Julia Sullivan, Hank Terhune and Steve Davis Pen LNG Permit Article for Oil & Gas Journal

Oil & Gas Journal has published the article “Planned LNG plants must consider potential permit modifications,” by Akin Gump energy regulation, markets and enforcement practice co-head Julia Sullivan, public law and policy partner Hank Terhune and energy partner Steve Davis.

In the article, the authors discuss, among other topics, potential political, commercial and regulatory concerns associated with the U.S. Department of Energy’s (DOE) approval process for LNG liquefaction plants including:

  • LNG exports’ effect on domestic energy prices: “While existing studies show LNG exports will create net economic benefits, the impacts are not positive for all groups, and there are strong constituencies that oppose increased exports. DOE recently announced that it intends to update its economic studies based on more current data. It is unclear what impact the updated studies will have on the political debate or when they will be completed.”
  • The timing—and limited window of opportunity—for DOE’s actions on dozens of pending export applications: “DOE may impose cumulative limits on the total volume of LNG that can be exported from the US to countries with no relevant free trade agreement (FTA)... DOE has been taking at least 24 months to act on applications to export LNG to non-FTA countries and recently adopted a policy to defer action on applications until a given project has completed the environmental review process required under the National Environmental Policy Act (NEPA). This means project developers will invest millions of dollars to complete an environmental review with no certainty DOE will grant non-FTA export authorization.”
  • The regulatory risk: “After it issues an export authorization, DOE has statutory authority to amend or rescind the authorization as necessary or appropriate to protect the public interest. To date, DOE has never issued a ‘supplemental order’ to revoke an existing LNG import or export authorization. The risk, however, that DOE could issue an order requires careful consideration by project developers.”