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Following the Department of Energy’s finalization of its updated procedure for reviewing applications to export liquefied natural gas to countries without free trade agreements, the DOE now will only consider applications that have met the requirements under the National Environmental Policy Act before rendering a final decision. Energy Secretary Ernest J. Moniz noted to Roll Call that any further changes to the regulatory oversight of LNG export applications would have to come from congressional action. Acknowledging that export applicants have already been subjected to a moratorium on review, the compilation of multiple economic reports, two public comment periods, the creation of an “order of precedence” and now a full scale change in approval policy, several members of Congress have been spurred into action to address the regulatory process at the DOE.
Thanks to leadership of lawmakers such as Reps. Cory Gardner, R-Colo., and Gene Green, D-Texas, and Sens. Mark Udall, D-Colo., John McCain, R-Ariz., and John Hoeven, R-N.D., several straightforward, common-sense legislative solutions have been offered. The bipartisan majority with which Gardner’s and Green’s Domestic Prosperity and Global Freedom Act (HR 6) passed the House in June is indicative of mounting frustration for how cumbersome and slow the DOE has been in allowing the progression of LNG export projects.
The legislative solutions proposed rightly bear in mind that project developers should be able to have the reasonable expectation that upon completion of the application, filing with the DOE, payment of the filing fee and expiration of the public comment period established in the Federal Register, the DOE would require nothing more than the official record to reach a verdict. A timely decision from the agency sends a clear message that a project is on track. Given that the expense of completing an environmental review under the Federal Energy Regulatory Commission can cost tens of millions of dollars, it is unduly burdensome to require applicants to enter that process with no indication of if or when the DOE will address a permit to export the commodity of natural gas.
A delayed DOE approval process not only affects applicants, but needlessly slows the widespread economic benefits that expanded LNG exports from the U.S. stand to bring our economy. According to one report from ICF International, employment from LNG exports is expected to create or support between 73,100 and 452,300 jobs between 2016 and 2035, with 7,800 to 76,800 of those jobs being in the manufacturing industry alone. Meanwhile, the Council on Foreign Relations has estimated that the increased natural gas production from LNG exports will result in approximately 40,000 jobs across the country.
The United States is fortunate to be in a position where it already has a robust regulatory structure in place and enough natural gas reserves to safely and responsibly move forward with LNG exports. Since Moniz has said it is up to Congress to change the process, applicants are surely saying, “Congress, please act and act quickly.”
Bill Cooper is president of The Center for LNG.