DGCC Responds to Recent DOE Pause on Approving New LNG Exports

Differentiated Gas Coordinating Council Blog

February 13, 2024

Late last month, the U.S. Department of Energy (DOE) announced a moratorium on the approval of new liquified natural gas (LNG) exports to more robustly study the environmental impacts of the LNG industry. In doing so, the DOE ignored recent voluntary market and regulatory developments that support enhanced monitoring, measurement, and mitigation of methane emissions throughout the value chain. With this in mind, the DOE must not create redundant evaluation tools that may only serve to re-examine, re-test, and re-review energy products that will be delivered in accordance with new regulatory requirements or have already potentially gone through multiple levels of emissions monitoring, measurement, reporting, and verification (MMRV). Instead, the DOE should leverage existing policy actions and its ongoing international MMRV framework to ensure emissions transparency in the LNG supply chain.

For context, in the early 2000s, the U.S. experienced record-high energy prices; Americans paid over  $13 per million Btu of natural gas. However, thanks to the deployment of innovative new technologies and a resulting unprecedented increase in natural gas production, the United States rapidly shifted from a net importer of natural gas to a net exporter of LNG in just a few years. This dramatic shift allowed the U.S. to cement its position as a global energy leader, providing low-emissions energy products to its allies and trading partners around the world. Similarly, today, a rapid evolution and adoption of innovative methane detection technologies and emission accounting methods are enabling domestic and international buyers to have the ability to demand access to differentiated natural gas-- characterized by the assessment and verification of its superior environmental performance criteria, particularly methane measurement, across the value chain.

The Natural Gas Act (NGA) requires DOE to determine whether LNG exports are “in the public interest” if the importing nation does not have a free trade agreement with the U.S. The DOE’s recent announcement will pause new LNG export approvals while the department completes a new analysis on “market, economic, national security, environmental considerations... energy security, greenhouse gas emissions including carbon dioxide and methane, and other factors.” While the Federal Energy and Regulatory Commission authorizes the siting and construction of LNG import and export facilities, the DOE retains the authority to approve import and export licenses for LNG shipments.

The Biden Administration is already enacting significant ongoing efforts within DOE and other federal agencies to advance comparable and reliable information about greenhouse gas emissions across the natural gas supply chain to drive global emissions reductions. DOE recently established an international working group that will develop a consistent framework for the Measurement, Monitoring, Reporting, and Verification (MMRV) of methane, carbon dioxide, and other greenhouse gas emissions that occur during the production, processing, transmission, liquefaction, transport, and distribution of natural gas.

The MMRV Working Group will create a shared and broadly credible global framework for estimating greenhouse gas emissions across the international supply chain for natural gas that can be used by both buyers and sellers or by individual governments. This combined effort has the potential to drastically cut the emissions of LNG trade around the world, going above and beyond regulatory standards.

These efforts are in addition to the Environmental Protection Agency's new regulations on methane emissions and greenhouse gas reporting in the oil and gas sector, the Bureau of Land Management's efforts to promote responsible energy production on federal lands, and the Inflation Reduction Act's Methane Emissions Reduction Program, which allocates $1.55 billion to mitigate emissions. Additionally, the National Petroleum Council, at the request of the Secretary of Energy, is in the process of conducting a study on reducing greenhouse gas emissions in the nation's natural gas value chain, and the findings of that study are expected in the spring.

The extensive federal efforts already put in place to measure and mitigate emissions from the natural gas supply chain will allow the U.S. and our trading partners to better manage and improve the emissions accounting of their operating systems. The current pause on the approval of new LNG exports is harmful to U.S. leadership in emissions transparency and MMRV development. DOE should allow for the rollout of the current suite of federal actions designed to ensure U.S. leadership in cutting-edge measurement protocols and monitoring technologies alongside comprehensive regulatory frameworks and international collaborations. These efforts will further position the U.S. at the forefront of responsible energy production and environmental stewardship.