08 December 2020

U.S. Department of Energy Implements Updated Regulations on National Environmental Policy Act Compliance for Natural Gas Act Authorizations

On December 4, the U.S. Department of Energy (DOE) issued a final rule updating the National Environmental Policy Act (NEPA) implementing regulations applicable to its review of applications to export domestically produced liquified natural gas (LNG) to non-free-trade-agreement countries under Section 3 of the Natural Gas Act. DOE has determined that these actions are categorically excluded from NEPA review because 1) DOE is required by Section 3(c) of the Natural Gas Act to authorize these exports and 2) the reasonably foreseeable environmental effects DOE must review are limited — beginning at the point of export and extending to marine transport effects only. DOE is also removing reference to the import of LNG from its NEPA implementing regulations because the Energy Policy Act of 1992 leaves DOE with no discretion in its approval of such imports.

The rulemaking follows an action by the White House Council on Environmental Quality (CEQ) in July that seeks to streamline and simplify the NEPA process writ large (more details on the CEQ action can be found here) by making clear that an agency does not have to consider potential environmental effects that the agency has no authority to prevent. Here, DOE has determined that in authorizing the export of LNG to non-free-trade-agreement countries, it has no authority over the construction or operation of natural gas export facilities, so it need not review any associated environmental impacts of such actions. Instead, its environmental review is limited to potential impacts at or after the point of export. Because DOE has determined that these effects, which are limited to those from the marine transport of LNG, have little environmental impact, DOE considers its export authorization to be categorically excluded from NEPA review.