The Department of Energy (“DOE”) has announced that it will no longer be issuing conditional approvals of export licenses for liquefied natural gas (“LNG”). DOE will instead wait until the Federal Energy Regulatory Commission (“FERC”) has approved environmental reviews for the projects, including rehearing requests, allowing DOE to focus its efforts on the applications of projects that are more likely to reach completion.
DOE had previously relied upon a system that created a queue for conditional approvals based upon the order in which an application for an export permit was made, but had accumulated 24 applications in the queue as of March 2014. Over the past three years, DOE has issued eight conditional approvals, only one of which has received final approval. The queue process held DOE up from reviewing the applications of projects that already had FERC approval.
The new process places the onus on FERC, as only ten projects have formally filed for environmental review, with another three in the pre-filing process. Over the past two years, FERC has approved three projects, including the one that has received final DOE approval and has begun construction; under the new policy, these two other projects are now ripe for export license consideration by DOE.
Some have commented that this new policy still does not clarify the timelines project teams can expect for approval of all the necessary reviews and permit applications.