DOE streamlines approvals for short-term LNG exports, eyeing spot market

— The Department of Energy will stop requiring separate authorizations for US LNG exporters to ship volumes on short-term and long-term bases, in what the agency touted as a step to cut administrative burdens for a sector supported by the Trump administration.

Instead of the separate authorizations, DOE said Jan. 8 that its new policy statement would allow certain long-term export authorizations to export the same approved volumes for the short-term market under deals with terms of less than two years. Doing so would remove what the agency called a duplicative requirement for LNG exporters.

DOE also said it was issuing a blanket order amending several existing long-term LNG export orders to add the short-term export authority. The policy statement was signed on Dec. 18.

"We are increasingly seeing more sales of LNG on the spot market, and this action by DOE is allowing more flexibility for US LNG exporters," Deputy Secretary of Energy Mark Menezes said in a Jan. 8 statement. "With this policy, US LNG exporters can let the market — not our regulatory process — determine which LNG cargos will be exported under long-term or short-term agreements on the spot market."

The policy change was one of several efforts by the administration to ease regulatory requirements for LNG exports over the past few years.

In December, DOE released the final version of a rule that put limits on National Environmental Policy Act reviews of LNG export applications. DOE has also been extending LNG export authorizations through 2050 under a separate policy change that went into effect in late August.

The incoming administration of President-elect Joe Biden could revoke policy statements underpinning LNG-focused deregulatory initiatives by the current administration.