US throws off the regulatory shackles of red tape snags to unlock LNG export bonanza

The U.S. Department of Energy (DOE) has set its mind on freeing its liquefied natural gas (LNG) industry from the burden of regulatory barriers standing in the way of unleashing an LNG export boom by moving beyond the setback it perceives to stem from Biden-era policy requirements.

The U.S. Department of Energy’s action to remove the additional regulatory barriers for requests to LNG export commencement date extensions does not come as a surprise given the Trump administration’s zest to ensure the revival of the oil and gas ‘golden’ age.

The latest step to enable this has led the DOE to rescind a Biden-era policy statement, issued in April 2023, that required authorized LNG exporters to meet stringent criteria before the agency would consider a request to extend a commencement date for an approved project.

Moreover, DOE’s authorizations for natural gas exports to non-free trade agreement (non-FTA) countries usually require exporters to begin exports within seven years of authorization to allow time for the financing and construction of the associated export facility, but authorization holders can request additional time.  

In April 2023, the Department of Energy came up with a policy statement that required projects seeking a commencement deadline extension to both be under construction and able to demonstrate that extenuating circumstances outside the authorization holder’s control prevented the start of exports within seven years.

The U.S. now claims that this policy statement added unnecessary red tape to the extensive LNG export permitting process and made it more difficult for operators of approved projects to obtain necessary extensions. 

Tala Goudarzi, Principal Deputy Assistant Secretary of the Office of Fossil Energy and Carbon Management, commented:“I am glad to sign this action to return to common-sense policy on reviewing commencement date extension requests.

“Throughout the past few years, many factors, including the actions of the prior administration, have made it unnecessarily rigid to obtain and maintain an authorization to export U.S. LNG to non-free trade agreement countries.” 

By rescinding this policy statement, DOE claims to be removing a regulatory barrier for LNG exporters; thus, it will again review requests to extend the commencement date of non-free trade agreement export authorizations on a case-by-case basis.

Therefore, authorized exporters will no longer need to meet stringent criteria for their request to be considered for approval, including those outlining that the associated export project needs to be under construction and the authorization holder having to prove extenuating circumstances outside its control prevented the start-up of exports within seven years.  

The rescission of this 2023 policy statement marks the sixth LNG-related issuance from the DOE since President Donald Trump took office, as it granted an export approval to Commonwealth LNG on February 14 and issued an order on rehearing removing barriers for the use of LNG as bunkering fuel on February 28.

In addition, an approval providing the Golden Pass LNG terminal more time to set exports in motion came on March 5, another approval granting the Delfin LNG project additional time to kick off exports was issued on March 10, followed by an export approval for CP2 LNG on March 19.

The Trump administration is pushing for an ‘all-of-the-above’ energy policy to enable fossil fuels to coexist side-by-side with renewables and other low-carbon and clean sources of supply.