would satisfy the requirement of any NEPA review associated with 
the proposed term extension.\113\ LNG Allies further states that the 
findings of DOE's LCA GHG studies have been confirmed by other peer-
reviewed LNG life-cycle analyses conducted by academic research 
teams.\114\
---------------------------------------------------------------------------

    \109\ Comment of Senators Barrasso, Cassidy, Hoeven, and Cramer 
at 1; Comment of DECP at 3.
    \110\ Comment of LNG Allies at 1; see also Comment of Senators 
Barrasso, Cassidy, Hoeven, and Cramer at 1; Comment of API at 4-5; 
Comment of CLNG/NGSA at 3.
    \111\ See supra Sec.  I.
    \112\ Comment of API at 4; see also id. at 5.
    \113\ See id.
    \114\ Comment of LNG Allies at 1.
---------------------------------------------------------------------------

    CLNG/NGSA also points out that, while the greater use of natural 
gas will help to reduce carbon emissions, it also will help to reduce 
traditional pollutants, such as emissions of sulfur dioxide, nitrogen 
oxides, and particulate matter.\115\
---------------------------------------------------------------------------

    \115\ Comment of CLNG/NGSA at 3.
---------------------------------------------------------------------------

    Addressing renewable energy, CLNG/NGSA argues that when countries 
increase their use of natural gas for power generation, they not only 
reduce their GHG emissions through fuel switching (from coal to less 
carbon-intensive natural gas), but they also have the opportunity to 
increase their use of renewable energy. According to CLNG/NGSA, natural 
gas is a ``perfect ally'' to ramp up and support renewable resources, 
allowing for more generation to be powered by renewables.\116\
---------------------------------------------------------------------------

    \116\ Comment of CLNG/NGSA at 3-4.
---------------------------------------------------------------------------

b. DOE Response
    Upon review, the commenters' environmental concerns associated with 
natural gas production do not establish that a term extension under the 
Final Policy Statement is inconsistent with the public interest. DOE 
notes that, in 2017, the U.S. Court of Appeals for the District of 
Columbia Circuit (D.C. Circuit) rejected similar arguments challenging 
non-FTA authorizations issued by DOE on this basis.\117\ The Court's 
conclusions and reasoning in Sierra Club I and II guide DOE's review of 
comments regarding environmental concerns in this proceeding.\118\
---------------------------------------------------------------------------

    \117\ Sierra Club v. U.S. Dep't of Energy, 867 F.3d 189 (D.C. 
Cir. 2017) [hereinafter Sierra Club I] (denying petition for review 
of the LNG export authorization issued to Freeport LNG Expansion, 
L.P., et al.); Sierra Club v. U.S. Dep't of Energy, 703 Fed. App'x 1 
(D.C. Cir. Nov. 1, 2017) [hereinafter Sierra Club II] (denying 
petitions for review in Nos. 16-1186, 16-1252, and 16-1253 of the 
LNG export authorizations issued to Dominion Cove Point LNG, LP, 
Sabine Pass Liquefaction, LLC, and Cheniere Marketing, LLC, et al., 
respectively).
    \118\ See also Proposed Policy Statement, 85 FR 7676-7677.
---------------------------------------------------------------------------

    Turning to the issue of GHG emissions and climate impacts raised by 
several commenters, DOE notes that the recent LCA GHG Update 
demonstrated that the conclusions of DOE's original 2014 LCA GHG Report 
remained the same. 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.\119\ 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.\120\ The LCA GHG Update thus 
concluded that the use of U.S. LNG exports for power production in 
European and Asian markets will not increase global GHG emissions from 
a life cycle perspective, when compared to regional coal extraction and 
consumption for power production.\121\ On this basis, DOE found that 
the 2019 Update ``supports the proposition that exports of LNG from the 
lower-48 states will not be inconsistent with the public interest.'' 
\122\
---------------------------------------------------------------------------

    \119\ 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, 85 (Jan. 2, 
2020) [hereinafter DOE Response to Comments on 2019 Update].
    \120\ Id.
    \121\ Id. at 85 FR 78, 85.
    \122\ Id. at 85 FR 86. DOE notes that, in Sierra Club I, the 
D.C. Circuit rejected a challenge to the 2014 LCA GHG Report. The 
Court's decision in Sierra Club I guided DOE's development of the 
2019 LCA GHG Update.
---------------------------------------------------------------------------

    In the Proposed Policy Statement, DOE discussed the LCA GHG Update 
and noted that it was a recent regulatory development supporting the 
proposed term extension.\123\ No commenters in this proceeding disputed 
the findings of the LCA GHG Update or DOE's reliance on it to support 
the proposed term extension.
---------------------------------------------------------------------------

    \123\ Proposed Policy Statement, 85 FR 7677-7678.
---------------------------------------------------------------------------

    In response to commenters who assert that exports of U.S. natural 
gas provide clean, safe, and affordable energy to countries around the 
world, DOE notes that foreign demand for U.S. natural gas has increased 
as countries in the Caribbean, Central America, and South America seek 
to import cleaner sources of energy. DOE further observes that many of 
these countries are currently dependent on diesel and/or fuel oil for 
their generation needs. These energy needs are challenging from both a 
cost- and emissions-perspective. By importing LNG from the United 
States, these countries will have access to a more reliable, cost-
effective supply of energy that also has emissions benefits over 
current energy sources. At the same time, the United States will 
facilitate stronger relationships with these importing countries, while 
promoting U.S. leadership in the global energy market.
    DOE also recognizes that numerous commenters are advocating for the 
development and use of renewable energy on a global scale, rather than 
for DOE to facilitate exports of natural gas

[[Page 52246]]

over an extended time period.\124\ However, imports of U.S. LNG can 
work in concert with the development of renewable generation both in 
the United States and in importing countries. Imported natural gas can 
provide reliable standby energy supply immediately, while renewable 
development is occurring.\125\ Imported LNG also can provide continued 
reliability to enhance solar or other renewable sources once they are 
developed. For these reasons, authorization holders who qualify for the 
proposed term extension may provide indirect benefits to the use of 
renewable energy in importing countries.\126\
---------------------------------------------------------------------------

    \124\ See, e.g., Comment of Senators Markey and Merkley; Comment 
of Jean Connochie; Comment of Morgan Schmitz.
    \125\ See, e.g., U.S. Energy Info. Admin., Today in Energy, 
``EIA projects less than a quarter of the world's electricity 
generated from coal by 2050'' (Jan. 22, 2020), available at: https://www.eia.gov/todayinenergy/detail.php?id=42555 (projecting that 
``global electric power generation from renewable sources will 
increase more than 20% throughout the projection period (2018-
2050),'' while the share of natural gas generation remains fairly 
stable through 2050).
    \126\ Some commenters discussed the environmental and health 
risks that, in their view, are associated with the siting and 
operation of LNG export facilities near their home or community. 
These concerns generally involve the siting of natural gas-related 
infrastructure, and thus they are outside the scope of this 
proceeding. DOE notes, however, that all authorization holders under 
NGA section 3 are required to comply with any preventative and 
mitigative measures at export facilities imposed by federal, state, 
and local agencies, including by the Federal Energy Regulatory 
Commission. See, e.g., Jordan Cove Energy Project L.P., DOE/FE Order 
No. 3413-A, at 124 (Ordering Para. H).
---------------------------------------------------------------------------

F. Categorical Exclusion From NEPA for Existing Non-FTA Authorizations

a. Comments
    Commenters including API, Cheniere, and CLNG/NGSA assert that DOE's 
action to grant a term extension to any existing non-FTA authorization 
under the Proposed Policy Statement should be eligible for a 
categorical exclusion under DOE's NEPA regulations--specifically, 
categorical exclusion B5.7 (10 CFR part 1021, subpart D, appendix 
B).\127\ Cheniere and CLNG/NGSA state that local environmental and land 
use impacts associated with each existing authorization holder's 
facility have already been considered by DOE.\128\ Cheniere further 
argues that a categorical exclusion would be appropriate for existing 
authorizations because the proposed term extension would not require 
approvals for new construction projects associated with the export 
facilities.\129\ CLNG/NGSA adds that any pending and future non-FTA 
authorizations will be subject to NEPA, and thus will ``complete the 
appropriate process for public notice, comment and disclosure of 
environmental impacts.'' \130\ Finally, API asserts that application of 
a categorical exclusion for existing authorization holders would assist 
in reducing unnecessary regulatory burdens and delays under NEPA, thus 
facilitating exports of clean-burning natural gas.\131\
---------------------------------------------------------------------------

    \127\ See supra note 9; Comment of Cheniere at 2; Comment of API 
at 3-4; Comment of CLNG/NGSA at 2.
    \128\ Comment of Cheniere at 2; Comment of CLNG/NGSA at 2.
    \129\ Comment of Cheniere at 2.
    \130\ Comment of CLNG/NGSA at 2.
    \131\ Comment of API at 3; see also Comment of LNG Allies at 3 
(asking DOE to conduct term extension proceedings for existing 
authorization holders ``in an expedited manner'').
---------------------------------------------------------------------------

b. DOE Response
    As explained in the Proposed Policy Statement, DOE's environmental 
review process under NEPA may result in the preparation or adoption of 
an EIS or EA describing the potential environmental impacts associated 
with the application. In some cases, DOE may determine that an 
application is eligible for a categorical exclusion pursuant to DOE's 
regulations implementing NEPA, 10 CFR 1021.410, appendices A & B. As 
the commenters note, the categorical exclusion most commonly used by 
DOE in this context is categorical exclusion B5.7 (10 CFR part 1021, 
subpart D, appendix B5.7), which applies to natural gas import or 
export activities requiring minor operational changes to existing 
projects, but no new construction.\132\
---------------------------------------------------------------------------

    \132\ See supra note 9 (quoting categorical exclusion B5.7).
---------------------------------------------------------------------------

    DOE agrees with the suggestion of API and CLNG/NGSA that 
categorical exclusions facilitate NEPA by allowing federal agencies to 
focus their environmental review and resources on actions that could 
have significant impacts. The Council on Environmental Quality's NEPA 
regulations provide for categorical exclusions when an agency has 
identified a ``category of actions which do not individually or 
cumulatively have a significant effect on the human environment and 
which have been found to have no such effect in procedures adopted by a 
Federal agency . . . .'' \133\ DOE has made such a determination with 
respect to categorical exclusion B5.7.\134\
---------------------------------------------------------------------------

    \133\ 40 CFR 1508.4.
    \134\ 10 CFR 1021.410(a).
---------------------------------------------------------------------------

    Nonetheless, it is possible that an application to extend the 
export term of an existing non-FTA authorization could involve 
``extraordinary circumstances'' that warrant additional consideration 
under NEPA.\135\ DOE therefore declines to decide whether all 
applications requesting term extensions for existing non-FTA 
authorizations will fit within categorical exclusion B5.7 (or any other 
categorical exclusion). When implementing the Final Policy Statement 
for existing authorization holders, DOE will review the record and 
comply with its NEPA obligations in each individual application 
proceeding, consistent with its NEPA implementing regulations.
---------------------------------------------------------------------------

    \135\ 10 CFR 1021.410(b)(2) (under DOE's NEPA regulations, a 
proposal may not be categorically excluded from NEPA where there are 
``extraordinary circumstances related to the proposal that may 
affect the significance of the environmental effects of the 
proposal'').
---------------------------------------------------------------------------

    DOE acknowledges the concerns about delay raised by API, LNG 
Allies, and other commenters, who urge DOE to make efficient, timely 
decisions on applications for term extensions. As stated both in the 
Proposed Policy Statement and below, DOE is seeking to streamline these 
proceedings by providing a suggested application template for existing 
authorization holders and current applicants to utilize.\136\
---------------------------------------------------------------------------

    \136\ See infra Sec.  III.B.
---------------------------------------------------------------------------

G. Clarification of Export Limits

a. Comments
    DOE stated in the Proposed Policy Statement that ``[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,'' because ``[t]he maximum daily rate of export, 
set in billion cubic feet per day (Bcf/d), is already based on each 
facility's maximum approved liquefaction production capacity . . . .'' 
\137\
---------------------------------------------------------------------------

    \137\ Proposed Policy Statement, 85 FR 7678-7679.
---------------------------------------------------------------------------

    Industry commenters raise questions over DOE's use of the phrase 
``maximum daily rate of export.'' They point out that DOE's non-FTA 
orders authorize the volume of natural gas that may be exported each 
year--meaning in Bcf/yr--not each day (in Bcf/d).\138\ Accordingly, 
they ask DOE to clarify that the reference to ``maximum daily rate of 
export'' in the Proposed Policy Statement is not intended to establish 
daily export limits in existing or future non-FTA authorizations. 
Finally, they ask DOE to clarify that varying export quantities on any 
given day are permissible, so long as the authorization

[[Page 52247]]

holder does not exceed its authorized annual quantity of exports (in 
Bcf/yr).\139\
---------------------------------------------------------------------------

    \138\ Comment of DECP at 2; Comment of LNG Allies at 3; Comment 
of Golden Pass LNG at 1, 4-6; Comment of CLNG/NGSA at 4.
    \139\ Comment of DECP at 2; Comment of LNG Allies at 3; Comment 
of Golden Pass LNG at 6; Comment of CLNG/NGSA at 4.
---------------------------------------------------------------------------

b. DOE Response
    In Ordering Paragraph A of all existing long-term non-FTA orders, 
DOE authorizes exports strictly in annual terms (Bcf/yr).\140\ DOE 
clarifies that its reference to a LNG facility's ``maximum daily rate 
of export'' in the Proposed Policy Statement was not intended to 
suggest any deviation from this annual volume limitation. Rather, DOE's 
intent was to make clear that, although DOE's proposed term extension 
will increase the total volume of exports over the life of each 
authorization (by extending the duration of each qualifying 
authorization through December 31, 2050), the term extension will not 
affect the day-to-day liquefaction and export operations of any 
facility. Accordingly, so long as authorization holders do not exceed 
the annual export volume set forth in their order (in Bcf/yr), DOE 
takes no position on the quantities of LNG (or other natural gas) 
exported on any given day during their authorization term. A maximum 
daily rate would be impracticable, given the varied capacity of LNG 
tankers and the variability in volumes being handled at LNG export 
facilities each day.\141\
---------------------------------------------------------------------------

    \140\ See, e.g., Jordan Cove Energy Project L.P., DOE/FE Order 
No. 3413-A, at 123 (Ordering Para. A) (authorizing exports ``in a 
volume up to the equivalent of 395 Bcf/yr of natural gas''). DOE 
notes that it routinely expresses the cumulative total of approved 
non-FTA exports in daily terms (Bcf/d), but it authorizes export 
volumes in annual terms (Bcf/yr).
    \141\ See Comment of Golden Pass LNG at 6.
---------------------------------------------------------------------------

III. Final Policy Statement

A. Extended Term for Long-Term Non-FTA Authorizations

    For the reasons provided in the Proposed Policy Statement and in 
this Final Policy Statement, DOE adopts a term through December 31, 
2050, as the standard export term for long-term non-FTA authorizations. 
DOE has considered its obligations under NGA section 3(a), the public 
comments supporting and opposing the Proposed Policy Statement, and a 
wide range of information bearing on the public interest.\142\ DOE is 
thus discontinuing its practice of granting a standard 20-year export 
term for long-term authorizations to export domestically produced 
natural gas from the lower-48 states to non-FTA countries. For such 
applications and amendments granted under NGA section 3(a), DOE will 
authorize an export term lasting through December 31, 2050, inclusive 
of any make-up period (unless an applicant requests a shorter time 
period).\143\
---------------------------------------------------------------------------

    \142\ See Proposed Policy Statement, 85 FR 7674-7678.
    \143\ Although the Final Policy Statement applies only to long-
term exports from the lower-48 states (see supra note 12), DOE will 
consider whether to authorize a similar export term to non-FTA 
exports from Alaska as appropriate, in the context of any such 
application proceedings.
---------------------------------------------------------------------------

    This Final Policy Statement does not affect the continued validity 
of long-term non-FTA orders that DOE has already issued. Nor are 
existing authorization holders required to apply for the term 
extension. If an authorization holder wishes to maintain its current 
20-year term--or is uncertain whether or when to apply for the term 
extension--the authorization holder is under no obligation to take 
action under this Final Policy Statement. For authorization holders and 
applicants who wish to apply for the term extension, however, DOE will 
implement the process for the term extension as proposed.

B. Implementation Process

    DOE's process for implementing the term extension will be based on 
the status of the authorization holder or applicant, as follows:
    (1) For existing non-FTA authorizations: As noted, DOE has issued 
43 final long-term non-FTA authorizations.\144\ These existing 
authorization holders may request the term extension on a voluntary 
opt-in basis. Specifically, each non-FTA authorization holder may file 
an application with DOE requesting to amend its authorization to extend 
its export term through December 31, 2050 (inclusive of any make-up 
period), with an attendant increase in the total export volume over the 
life of the authorization;
---------------------------------------------------------------------------

    \144\ See supra note 15.
---------------------------------------------------------------------------

    (2) For pending non-FTA applications: There are currently 16 long-
term non-FTA applications pending before DOE.\145\ On a voluntary opt-
in basis, these applicants may amend their application to request an 
export term through December 31, 2050 (inclusive of any make-up 
period), with an attendant increase in the total requested export 
volume over the life of the authorization; \146\ and
---------------------------------------------------------------------------

    \145\ See supra note 16.
    \146\ See 10 CFR 590.204.
---------------------------------------------------------------------------

    (3) For future non-FTA applications: Future long-term non-FTA 
export authorizations, if granted, will have a standard export term 
lasting through December 31, 2050, unless a shorter term is requested 
by the applicant. Accordingly, all new long-term applications to export 
domestically produced natural gas from the lower-48 states, including 
LNG, should request an export term lasting through December 31, 2050 
(inclusive of any make-up period)--or state that the applicant requests 
a shorter export term.
    In each individual docket proceeding, the authorization holder or 
applicant will 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.\147\ For applications to 
amend existing non-FTA orders and pending non-FTA applications (#1 and 
#2), DOE is providing a suggested application template (including an 
option for consolidated non-FTA and FTA application proceedings) to 
ensure more consistent, streamlined proceedings. This template may be 
found on DOE/FE's website at: www.energy.gov/node/4513092.
---------------------------------------------------------------------------

    \147\ See 10 CFR 590.201, 590.202, 590.204(a) (``The applicant 
may amend . . . the application at any time prior to issuance of the 
Assistant Secretary's final opinion and order resolving the 
application . . . .''), 590.407 (``Reports of changes'').
---------------------------------------------------------------------------

    For applications to amend existing non-FTA orders and pending non-
FTA applications (#1 and #2), DOE will provide notice of the term 
extension in the Federal Register. Interested parties will be provided 
15 days in which to submit protests, motions to intervene (or notices 
of intervention, as applicable), and written comments on the requested 
term extension only.\148\ Following the notice and comment period in 
each proceeding, DOE will conduct a public interest analysis of the 
application (or amended application) under NGA section 3(a).
---------------------------------------------------------------------------

    \148\ See 10 CFR 590.205.
---------------------------------------------------------------------------

    For existing non-FTA orders, the public interest analysis will be 
limited to the application for the term extension--meaning an 
intervenor or protestor may challenge the requested extension but not 
the existing non-FTA order. DOE also will comply with NEPA. Consistent 
with its established practice, DOE will respond to any comments or 
protests received in its final order on each application (or amendment) 
requesting the extended export term.
    For new long-term non-FTA applications (#3), DOE will provide 
notice of the application in the Federal Register and will take action 
on the application consistent with its established procedures.\149\
---------------------------------------------------------------------------

    \149\ See id.

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

[[Page 52248]]

C. Alignment of FTA Export Terms

    Applicants typically apply for both long-term FTA and non-FTA 
authorizations to have flexibility in determining their export 
destinations.\150\ As stated, however, this Final Policy Statement does 
not apply to applications and authorizations to export natural gas to 
FTA countries.\151\ Under NGA section 3(c), DOE is required to grant 
FTA applications ``without modification or delay.'' \152\ Because of 
this statutory standard, applicants for long-term FTA authorizations 
have not been 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 often prefer to align 
their FTA and non-FTA exports over the same time period for 
administrative efficiencies.\153\ For this reason, DOE anticipates that 
authorization holders and applicants who take action under this Final 
Policy Statement will request a comparable extension in their existing 
or future long-term FTA export terms, respectively. Where possible, DOE 
requests that authorization holders and applicants submit a 
consolidated FTA and non-FTA extension application (using DOE's 
suggested template) to ensure more consistent, streamlined proceedings.
---------------------------------------------------------------------------

    \150\ 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.
    \151\ See supra note 3.
    \152\ 15 U.S.C. 717b(c).
    \153\ Under DOE's long-term orders, the volumes authorized for 
export to FTA and non-FTA countries 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 enhance 
flexibility. See, e.g., Jordan Cove Energy Project L.P., DOE/FE 
Order No. 3413-A, at 122 (Term and Condition I) (stating that 
``Jordan Cove may not treat the FTA and non-FTA export volumes as 
additive to one another'').
---------------------------------------------------------------------------

IV. Administrative Benefits

    In this Final Policy Statement, DOE is not proposing any new 
requirements under 10 CFR part 590. Rather, DOE's intent is to minimize 
administrative burdens and to enhance certainty for both authorization 
holders and foreign buyers of U.S. LNG. This, in turn, will make U.S. 
export projects even more competitive in the global market.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this Final 
Policy Statement.
Signing Authority
    This document of the Department of Energy was signed on July 29, 
2020, by Steven Eric Winberg, Assistant Secretary, Office of Fossil 
Energy. That document with the original signature and date is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on July 29, 2020.
Treena V. Garrett
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-16836 Filed 8-24-20; 8:45 am]
BILLING CODE 6450-01-P