CLNG President Testifies on Barriers to LNG Exports

Center for Liquefied Natural Gas (CLNG) President Bill Cooper challenged the U.S. Department of Energy’s (DOE) queue for deciding LNG export applications as arbitrary and unlawful while testifying today before the House Energy Commerce Subcommittee on Energy and Power’s hearing, “U.S. Energy Abundance: Regulatory, Market, and Legal Barriers to Export.”

“Although I commend DOE for their good work in approving the Sabine Pass and Freeport LNG export applications, the problem is that there is no certainty as to when DOE will make a decision on the remaining 15 applications. Once the public comment period ends, DOE should make a decision based on the merits of the application. DOE’s effort to proceed by arbitrarily creating its own queue to approve LNG export applications is unlawful, and essentially changes the rules midstream,” said Cooper.

“The American people deserve to know that their government agencies are following the letter of the law. If we simply accept that a federal agency can by its own decree amend its rules and apply those rules retroactively, there could be no end to the process. The applicants reasonably relied on the only enforceable rules published by DOE when completing their applications, isn’t it reasonable to expect the same adherence to the rules from DOE?”

Cooper was invited by the subcommittee to provide testimony regarding the regulatory structure established by the Energy Department for LNG exports. His testimony provided a critique of DOE’s decisions on how it has chosen to process pending export applications. According to Cooper, DOE’s issuance of its order of precedence (queue) in deciding whether to approve pending LNG export applications is unlawful for the following reasons:

• The creation and use of a queue is an amendment to the rules publicly established by DOE as set forth in Title 10 Code of Federal Regulations (CFR) Part 590 and is subject to the same notice and comment requirements as the original rules. Notice of the queue was not published in the Federal Register with an opportunity for the public to comment. The failure to provide such a notice and comment opportunity renders the queue void.
• Any amendment to an existing rule cannot be applied retroactively, thus making the queue ineffective as applied to the 15 pending applications at the time of the queue’s issuance, even if the queue was properly issued, which it was not.

“We look forward to working with the subcommittee and the Department of Energy on a path forward that will ensure the remaining LNG export applications are considered fairly and within a reasonable time period based upon lawfully established rules,” said Cooper.