The U.S. Department of Energy (DOE) said its temporary pause on new LNG export authorizations would not affect pending extension requests for projects’ existing export licenses.
“To be clear, this pause does not affect that process,” DOE Deputy Secretary David M. Turk said during a Senate Energy and Natural Resources Committee hearing on Thursday. The two-hour hearing followed in the footsteps of a House panel in examining the Biden administration’s pause of liquefied natural gas (LNG) authorizations announced in late January.
Turk was responding to a question from U.S. Sen. Lisa Murkowski (R-AK) about the status for authorized projects seeking extensions to the seven-year deadline of their license to start exporting the super-chilled fuel.
“This is stuff that has been authorized, but sometimes seven years is not quite enough,” Turk said. He reiterated DOE’s policy announced last April that projects could apply for an extension beyond seven years if they met two criteria: had physically begun construction and faced “extenuating circumstances outside of the control of the applicant.”
Last April, DOE denied a request to extend the export license for Energy Transfer LP’s Lake Charles LNG facility in Louisiana for a second time. Lake Charles is reapplying for a new permit, as is Glenfarne Energy Transition LLC’s Magnolia LNG for its proposed facility in Louisiana.
The Delfin LNG project offshore Louisiana may be able to benefit from the remaining window for extensions. Its non-Free Trade Agreement (FTA) permit expires in June. However, it faces significant hurdles given the stringent and unclear policies for granting an extension, according to consultancy Rapidan Energy Group. There are risks because of the capital expenditures required to prove construction has begun, and a four-year extension is not guaranteed, the consultancy wrote.
Still, some projects facing a license deadline are not signaling the need to seek an extension.
The Amigo LNG project in Guaymas in northwestern Mexico holds a DOE authorization valid until December 2027. The CEO of its developer, Singapore-based LNG Alliance Ltd., told NGI that the permitting pause would not impact the project for now.
Tallying The Effects
In the hearing, Turk defended the pause, saying construction of new terminals would push the U.S. LNG sendout capacity to roughly 26 Bcf/d from an existing 14 Bcf/d, and authorizations for an additional 26 Bcf/d of projects that have not yet begun construction would bring total LNG export capacity to 48 Bcf/d, he said.
Senate Committee Chairman Joe Manchin (D-WV) challenged him on the volume of LNG exports affected. “I think you need to be accurate on that Mr. Turk,” Manchin said. “That 22 [Bcf/d] has been in the queue for quite awhile. It only moves when the market moves … But by doing the pause, it's like we're gonna harm the industry here, and we really don't care what happens in the rest of the world. 48 [Bcf/d] might be the magic number, I don't know.”
“The numbers are important; you’re absolutely right,” Turk said. He added that DOE estimates there is another 11.2 Bcf/d of potential LNG export capacity beyond the 48 Bcf/d. “That is a significant additional amount of volume – that is what is being paused now during the consideration.”
An NGI analysis estimated 9.3 Bcf/d of commercially advanced projects in the United States and Mexico under DOE jurisdiction that could be impacted in the near term. In addition, there is another 3 Bcf/d of proposed export capacity – mostly projects that have been long proposed but have yet to sign contracts or pre-file with FERC – that could also be impacted.
Notably, Manchin showed an openness to reviewing the authorized LNG export capacity, though not through DOE’s current approach.
“We have a little difference of opinion right now,” Manchin said. “That’s what this is all about. That’s democracy. This committee can work through it. We’ll find the answer. And all we’re asking for is, consider removing the pause until we know the facts. Come back and ask for your pause and show the facts of why you need it and what the number would be. We’re not there. We don’t have that information. I don’t want to scare the bejesus out of our friends, that’s all.”
