Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67251 

Preferred Alternative 

DOE does not have a preferred 

alternative for the disposal of depleted 

uranium, but does identify factors that 

DOE plans to consider in developing a 

preferred alternative or alternatives for 

inclusion in the Final SEIS. These 

factors are discussed in the SUMMARY

and chapter four of the Draft SEIS. The 

preferred alternative could be a 

combination of two or more alternatives. 

DOE invites public comments on these 

factors and any additional factors that 

should be considered in the selection of 

a preferred alternative and why. 

Next Steps 

Following the end of the public 

comment period, DOE will consider 

public comments on the Draft SEIS in 

preparing the Final SEIS. After issuing 

the Final SEIS, DOE will consider the 

environmental impacts presented in the 

Final SEIS, along with other appropriate 

information in proposing its decision(s) 

related to the disposal of depleted 

uranium for an Amended Record of 

Decision. 

Web-based Public Hearing Information 

Registration details are included 

below and are also available on the DOE 

EM SEIS project website (See 

ADDRESSES section). If you are joining 

the web-based public hearing via 

internet, copy and paste the link below 

to login to the WebEx Meeting Room, 

then follow prompts after entering the 

access code. If you are joining the webbased public hearing via phone, dial the 

US Toll number below and follow 

prompts to enter access code. For Global 

Call in numbers, visit the DU Oxide 

SEIS website. Documents and the 

presentation for the public hearing will 

be made available at http://

www.energy.gov/em/dispositionuranium-oxide-conversion-depleteduranium-hexafluoride, as well as shared 

during live web-based public hearings. 

Comments will be accepted during the 

web-based public hearing, by mail, by 

email, and through submittal of 

comment forms on the DU Oxide SEIS 

website. Persons who wish to speak may 

sign up to speak before each meeting by 

submitting a request to DUF6_NEPA@

em.doe.gov. 

• Join web-based public hearing via 

WebEx Meeting Room: 

Æ https://doe.webex.com/join/duf6_

nepa_(Copy and Paste into web 

browser). 

• Join web-based public hearing by 

phone: 

Æ US Toll: 1–415–527–5035 (For 

Global Call-In Numbers visit DU Oxide 

SEIS website). 

Æ Access code: 988 230 782 #. 

Public Reading Rooms and Libraries 

Copies of the Draft SEIS are available 

at http://www.energy.gov/em/ 

disposition-uranium-oxide-conversiondepleted-uranium-hexafluoride. Copies 

may also be found for public review at 

the locations listed below: 

District of Columbia 

U.S. Department of Energy 

Freedom of Information Act Electronic 

Reading Room: 

https://www.energy.gov/management/ 

office-management/operationalmanagement/freedom-informationact/reading-room 

Nevada 

Nevada Site Office, U.S. Department of 

Energy 

Public Reading Room 

755 East Flamingo Road, Room 103 

Las Vegas, NV 89119, (702) 794–5106. 

Amargosa Valley Library 

829 E Farm Road 

HCR 69 Box 401–T 

Amargosa, NV 89020, (775) 372–5340. 

Clark County Library 

1401 E Flamingo Road 

Las Vegas, NV 89119, (702) 507–3400. 

Indian Springs Library 

715 Gretta Lane 

P.O. Box 629 

Indian Springs, NV 89018, (702) 879– 

3845. 

Las Vegas Library 

833 N Las Vegas Boulevard 

Las Vegas, NV 89101, (702) 507–3500. 

Pahrump Community Library, 

701 S. East Street 

Pahrump, NV 89048, (775) 727–5930. 

Tonopah Public Library, 

167 S Central Street 

Tonopah, NV 89049, (775) 482–3374. 

Utah 

Tooele City Public Library 

128 W Vine Street 

Tooele, UT 84074, (435) 882–2182. 

Texas 

Andrews County Library 

109 NW 1st Street 

Andrews, TX 79714, (432)-523–9819. 

Kentucky 

U.S. DOE Environmental Information 

Center 

Emerging Technology Center (Room 

221) 

5100 Alben Barkley Drive 

Paducah, KY 42001, (270) 554–3004. 

McCracken County Public Library 

555 Washington Street 

Paducah, KY 42003, (270) 442–2510. 

Ohio 

U.S. DOE Environmental Information 

Center 

Ohio State Endeavor Center 

1862 Shyville Road (Room 207) 

Piketon, OH 45661, (740) 289–8898. 

Portsmouth Public Library 

1220 Gallia Street 

Portsmouth, OH 45662, (740) 354–5688. 

Scioto County Law Library 

602 Seventh Street (Room 306) 

Portsmouth, OH 45662, (740) 355–8259. 

Individual commentators’ names and 

addresses (including email addresses) 

received as part of oral statements at the 

public hearings or comment documents 

on this Draft SEIS normally are part of 

the public record. DOE plans to 

reproduce comment documents in their 

entirety in the Final SEIS, as 

appropriate, and to post all comment 

documents received in their entirety on 

the DU oxide SEIS website at the close 

of the public comment period. Any 

person wishing to have his/her name, 

address, or other identifying 

information withheld from the public 

record of comment documents must 

state this request prominently at the 

beginning of any comment document. 

DOE will honor the request to the extent 

allowable by law. All submissions from 

organizations or businesses will be 

included in the public record and open 

to public inspection in their entirety. 

Issued at Washington, DC on December 20, 

2018. 

Elizabeth A. Connell, 

Acting Associate Principal Deputy Assistant 

Secretary for Regulatory and Policy Affairs. 

[FR Doc. 2018–28249 Filed 12–27–18; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

Study on Macroeconomic Outcomes of 

LNG Exports: Response to Comments 

Received on Study 

AGENCY: Office of Fossil Energy, 

Department of Energy. 

ACTION: Notice of response to comments. 

FE Docket No. 

Jordan Cove Energy Project, L.P ........................................................................................................................................................ 12–32–LNG 

Gulf LNG Liquefaction Company, LLC ................................................................................................................................................ 12–101–LNG 


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67252 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 

FE Docket No. 

CE FLNG, LLC .................................................................................................................................................................................... 12–123–LNG 

MPEH LLC ........................................................................................................................................................................................... 13–26–LNG 

Venture Global Calcasieu Pass, LLC .................................................................................................................................................. 13–69–LNG 

Eos LNG LLC ...................................................................................................................................................................................... 13–116–LNG 

Barca LNG LLC ................................................................................................................................................................................... 13–118–LNG 

Commonwealth LNG, LLC ................................................................................................................................................................... 13–153–LNG 

Venture Global Calcasieu Pass, LLC .................................................................................................................................................. 14–88–LNG 

SCT&E LNG, LLC ................................................................................................................................................................................ 14–98–LNG 

Venture Global Calcasieu Pass, LLC .................................................................................................................................................. 15–25–LNG 

G2 LNG LLC ........................................................................................................................................................................................ 15–45–LNG 

Texas LNG Brownsville LLC ............................................................................................................................................................... 15–62–LNG 

Strom Inc ............................................................................................................................................................................................. 15–78–LNG 

Port Arthur LNG, LLC .......................................................................................................................................................................... 15–96–LNG 

Rio Grande LNG, LLC ......................................................................................................................................................................... 15–190–LNG 

Eagle LNG Partners Jacksonville, LLC ............................................................................................................................................... 16–15–LNG 

SeaOne Gulfport, LLC ......................................................................................................................................................................... 16–22–CGL 

Venture Global Plaquemines LNG, LLC ............................................................................................................................................. 16–28–LNG 

Driftwood LNG, LLC ............................................................................................................................................................................ 16–144–LNG 

Fourchon LNG, LLC ............................................................................................................................................................................ 17–105–LNG 

Galveston Bay LNG, LLC .................................................................................................................................................................... 17–167–LNG 

Freeport LNG Expansion L.P., and FLNG .......................................................................................................................................... 18–26–LNG 

Corpus Christi Liquefaction Stage III, LLC .......................................................................................................................................... 18–78–LNG 

Energı ́a Costa Azul, S. de R.L. de C.V ............................................................................................................................................... 18–144–LNG 

Energı ́a Costa Azul, S. de R.L. de C.V ............................................................................................................................................... 18–145–LNG 

SUMMARY: On June 12, 2018, the Office 

of Fossil Energy (FE) of the Department 

of Energy (DOE) gave notice of the 

availability of a study, Macroeconomic 

Outcomes of Market Determined Levels 

of U.S. LNG Exports (2018 LNG Export 

Study or 2018 Study), in the abovereferenced proceedings and invited the 

submission of public comments on the 

Study. DOE commissioned the 2018 

LNG Export Study to inform its decision 

on pending and future applications 

seeking authorization to export 

domestically produced liquefied natural 

gas (LNG) from the lower-48 states to 

countries with which the United States 

does not have a free trade agreement 

(FTA) requiring national treatment for 

trade in natural gas, and with which 

trade is not prohibited by U.S. law or 

policy (non-FTA countries). The 2018 

LNG Export Study evaluates a wider 

range of scenarios than DOE’s prior LNG 

export studies, including examining the 

probability of various export scenarios. 

In this document, DOE/FE responds to 

the 19 public comments received on the 

2018 Study and summarizes its 

conclusions on the Study. The 2018 

LNG Export Study and the public 

comments are posted on the DOE/FE 

website at: https://fossil.energy.gov/app/ 

docketindex/docket/index/10. 

DATES: Applicable on: December 28, 

2018. 

FOR FURTHER INFORMATION CONTACT: 

Amy Sweeney, U.S. Department of 

Energy (FE–34), Office of Regulation, 

Analysis, and Engagement, Office of 

Fossil Energy, Forrestal Building, Room 

3E–042, 1000 Independence Avenue 

SW, Washington, DC 20585; (202) 586– 

2627; amy.sweeney@hq.doe.gov; or 

Cassandra Bernstein, U.S. Department of 

Energy (GC–76), Office of the Assistant 

General Counsel for Electricity and 

Fossil Energy, Forrestal Building, Room 

6D–033, 1000 Independence Ave. SW, 

Washington, DC 20585; (202) 586–9793; 

cassandra.bernstein@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Acronyms and Abbreviations. A 

number of acronyms and abbreviations 

are used in this document and set forth 

below for reference. 

AEO Annual Energy Outlook 

APA Administrative Procedure Act 

API American Petroleum Institute 

Bcf/d Billion Cubic Feet per Day 

Bcf/yr Billion Cubic Feet per Year 

CLNG Center for Liquefied Natural Gas 

CNG Compressed Natural Gas 

DOE Department of Energy 

DQA Data Quality Act 

EA Environmental Assessment 

EIA U.S. Energy Information 

Administration 

EIS Environmental Impact Statement 

FE Office of Fossil Energy, U.S. Department 

of Energy 

FERC Federal Energy Regulatory 

Commission 

FTA Free Trade Agreement 

GDP Gross Domestic Product 

GNGM Global Natural Gas Model 

HOGR High Oil and Gas Resource and 

Technology 

IEA International Energy Agency 

IEO International Energy Outlook 

JCEP Jordan Cove Energy Project L.P. 

LNG Liquefied Natural Gas 

LOGR Low Oil and Gas Resource and 

Technology 

MMBtu Million British Thermal Units 

mtpa Million Metric Tons per Annum 

NEPA National Environmental Policy Act 

of 1969 

NERA NERA Economic Consulting 

NGA Natural Gas Act of 1938 

NGL Natural Gas Liquid 

NOA Notice of Availability 

ppm Parts Per Million 

ROW Rest of World 

Tcf Trillion Cubic Feet 

WEO World Energy Outlook 

I. Background 

A. DOE Export Authorizations Under 

Section 3 of the Natural Gas Act 

B. Public Interest Review for Non-FTA 

Export Authorizations 

C. Judicial Decisions Upholding DOE’s 

Non-FTA Authorizations 

II. DOE’s Prior LNG Export Studies 

A. 2012 EIA and NERA Studies 

(Collectively, the 2012 LNG Export 

Study) 

B. 2014 and 2015 LNG Export Studies 

III. Overview of 2018 LNG Export Study 

IV. 2018 LNG Export Study, 

Macroeconomic Outcomes of Market 

Determined Levels of U.S. LNG Exports 

A. Overview of NERA’s Findings 

B. Methodology and Scenarios 

C. NERA’s Global Natural Gas Model 

(GNGM) 

D. NERA’s NewEra Macroeconomic Model 

E. Results of the 2018 Study 

V. Notice of Availability of the 2018 LNG 

Export Study 

VI. Comments on the 2018 LNG Export 

Study and DOE/FE Responses 

A. Data Input and Estimates of Natural Gas 

Demand 

B. Economic Benefits Associated With LNG 

Exports 

C. Distributional Impacts 

D. Regional Impacts 

E. Estimates of Domestic Natural Gas 

Supply 


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Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67253 

1The authority to regulate the imports and 

exports of natural gas, including liquefied natural 

gas, under section 3 of the NGA (15 U.S.C. 717b) 

has been delegated to the Assistant Secretary for FE 

in Redelegation Order No. 00–006.02 issued on 

November 17, 2014. 

2 15 U.S.C. 717b(c). The United States currently 

has FTAs requiring national treatment for trade in 

natural gas with Australia, Bahrain, Canada, Chile, 

Colombia, Dominican Republic, El Salvador, 

Guatemala, Honduras, Jordan, Mexico, Morocco, 

Nicaragua, Oman, Panama, Peru, Republic of Korea, 

and Singapore. FTAs with Israel and Costa Rica do 

not require national treatment for trade in natural 

gas. 

3 15 U.S.C. 717b(c). 

4Unless otherwise stated, all references to exports 

of LNG herein refer to domestically produced 

natural gas liquefied in the United States. 

Additionally, DOE/FE uses the terms 

‘‘authorization’’ and ‘‘order’’ interchangeably. 

5The Secretary’s authority was established by the 

Department of Energy Organization Act, 42 U.S.C. 

7172, which transferred jurisdiction over imports 

and export authorizations from the Federal Power 

Commission to the Secretary of Energy. 

6 15 U.S.C. 717b(a) (emphasis added). 

7See Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 

189, 203 (DC Cir. 2017) (‘‘We have construed [NGA 

section 3(a)] as containing a ‘general presumption 

favoring [export] authorization.’ ’’) (quoting W. Va. 

Pub. Serv. Comm’n v. U.S. Dep’t of Energy, 681 F.2d 

847, 856 (DC Cir. 1982)). 

8See id. (‘‘there must be ‘an affirmative showing 

of inconsistency with the public interest’ to deny 

the application’’ under NGA section 3(a)) (quoting 

Panhandle Producers & Royalty Owners Ass’n v. 

Econ. Regulatory Admin., 822 F.2d 1105, 1111 (DC 

Cir. 1987)). We note that, as of August 24, 2018, 

qualifying small-scale exports of natural gas to nonFTA countries are treated differently—specifically, 

they are deemed to be consistent with the public 

interest under NGA section 3(a) (10 CFR 590.102(p); 

590.208(a)). See U.S. Dep’t of Energy, Small-Scale 

Natural Gas Exports; Final Rule, 83 FR 35106 (July 

25, 2018). 

9See, e.g., Eagle LNG Partners Jacksonville II LLC, 

DOE/FE Order No. 4078, FE Docket No. 17–79– 

LNG, Opinion and Order Granting Long-Term, 

Multi-Contract Authorization to Export Liquefied 

Natural Gas in ISO Containers Loaded at the Eagle 

Maxville Facility in Jacksonville, Florida, and 

Exported by Vessel to Free Trade Agreement and 

Non-Free Trade Agreement Nations (Sept. 15, 

2017). 

10New Policy Guidelines and Delegations Order 

Relating to Regulation of Imported Natural Gas, 49 

FR 6684 (Feb. 22, 1984) [hereinafter 1984 Policy 

Guidelines]. 

11 Id. at 6685. 

12Phillips Alaska Natural Gas, DOE/FE Order No. 

1473 at 14 (citing Yukon Pacific Corp., DOE/FE 

Order No. 350, Order Granting Authorization to 

Export Liquefied Natural Gas from Alaska, 1 FE 

¶ 70,259, ¶ 71,128 (1989)). 

13 DOE Delegation Order No. 0204–111 at 1; see 

also 1984 Policy Guidelines, 49 FR 6690. In 

February 1989, the Assistant Secretary for Fossil 

Energy assumed the delegated responsibilities of 

the Administrator of the Economic Regulatory 

Administration. 

F. Cost of Environmental Externalities 

G. Natural Gas Price Impacts 

H. Benefits to U.S. Trade Balance 

I. Procedural Arguments 

J. Potential Impact on DOE/FE’s Regulatory 

Process 

VII. Discussion and Conclusions 

I. Background 

A. DOE Export Authorizations Under 

Section 3 of the Natural Gas Act 

DOE is responsible for authorizing 

exports of domestically produced 

natural gas to foreign countries pursuant 

to section 3 of the Natural Gas Act 

(NGA), 15 U.S.C. 717b.1 In relevant part, 

section 3(c) of the NGA applies to 

applications for exports of natural gas, 

including LNG, to countries with which 

the United States has entered into a free 

trade agreement (FTA) requiring 

national treatment for trade in natural 

gas, and with which trade is not 

prohibited by U.S. law or policy (FTA 

countries).2 Section 3(c) was amended 

by section 201 of the Energy Policy Act 

of 1992 (Pub. L. 102–486) to require that 

FTA applications ‘‘shall be deemed to 

be consistent with the public interest’’ 

and granted ‘‘without modification or 

delay.’’ 3 Therefore, DOE/FE approves 

applications for FTA authorizations 

without modification or delay.4 None of 

the comments or discussion herein 

apply to FTA authorizations issued 

under NGA section 3(c). 

For applications to export natural gas 

to non-FTA countries, section 3(a) of the 

NGA sets forth the following standard of 

review: 

[N]o person shall export any natural gas 

from the United States to a foreign country 

or import any natural gas from a foreign 

country without first having secured an order 

of the [Secretary of Energy 5 ] authorizing it 

to do so. The [Secretary] shall issue such 

order upon application, unless after 

opportunity for hearing, [he] finds that the 

proposed exportation or importation will not 

be consistent with the public interest. The 

[Secretary] may by [the Secretary’s] order 

grant such application, in whole or part, with 

such modification and upon such terms and 

conditions as the [Secretary] may find 

necessary or appropriate.6

DOE has consistently interpreted this 

provision as creating a rebuttable 

presumption that a proposed export of 

natural gas to non-FTA countries is in 

the public interest.7 Accordingly, DOE 

conducts an informal adjudication on 

non-FTA applications and will grant 

each application unless DOE finds that 

the proposed exportation will not be 

consistent with the public interest.8

Before reaching a final decision, DOE 

must also comply with the National 

Environmental Policy Act of 1969 

(NEPA), 42 U.S.C. 4321 et seq. 

B. Public Interest Review for Non-FTA 

Export Authorizations 

Although section 3(a) establishes a 

broad public interest standard and a 

presumption favoring export 

authorizations, the statute does not 

define ‘‘public interest’’ or identify 

criteria that must be considered. In prior 

decisions, DOE/FE has identified a 

range of factors that it evaluates when 

reviewing an application to export LNG 

to non-FTA countries. These factors 

include economic impacts, international 

impacts, security of natural gas supply, 

and environmental impacts, among 

others. To conduct this review, DOE/FE 

looks to record evidence developed in 

the application proceeding.9

DOE/FE’s prior decisions have also 

looked to certain principles established 

in its 1984 Policy Guidelines.10 The 

goals of the Policy Guidelines are to 

minimize federal control and 

involvement in energy markets and to 

promote a balanced and mixed energy 

resource system. The Guidelines 

provide: 

The market, not government, should 

determine the price and other contract terms 

of imported [or exported] natural gas . . . . 

The federal government’s primary 

responsibility in authorizing imports [or 

exports] will be to evaluate the need for the 

gas and whether the import [or export] 

arrangement will provide the gas on a 

competitively priced basis for the duration of 

the contract while minimizing regulatory 

impediments to a freely operating market.11

While nominally applicable to natural 

gas import cases, DOE/FE subsequently 

held in Order No. 1473 that the same 

policies should be applied to natural gas 

export applications.12

In Order No. 1473, DOE/FE stated that 

it was guided by DOE Delegation Order 

No. 0204–111. That delegation order, 

which authorized the Administrator of 

the Economic Regulatory 

Administration to exercise the agency’s 

review authority under NGA section 3, 

directed the Administrator to regulate 

exports ‘‘based on a consideration of the 

domestic need for the gas to be exported 

and such other matters as the 

Administrator finds in the 

circumstances of a particular case to be 

appropriate.’’ 13

Although DOE Delegation Order No. 

0204–111 is no longer in effect, DOE/ 

FE’s review of export applications has 

continued to focus on: (i) The domestic 

need for the natural gas proposed to be 

exported, (ii) whether the proposed 

exports pose a threat to the security of 

domestic natural gas supplies, (iii) 

whether the arrangement is consistent 

with DOE/FE’s policy of promoting 

market competition, and (iv) any other 

factors bearing on the public interest 

described herein. Under this public 

interest standard, DOE has issued 30 

final authorizations to export 

domestically produced LNG or 

compressed natural gas (CNG) to nonFTA countries to date, bringing the 


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14See Mexico Pacific Limited LLC, DOE/FE Order 

No. 4312, FE Docket No. 18–70–LNG, Opinion and 

Order Granting Long-Term, Multi-Contract 

Authorization to Export U.S.-Sourced Natural Gas 

by Pipeline to Mexico for Liquefaction and ReExport in the Form of Liquefied Natural Gas to NonFree Trade Agreement Countries, at 37 (Dec. 14, 

2018). 

15Sierra Club vs. U.S. Dep’t of Energy, 867 F.3d 

189 (Aug. 15, 2017) (denying petition of review of 

the LNG export authorization issued to Freeport 

LNG Expansion, L.P., et al.). 

16Sierra Club v. U.S. Dep’t of Energy, Nos. 16– 

1186, 16–1252, 16–1253, 703 Fed. Appx. 1 (D.C. 

Cir. Nov. 1, 2017) (denying petitions of review of 

the LNG export authorization issued to Dominion 

Cove Point LNG, LP; Sabine Pass Liquefaction, LLC; 

and Cheniere Marketing, LLC, et al., respectively). 

17See Sierra Club v. U.S. Dep’t of Energy, No. 16– 

1426, Per Curiam Order (D.C. Cir. Jan. 30, 2018) 

(granting Sierra Club’s unopposed motion for 

voluntarily dismissal). 

18Sierra Club I, 867 F.3d at 203. 

19Sierra Club, 703 Fed. Appx. 1 at *2. 

20 Id. 

21NERA Economic Consulting, Macroeconomic 

Outcomes of Market Determined Levels of U.S. LNG 

Exports (June 7, 2018), available at: https://

www.energy.gov/sites/prod/files/2018/06/f52/ 

Macroeconomic%20LNG%20Export%20Study

%202018.pdf [hereinafter 2018 LNG Export Study]. 

22See 2012 LNG Export Study, 77 FR 73627 (Dec. 

11, 2012), available at: http://energy.gov/sites/prod/ 

files/2013/04/f0/fr_notice_two_part_study.pdf 

(Notice of Availability of the LNG Export Study). 23See, e.g., Freeport LNG Expansion L.P., et al., 

DOE/FE Order No. 3282, FE Docket No. 10–161– 

LNG, Order Conditionally Granting Long-Term, 

Multi-Contract Authorization to Export Liquefied 

Natural Gas by Vessel from the Freeport LNG 

Terminal on Quintana Island, Texas to Non-Free 

Trade Agreement Nations, at 56–109 (May 17, 

2013). 24Because there is no natural gas pipeline 

interconnection between Alaska and the lower 48 

states, DOE/FE generally views those LNG export 

markets as distinct. DOE/FE therefore focuses on 

LNG exports from the lower-48 states for purposes 

of determining macroeconomic impacts. 25See U.S. Dep’t of Energy, Office of Fossil 

Energy, Request for an Update of EIA’s January 

2012 Study of Liquefied Natural Gas Export 

Scenarios, available at: http://energy.gov/fe/ 

downloads/request-update-eia-s-january-2012- 

study-liquefied-natural-gas-export-scenarios (May 

29, 2014) (memorandum from FE to EIA). 26U.S. Energy Information Administration, Effect 

of Increased Levels of Liquefied Natural Gas 

Exports on U.S. Energy Markets (Oct. 2014), 

available at: https://www.eia.gov/analysis/requests/ 

fe/pdf/lng.pdf. 

cumulative total of approved non-FTA 

exports to 23.05 billion cubic feet per 

day (Bcf/d) of natural gas, or 8.41 

trillion cubic feet (Tcf) per year.14 Each 

of these non-FTA orders authorize an 

export term of 20 years, as set forth in 

the orders. 

C. Judicial Decisions Upholding DOE’s 

Non-FTA Authorizations 

Beginning in 2015, Sierra Club 

petitioned the U.S. Court of Appeals for 

the District of Columbia Circuit (D.C. 

Circuit) for review of five long-term 

LNG export authorizations issued by 

DOE/FE under the standard of review 

described above. Sierra Club challenged 

DOE/FE’s approval of LNG exports to 

non-FTA countries from projects 

proposed or operated by the following 

authorization holders: Freeport LNG 

Expansion, L.P., et al.; Dominion Energy 

Cove Point LNG, LP (formerly Dominion 

Cove Point LNG, LP); Sabine Pass 

Liquefaction, LLC; and Cheniere 

Marketing, LLC, et al. The D.C. Circuit 

subsequently denied four of the five 

petitions for review: one in a published 

decision issued on August 15, 2017 

(Sierra Club I),15 and three in a 

consolidated, unpublished opinion 

issued on November 1, 2017 (Sierra 

Club II).16 Sierra Club subsequently 

withdrew its fifth and remaining 

petition for review.17

In Sierra Club I, the D.C. Circuit 

concluded that DOE/FE had complied 

with both NGA section 3(a) and NEPA 

in issuing the challenged non-FTA 

authorization. Freeport LNG Expansion, 

L.P. and its related entities (collectively, 

Freeport) had applied to DOE/FE for 

authorization to export LNG to non-FTA 

countries from the Freeport Terminal 

located on Quintana Island, Texas. 

DOE/FE granted the application in 2014 

in a volume equivalent to 0.4 Bcf/d of 

natural gas, finding that Freeport’s 

proposed exports were in the public 

interest under NGA section 3(a). DOE/ 

FE also considered and disclosed the 

potential environmental impacts of its 

decision under NEPA. Sierra Club 

petitioned for review of the Freeport 

authorization, arguing that DOE fell 

short of its obligations under both the 

NGA and NEPA. The D.C. Circuit 

rejected Sierra Club’s arguments in a 

unanimous decision, holding that, 

‘‘Sierra Club has given us no reason to 

question the Department’s judgment 

that the [Freeport] application is not 

inconsistent with the public interest.’’ 18

In the consolidated opinion in Sierra 

Club II issued on November 1, 2017, the 

D.C. Circuit ruled that ‘‘[t]he court’s 

decision in [Sierra Club I] largely 

governs the resolution of the [three] 

instant cases.’’ 19 Upon its review of the 

remaining ‘‘narrow issues’’ in those 

cases, the Court again rejected Sierra 

Club’s arguments under the NGA and 

NEPA, and upheld DOE/FE’s actions in 

issuing the non-FTA authorizations in 

those proceedings.20

II. DOE’s Prior LNG Export Studies 

The 2018 LNG Export Study 21 builds 

upon four prior studies commissioned 

by DOE to examine the economic 

impacts of U.S. LNG exports. With one 

early exception, DOE/FE has issued the 

30 existing non-FTA authorizations 

based on its consideration of one or 

more of these economic studies under 

NGA section 3(a). These studies are 

summarized below. 

A. 2012 EIA and NERA Studies 

(Collectively, the 2012 LNG Export 

Study) 

In 2011, DOE/FE engaged the U.S. 

Energy Information Administration 

(EIA) and NERA Economic Consulting 

(NERA) to conduct a two-part study of 

the economic impacts of U.S. LNG 

exports, which together was called the 

‘‘2012 LNG Export Study.’’ The first 

part, performed by EIA and originally 

published in January 2012, assessed 

how specified scenarios of increased 

natural gas exports could affect 

domestic energy markets. Specifically, 

EIA examined how prescribed levels of 

natural gas exports (at 6 Bcf/d and 12 

Bcf/d) above baseline cases could affect 

domestic energy markets. 

The second part, performed by NERA 

under contract to DOE, evaluated the 

macroeconomic impact of LNG exports 

on the U.S. economy. NERA used a 

general equilibrium macroeconomic 

model of the U.S. economy with an 

emphasis on the energy sector and 

natural gas in particular. The 2012 

NERA Study projected that, across all 

scenarios studied—assuming either 6 

Bcf/d or 12 Bcf/d of LNG export 

volumes—the United States would 

experience net economic benefits from 

allowing LNG exports. 

In December 2012, DOE/FE published 

a notice of availability of the 2012 LNG 

Export Study in the Federal Register for 

public comment.22 DOE/FE 

subsequently responded to the public 

comments in connection with the LNG 

export proceedings identified in that 

notice.23

B. 2014 and 2015 LNG Export Studies 

By May 2014, in light of the volume 

of LNG exports to non-FTA countries 

then-authorized by DOE/FE and the 

number of non-FTA export applications 

still pending, DOE/FE determined that 

an updated study was warranted to 

consider the economic impacts of 

exporting LNG from the lower-48 states 

to non-FTA countries.24 On May 29, 

2014, DOE announced plans to 

undertake new economic studies to gain 

a better understanding of how 

potentially higher levels of U.S. LNG 

exports—at levels between 12 and 20 

Bcf/d of natural gas—would affect the 

public interest.25

DOE/FE commissioned two new 

macroeconomic studies. The first, Effect 

of Increased Levels of Liquefied Natural 

Gas Exports on U.S. Energy Markets, 

was performed by EIA and published in 

October 2014 (2014 EIA LNG Export 

Study or 2014 Study).26 The 2014 Study 


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Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67255 

27Each Annual Energy Outlook (AEO) presents 

EIA’s long-term projections of energy supply, 

demand, and prices. It is based on results from 

EIA’s National Energy Modeling System (NEMS) 

model. 

28Center for Energy Studies at Rice University 

Baker Institute and Oxford Economics, The 

Macroeconomic Impact of Increasing U.S. LNG 

Exports (Oct. 29, 2015), available at: http://

energy.gov/sites/prod/files/2015/12/f27/20151113_

macro_impact_of_lng_exports_0.pdf. 

29U.S. Dep’t of Energy, Macroeconomic Impacts 

of LNG Exports Studies; Notice of Availability and 

Request for Comments, 80 FR 81300, 81302 (Dec. 

29, 2015). 

30See, e.g., Sabine Pass Liquefaction, LLC, DOE/ 

FE Order No. 3792, FE Docket No. 15–63–LNG, 

Final Opinion and Order Granting Long-Term, 

Multi-Contract Authorization to Export Liquefied 

Natural Gas by Vessel From the Sabine Pass LNG 

Terminal Located in Cameron Parish, Louisiana, to 

Non-Free Trade Agreement Nations, at 66–121 

(Mar. 11, 2016). 

31See U.S. Dep’t of Energy, Study on 

Macroeconomic Outcomes of LNG Exports; Notice 

of Availability of the 2018 LNG Export Study and 

Request for Comments, 83 FR 27314 (June 12, 2018) 

(identifying 25 docket proceedings). 

32Additionally, to date, DOE/FE has authorized a 

cumulative total of LNG exports to FTA countries 

under section 3(c) of the NGA in a volume of 59.33 

Bcf/d from LNG projects. These FTA volumes are 

not additive to the authorized non-FTA volumes. 

33U.S. Energy Info. Admin., Annual Energy 

Outlook 2017 (with projections to 2050) (Jan. 5, 

2017), available at: https://www.eia.gov/outlooks/ 

aeo/pdf/0383(2017).pdf. 

34See 2018 LNG Export Study at 14. 

35 Id. at 17. 

36 Id. at 18. 

37 Id. at 21. 

assessed how specified scenarios of 

increased natural gas exports could 

affect domestic energy markets. At 

DOE’s request, this 2014 Study served 

as an update of EIA’s January 2012 

study of LNG export scenarios and used 

baseline cases from EIA’s Annual 

Energy Outlook 2014 (AEO 2014).27

The second study, The 

Macroeconomic Impact of Increasing 

U.S. LNG Exports, was performed 

jointly by the Center for Energy Studies 

at Rice University’s Baker Institute and 

Oxford Economics under contract to 

DOE/FE (together, Rice-Oxford) and 

published in October 2015 (2015 LNG 

Export Study or 2015 Study).28 The 

2015 Study is a scenario-based 

assessment of the macroeconomic 

impact of levels of U.S. LNG exports, 

sourced from the lower-48 states, under 

different assumptions including U.S. 

resource endowment, U.S. natural gas 

demand, international LNG market 

dynamics, and other factors. The 2015 

Study considers export volumes ranging 

from 12 to 20 Bcf/d of natural gas, as 

well as a high resource recovery case 

examining export volumes up to 28 Bcf/ 

d of natural gas. The analysis covers the 

2015 to 2040 time period. 

In December 2015, DOE/FE published 

a Notice of Availability of the 2014 and 

2015 LNG Export Studies in the Federal 

Register, and invited public comment 

on those Studies.29 DOE/FE 

subsequently responded to the public 

comments in connection with the LNG 

export proceedings identified in that 

notice.30

III. Overview of 2018 LNG Export 

Study 

At the time DOE commissioned the 

2018 LNG Export Study earlier this year, 

DOE/FE had 25 pending applications 

requesting authorization to export 

domestically produced LNG to non-FTA 

countries.31 In light of both the 

cumulative volume of exports to nonFTA countries authorized at that time 

(equivalent to 21.35 Bcf/d of natural gas) 

and the additional volume of LNG 

requested for export in those pending 

applications, DOE/FE determined that a 

new macroeconomic study was 

warranted.32 Accordingly, DOE/FE, 

through its support contractor KeyLogic 

Systems, Inc., commissioned NERA to 

conduct the 2018 LNG Export Study. 

Like the four prior economic studies, 

the 2018 LNG Export Study examines 

the impacts of varying levels of LNG 

exports on domestic energy markets. As 

explained below, the 2018 LNG Export 

Study assesses different levels of 

‘‘unconstrained’’ LNG exports (defined 

as market-determined levels of exports), 

and analyzes the outcomes of different 

LNG export levels on the U.S. natural 

gas markets and the U.S. economy as a 

whole, over the 2020 to 2050 time 

period. As part of this analysis, DOE/FE 

directed NERA to examine the 

likelihood of conditions leading to 

various export scenarios, making it the 

first DOE macroeconomic study to 

squarely address this issue. 

To summarize, the 2018 LNG Export 

Study differs from DOE/FE’s prior 

economic studies in the following ways: 

(i) Includes a larger number of 

scenarios (54 scenarios) to capture a 

wider range of uncertainty in four 

natural gas market conditions than 

examined in the previous studies; 

(ii) Includes LNG exports in all 54 

scenarios that are market-determined 

levels, including the three alternative 

baseline scenarios that are based on the 

projections in EIA’s Annual Energy 

Outlook 2017 (AEO 2017);33

(iii) Examines unconstrained LNG 

export volumes beyond the levels 

examined in the previous studies; 

(iv) Examines the likelihood of those 

market-determined LNG export 

volumes; and 

(v) Provides macroeconomic 

projections associated with several of 

the scenarios lying within the more 

likely range. 

IV. 2018 LNG Export Study, 

Macroeconomic Outcomes of Market 

Determined Levels of U.S. LNG Exports 

A. Overview of NERA’s Findings 

NERA’s key findings in the 2018 

Study include the following: 

• The more likely range of LNG 

exports in the year 2040 was judged to 

range from 8.7 to 30.7 Bcf/d of natural 

gas. This assessment was based on a 

probabilistic analysis of 54 different 

scenarios constructed for the Study.34

• U.S. natural gas prices range from 

$5 to approximately $6.50 per million 

British thermal unit (MMBtu) in 2040 

(in constant 2016 dollars) under 

Reference case supply assumptions. 

These central cases have a combined 

probability of 47%.35

• Levels of gross domestic product 

(GDP) are most sensitive to assumptions 

about U.S. supply of natural gas, with 

high supply driving higher levels of 

GDP. For each of the supply scenarios, 

higher levels of LNG exports in response 

to international demand consistently 

lead to higher levels of GDP. GDP 

achieved with the highest level of LNG 

exports in each group exceeds GDP with 

the lowest level of LNG exports by $13 

to $72 billion in 2040 (in constant 2016 

dollars).36

• About 80% of the increase in LNG 

exports is satisfied by increased U.S. 

production of natural gas, with positive 

effects on labor income, output, and 

profits in the natural gas production 

sector.37

• Chemical industry subsectors of the 

economy that rely heavily on natural gas 

for energy and as a feedstock continue 

to exhibit robust growth even at higher 

LNG export levels. This growth is only 

insignificantly slower than cases with 

lower LNG export levels. 

• Even the most extreme scenarios of 

high LNG exports outside the more 

likely probability range (exhibiting a 

combined probability of less than 3%) 

show higher overall economic 

performance in terms of GDP, 

household income, and consumer 

welfare than lower export levels 

associated with the same domestic 

supply scenarios. 

B. Methodology and Scenarios 

The 2018 Study develops 54 scenarios 

by identifying various assumptions for 

domestic and international supply and 

demand conditions to capture a wide 

range of uncertainty in the natural gas 

markets. The scenarios include three 


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38See id. at 12; see also supra at note 33. 

39 2018 LNG Export Study at 25. 

40 Id. at 25–26, 28; see also AEO 2017 at 12, 16. 

41 2018 LNG Export Study at 26. 

42 Id. at 29–30. 

43 Id. at 30. 

44 Id. at 37. 

45 Id. at 43. 

46 Id. 

baseline cases based on EIA’s AEO 2017 

projections (the most recent EIA 

projections available at the time), with 

varying assumptions about U.S. natural 

gas supply.38 Alternative scenarios add 

other assumptions about both future 

U.S. and international demand for 

natural gas. International assumptions 

are based on EIA’s International Energy 

Outlook 2017 (IEO 2017) and the 

International Energy Agency’s (IEA) 

World Energy Outlook 2016 (WEO 

2016). 

As noted above, the 2018 Study also 

examines the likelihood of conditions 

leading to various export scenarios. 

Specifically, the 2018 Study includes 

peer-reviewed probabilities of 

uncertainties surrounding developments 

in the international and domestic 

natural gas markets that were, in turn, 

combined to develop the 54 export 

scenarios and their associated 

macroeconomic impacts. 

1. Scenarios 

a. U.S. Natural Gas Supply 

The amount of natural gas that can be 

supplied at a given price depends on a 

number of factors, including how 

extraction technology develops, the 

magnitude of the extractable resource, 

political positions for or against limits 

on unconventional natural gas resource 

development (i.e., hydraulic fracturing), 

as well as the cost to develop natural gas 

resources.39 The 2018 Study specifies 

three different cases for U.S. natural gas 

supply derived from EIA’s AEO 2017: 

i. AEO 2017’s Reference case provides 

a central estimate of U.S. natural gas 

production; 

ii. High Oil and Gas Resource and 

Technology (HOGR) case provides more 

optimistic resource development 

estimates than the Reference case; and 

iii. Low Oil and Gas Resource and 

Technology (LOGR) case provides less 

optimistic resource development 

estimates than the Reference case. 

The differences in the natural gas 

production levels across these three 

cases arise from varying assumptions 

around unproven offshore resources, 

onshore shale gas resources, tight gas 

resources, and conventional and tight 

oil associated gas resources, as well as 

the costs of producing these resources.40

b. U.S. Natural Gas Demand 

The 2018 Study notes that U.S. 

natural gas demand is primarily 

influenced by economic growth, 

population growth, per capita income, 

and environmental policies that 

influence fuel choices among sources of 

energy and total demand for energy.41

The 2018 Study specifies three different 

cases for U.S. natural gas demand: 

i. AEO 2017’s Reference case, which 

provides a central estimate of U.S. 

natural gas demand; 

ii. A Robust Economic Growth case, 

which provides a high estimate for U.S. 

natural gas demand driven by higher 

levels of gross domestic product growth; 

and 

iii. A Renewables Mandate case, 

which provides a low estimate for U.S. 

natural gas demand driven by the 

imposition of a stringent renewables 

mandate. 

c. Rest of World Natural Gas Supply 

The 2018 Study considers two cases 

for international natural gas supply: 

i. IEO 2017’s Reference case; and 

ii. A Low Supply case, which was 

created by reducing the IEO 2017 

Reference case natural gas production 

consistent with supply reductions in the 

LOGR case for U.S. supply.42

d. Rest of World Natural Gas Demand 

NERA notes that there are relatively 

few global natural gas forecasts that 

provide a range of scenarios that would 

allow NERA to isolate drivers of global 

natural gas demand outside the United 

States.43 NERA identifies two such 

forecasts as EIA’s IEO 2017 and IEA’s 

WEO 2016. The 2018 Study considers 

three cases for international natural gas 

demand: 

i. IEO 2017’s Reference case; 

ii. WEO 2016’s Current Policies 

scenario, which provided a high 

estimate for international natural gas 

demand; and 

iii. WEO 2016’s 450 parts per million 

(ppm) case, which provides a low 

estimate for international natural gas 

demand based on policies with the 

objective of limiting the average global 

temperature increase in 2100 to 2 

degrees Celsius above pre-industrial 

levels. 

2. Probability Assignments 

A key feature of the 2018 Study is to 

provide not only quantification of the 

effects to the U.S. natural gas market 

and its overall economy under each of 

the scenarios outlined, but also an 

assessment of the probability of each of 

these scenarios, and thus the probability 

of the natural gas and macroeconomic 

outcomes associated with each. 

NERA first developed estimates of the 

probabilities for the level of U.S. supply 

and demand, as well as supply and 

demand in the rest of the world.44 DOE/ 

FE and its support contractor KeyLogic, 

Inc. contacted a set of independent 

experts recommended by DOE 

(hereinafter the peer reviewers) to 

obtain their probability assignments for 

these same four metrics. After receiving 

feedback from the peer reviewers, NERA 

reevaluated the original probability 

assignments to arrive at the final 

probabilities. 

a. U.S. Supply Case Probabilities and 

Ranges 

The peer reviewers did not converge 

on common recommendations for U.S. 

supply case probabilities and ranges. 

One peer reviewer suggested focusing 

the probabilities more towards the 

Reference case by reducing the 

prominence of both the high and low 

cases.45 Another peer reviewer 

recommended reducing the probability 

for the Reference case and increasing 

the probabilities for both the high and 

low cases. Several other peer reviewers 

agreed with the original assignment of 

probabilities. According to NERA, there 

did not appear to be a consensus on 

how to change the proposed 

probabilities. The recommendations 

from the peer reviewers seemed either 

to offset each other or to agree with the 

original probabilities. For this reason, 

NERA decided to retain the original 

probability assignments. NERA made no 

change to its original range of U.S. 

supply values or the probabilities 

assigned to them. 

b. U.S. Demand Scenario Probabilities 

and Ranges 

In evaluating NERA’s U.S. demand 

scenario probabilities and ranges, the 

peer reviewers did not have a consistent 

theme in their recommendations. One 

peer reviewer recommended greater 

emphasis on the Reference case, while 

another recommended deemphasizing 

the Reference case to increase the 

importance of the high and low cases.46

Two other peer reviewers recommended 

that NERA retain the probability 

assignments with no changes. Because 

the recommendations lacked a common 

theme but nevertheless seemed to offset 

each other, NERA retained the original 

probability assignments and made no 

changes to the original range of U.S. 

Demand. 


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47 2018 LNG Export Study at 43–44 (Table 3). 

48 Id. at 33. 

49 Id. 

50 Id. at 34. 

c. Rest of World Supply Scenario 

Probabilities and Ranges 

In evaluating the Rest of World 

supply scenarios, NERA noted several 

common themes from the peer 

reviewers. Several of the peer reviewers 

felt the proposed probabilities were 

reasonable. Another peer reviewer 

recommended assigning greater 

probability to the Reference case. No 

peer reviewer recommended that the 

low case receive more emphasis. As a 

result, the probability of the Reference 

case was increased by 5% while 

reducing the probability of the low case 

by the same amount. NERA made no 

changes to the original range of Rest of 

World Supply. 

d. Rest of World Demand Scenario 

Probabilities and Ranges 

In evaluating the Rest of World 

demand scenarios, NERA noted 

common agreement on several themes. 

None of the peer reviewers 

recommended increasing the probability 

of the low world demand case. Several 

of the peer reviewers agreed that the 

Reference case should receive greater 

importance, with the high case receiving 

less importance. The peer reviewers 

disagreed on the degree to which the 

relative importance should be modified. 

In addition, the peer reviewers felt that 

the high end of the range for Rest of 

World demand should be increased to a 

level double the original differential 

between the reference and high cases. 

Based on the peer review 

recommendations, the high end of the 

range was increased as recommended by 

one peer reviewer. Overall, the high 

case probability was decreased to 50%, 

the Reference case probability was 

increased to 45%, and the low case 

stayed at a probability of 5%. 

Table 1 below presents the final 

probability assignments after peer 

review and the central estimate of the 

ranges adopted for the analysis.47

TABLE 1—FINAL PROBABILITY ASSIGNMENTS AND CENTRAL SUPPLY/DEMAND ESTIMATES (TRILLIONS OF CUBIC FEET) FOR

EACH CASE IN 2040 

U.S. supply U.S. demand ROW supply ROW demand 

Case .................................................................... AEO 2017, 

HOGR 

Robust 

Economic 

Growth 

........................ WEO 

High ............................... Estimate ............................................................... 49 39 ........................ 172 

Probability ............................................................ 30% 17% ........................ 50% 

Case .................................................................... AEO 2017, 

Reference 

AEO 2017, 

Reference 

IEO 2017, 

Reference 

IEO 2017, 

Reference 

Reference ...................... Estimate ............................................................... 39 33 139 145 

Probability ............................................................ 55% 66% 80% 45% 

Case .................................................................... AEO 2017, 

LOGR 

Renewables 

Mandate 

Low Supply WEO 2016, 

450 ppm 

Low ................................ Estimate ............................................................... 28 27 90 113 

Probability ............................................................ 15% 17% 20% 5% 

C. NERA’s Global Natural Gas Model 

(GNGM) 

The 2018 Study used the GNGM, 

which NERA describes as a worldwide 

model of the natural gas market based 

on LNG trade, interregional pipelines, 

and regional supply and demand.48 This 

model allows NERA to examine the 

likely direct and indirect impacts on 

regional natural gas markets of various 

industry developments and policy 

choices. Using the GNGM, NERA can 

take into account developments in 

individual regions and gauge regionspecific market outcomes. 

The GNGM’s structure has full 

flexibility in terms of the time periods 

and regions it covers. For the 2018 

Study, the model divides the world into 

18 regions and solves for equilibrium 

natural gas flows, supply, and demand 

for the years 2020 to 2040 in five-year 

time steps.49 The model can be adapted 

to analyze any individual region in the 

world, as well as to consider a more 

granular time scale. The regional 

structure allows the model to factor in 

key components driving the natural gas 

market, including pipeline and marine 

linkages among regions, competition 

among supplier regions, and 

competition between LNG and natural 

gas pipelines. 

D. NERA’s NewERA Macroeconomic 

Model 

NERA developed the NewERA model 

to forecast the impact of policy, 

regulatory, and economic factors on the 

energy sector and the economy as a 

whole. To evaluate policies that have 

significant impacts on the entire U.S. 

economy, NERA uses the NewERA 

model to capture the effects as they 

ripple through all sectors of the 

economy and the associated feedback 

effects. The version of the NewERA 

model used for the 2018 Study includes 

a macroeconomic model that represents 

all sectors of the economy. 

The macroeconomic model 

incorporates all production sectors, 

including liquefaction plants required 

for LNG exports; energy extraction; 

manufacturing and service sectors; and 

final demand for goods and services by 

households, the government, and for 

investment.50 The consequences of 

changes in LNG exports are transmitted 

throughout the U.S. economy as sectors 

respond until the economy reaches 

equilibrium. Producers and households 

are able to change their demand for 

goods and services in response to 

changes in prices. 

The NewERA model addresses the key 

factors affecting future U.S. natural gas 

demand, supply, and price. One of the 

major uncertainties is the availability of 

shale gas in the United States. To 

account for this uncertainty and the 

effect it could have on domestic 

markets, the NewERA model includes 

resource supply curves for U.S. natural 

gas. The model also accounts for 

pipeline trade in natural gas with 

Mexico and Canada, and the potential 

build-up of liquefaction plants for 

exporting LNG. The NewERA model also 

has a supply (demand) curve for U.S. 

imports (exports) that represents how 


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51 Id. 

52 2018 LNG Export Study at 47. 

53 Id. 

54 Id. at 49–50. 

55 2018 LNG Export Study at 50–51 (Table 4). 

56 Id. at 54; see also id. at 53 (Figure 12). 

57 Id. at 53 (Table 12). 

58 Id. at 54. 

59 Id. at 55 (discussing Figure 12). 

the global LNG market price would react 

to changes in U.S. imports or exports.51

U.S. wellhead natural gas prices in 

the NewERA model are matched to the 

resulting prices from the GNGM. The 

baselines for the NewERA model are 

based on EIA’s AEO 2017 Reference, 

High Oil and Gas Supply, and Low Oil 

and Gas Supply cases. 

E. Results of the 2018 Study 

The 54 scenarios in the 2018 Study 

provide a wide range of results. NERA 

chose to focus on a subset of more likely 

outcomes, given DOE’s assumptions 

about the probabilities associated with 

U.S. natural gas production, demand 

and supply, and demand for natural gas 

in the rest of the world. NERA defined 

the more likely outcomes as those that 

result in U.S. LNG exports that are 

within a one standard deviation of the 

mean level of exports.52 In the Study, 

NERA stated that an interval of plus or 

minus one standard deviation was 

chosen as more informative because it 

indicates a reasonable range of 

uncertainty without unduly 

emphasizing very unlikely outcomes.53

The 2018 Study finds that, by the year 

2040, there is a 16% chance that U.S. 

LNG exports will be below 9.0 Bcf/d 

and a 16% chance that they will be 

above 30.7 Bcf/d of natural gas.54 Put 

differently, there is approximately a 

68% probability that U.S. LNG exports 

will be between 9.0 and 30.7 Bcf/d in 

2040. Table 2 below lists 27 scenarios 

that are the ‘‘more likely’’ scenarios in 

2040 (i.e., within one standard deviation 

of the mean for all 54 scenarios).55 The 

scenario nomenclature in Table 2 refers 

to the case used for U.S. natural gas 

supply, U.S. natural gas demand, Rest of 

World natural gas supply, and Rest of 

World natural gas demand, respectively. 

TABLE 2—LNG EXPORTS AND SCENARIO PROBABILITY FOR THE MORE LIKELY SCENARIOS IN 2040 

Scenario LNG exports 

Bcf/day 

Scenario 

probability 

(%) 

Low_High_Low_High ................................................................................................................................................ 22.7 0.3 

Low_Low_Low_High ................................................................................................................................................ 26.1 0.3 

Low_Low_Low_Ref .................................................................................................................................................. 12.4 0.2 

Low_Ref_Low_High ................................................................................................................................................. 23.4 1.0 

Low_Ref_Low_Ref ................................................................................................................................................... 9.9 0.9 

Ref_High_Low_Low ................................................................................................................................................. 15.5 0.1 

Ref_High_Low_Ref .................................................................................................................................................. 28.9 0.8 

Ref_High_Ref_High .................................................................................................................................................. 23.4 3.7 

Ref_High_Ref_Ref ................................................................................................................................................... 12.4 3.4 

Ref_Low_Low_Low .................................................................................................................................................. 18.3 0.1 

Ref_Low_Low_Ref ................................................................................................................................................... 30.5 0.8 

Ref_Low_Ref_High .................................................................................................................................................. 25.7 3.7 

Ref_Low_Ref_Ref .................................................................................................................................................... 18.6 3.4 

Ref_Ref_Low_Low ................................................................................................................................................... 17.0 0.4 

Ref_Ref_Low_Ref .................................................................................................................................................... 29.6 3.3 

Ref_Ref_Ref_High ................................................................................................................................................... 24.0 14.5 

Ref_Ref_Ref_Ref ..................................................................................................................................................... 12.9 13.1 

High_High_Low_Low ................................................................................................................................................ 22.2 0.1 

High_High_Ref_High ................................................................................................................................................ 30.1 2.0 

High_High_Ref_Low ................................................................................................................................................. 8.7 0.2 

High_High_Ref_Ref .................................................................................................................................................. 22.6 1.8 

High_Low_Low_Low ................................................................................................................................................ 23.6 0.1 

High_Low_Ref_Low ................................................................................................................................................. 12.4 0.2 

High_Low_Ref_Ref .................................................................................................................................................. 23.6 1.8 

High_Ref_Low_Low ................................................................................................................................................. 22.8 0.2 

High_Ref_Ref_High .................................................................................................................................................. 30.7 7.9 

High_Ref_Ref_Low .................................................................................................................................................. 9.0 0.8 

High_Ref_Ref_Ref ................................................................................................................................................... 23.3 7.1 

The 2018 Study summarized changes 

in Henry Hub prices in 2040 (in 

constant 2016 dollars) by the different 

U.S. natural gas supply scenarios, as 

follows: 

• For all of the reference U.S. supply 

scenarios in the more likely range, 

Henry Hub natural gas prices could be 

from $5 to $6.50 per million British 

thermal units (MMBtu) in 2040. These 

mid-range scenarios have a combined 

probability of 47%.56

• For all of the HOGR supply 

scenarios in the more likely range, 

Henry Hub prices range from $3.50 to $4 

per MMBtu in 2040.57 These scenarios 

with natural gas prices at the low end 

of the range have a combined 

probability of 22%.58

• For all of the LOGR supply 

scenarios in the more likely range, 

Henry Hub prices range from $10 to $13 

per MMBtu in 2040. These scenarios 

with natural gas prices at the high end 

of the range have a combined 

probability of 3%. 

The 2018 Study finds two important 

relationships between U.S. LNG exports 

and U.S. natural gas prices: 

• ‘‘Increasing U.S. LNG exports under 

any given set of assumptions about U.S. 

natural gas resources and their 

production leads to only small increases 

in U.S. natural gas prices;’’ 59 and 

• ‘‘Available natural gas resources 

have the largest impact on natural gas 

prices. Therefore, U.S. natural gas prices 

are far more dependent on available 

resources and technologies to extract 


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60 Id. 

61 2018 LNG Export Study at 55; see also id. at 

56 (Figure 13). 

62 Id. at 62. 

63 Id. at 63 (Table 9). 

64See id. at 67; see also id. at 66 (Figure 16), 67 

(Table 10). 

65 2018 LNG Export Study at 18. 

66 Id. at 70. 

67 Id. 

68 Id. at 73. 

available resources than on U.S. policies 

surrounding LNG exports.’’ 60

Applying the same one-standard 

deviation interval of a probability 

greater than 16% and less than 84% 

reveals that the more likely range of 

Henry Hub price is from $3.90 to $6.70 

per MMBtu of natural gas.61

The 2018 Study identifies 12 

representative scenarios for 

macroeconomic analysis. The 12 

scenarios include three different 

baselines and nine alternative shock 

scenarios (three per baseline).62 The 

scenarios are grouped according to the 

outlook for U.S. natural gas supply, as 

described previously: Reference, HOGR, 

and LOGR cases. All of the nine 

alternative NewERA scenarios project 

LNG export levels that are higher than 

their corresponding reference scenario. 

This selection of scenarios allows the 

analysis to capture the macroeconomic 

effects of higher LNG exports associated 

with higher levels of demand for U.S. 

LNG exports from the rest of the world. 

However, not all of the scenarios 

evaluated produce LNG export levels 

that fall within a one-standard deviation 

interval around the mean of modeled 

LNG export volumes (the ‘‘more likely’’ 

range). Therefore, the 2018 Study 

discusses the macroeconomic effects for 

the seven macroeconomic scenarios that 

do fall within the range of more likely 

scenarios, as shown in bold in Table 

3: 63

TABLE 3—MACROECONOMIC SCENARIOS

U.S. supply U.S. demand ROW supply ROW demand 

LNG 

exports 

(Bcf/day) 

Cumulative 

probability 

(%) 

Ref .............. Ref .............. Ref .............. Ref .............. 12.9 33 

Ref .............. Ref .............. Low ............. Ref .............. 29.6 76 

Ref ............... Ref ............... Low ............. High ............. 45.7 96 

Ref .............. Ref .............. Ref .............. High ............ 24.0 68 

High ............ Ref .............. Ref .............. Ref .............. 23.3 47 

High ............. Ref ............... Low ............. Ref ............... 40.4 91 

High ............. Ref ............... Low ............. High ............. 52.8 99 

High ............ Ref .............. Ref .............. High ............ 30.7 87 

Low .............. Ref .............. Ref ............... Ref ............... 0.1 5 

Low ............. Ref .............. Low ............. Ref .............. 9.9 16 

Low ............. Ref .............. Low ............. High ............ 23.4 48 

Low .............. Ref .............. Ref ............... High ............. 8.2 11 

Finally, the 2018 Study summarizes a 

number of the broad macroeconomic 

effects on the U.S. economy of increased 

LNG exports, as discussed below. 

1. U.S. Consumer Well-Being Increases 

With Rising LNG Exports 

For the more likely scenarios, 

consumer welfare ranges from $30.25 

trillion to $30.26 trillion (a variation of 

$10 billion).64 As U.S. LNG exports 

increase, U.S. households receive 

additional income from two sources. 

First, the LNG exports provide 

additional export revenues, and second, 

households that hold shares in 

companies that own liquefaction plants 

receive additional income from take-orpay tolling charges for LNG exports. 

These additional sources of income for 

U.S. consumers outweigh the income 

loss associated with higher energy 

prices. 

2. Total Economic Activity Expands 

With Rising LNG Exports 

Gross domestic product (GDP), or the 

level of total economic activity in the 

economy, is another economic metric 

that is often used to evaluate the effect 

of a change to the economy. The GDP 

effects associated with higher LNG 

exports increase as the economy 

benefits from investment in the 

liquefaction process, export revenues, 

resource income, and additional wealth 

transfers (in the form of tolling charges). 

The impact of LNG exports results in 

shifts in income between different 

sources, but overall GDP improves as 

LNG exports increase for all scenarios 

with the same U.S. natural gas supply 

conditions. 

Levels of GDP are most sensitive to 

assumptions about U.S. supply, with 

high natural gas supply driving higher 

levels of GDP. For each of the supply 

scenarios, higher levels of LNG exports 

in response to international demand 

consistently lead to higher levels of 

GDP. GDP achieved with the highest 

level of LNG exports in each group 

exceeds GDP with the lowest level of 

LNG exports by $13 to $72 billion in 

2040 (in constant 2016 dollars).65

3. Sectoral Growth Rates Change 

Negligibly for Key Economic Sectors 

and Energy-Intensive Sectors 

Sectoral growth rates remain robust 

for all of the sectors that rely on natural 

gas as fuel and raw material input. The 

variation in the growth rates attributable 

to differences in LNG exports ranges 

from one to seven basis points (0.01% 

to 0.07%). Even for the scenario with 

the largest change in sectoral growth 

rates, the change is still relatively 

small.66 According to NERA, it is 

reasonable to conclude that an increased 

level of LNG exports will have a 

negligible effect on how quickly these 

sectors grow.67

4. Household Income Shifts Between 

Different Sources But Is Positive Overall 

When comparing changes in resource 

income between the baseline and the 

scenarios, resource income associated 

with natural gas significantly increases. 

This is because both the value of the 

natural gas resource, as well as returns 

to specialized capital and labor, increase 

when additional LNG exports are 

allowed.68 Value-added income (wage 

and capital income) also increases 

because of the increased opportunity for 

exports and the resulting boost to labor 

income, profits, and GDP. 

At the same time, the resource income 

associated with coal and crude oil 

changes minimally. Therefore, the total 

change in resource income is positive 

for the scenarios, and the changes in 


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69 Id. at 73. 

70We noted that, in the narrative section of the 

2018 Study on this point, there is a typo in the 

Reference case number. See 2018 LNG Export Study 

at 75 (‘‘Under the Reference U.S. natural gas supply 

scenario, Ref_Ref_Ref_Ref, aggregate consumption 

is $24,049 billion and LNG exports are 12.9 Bcf/ 

d.’’). The $24,049 billion number is actually 

$25,049, as shown in the corresponding Table 14. 

See id. at 76. 

71 2018 LNG Export Study at 75. 

72 Id. at 77. 

73 Id. at 78 and Figure 21. 

74See U.S. Dep’t of Energy, Study on 

Macroeconomic Outcomes of LNG Exports; Notice 

of Availability of the 2018 LNG Export Study and 

Request for Comments, 83 FR 27314 (June 12, 

2018). 

75 Id. at 27315. 

76 Id. at 27316 (noting that ‘‘[w]hile this invitation 

to comment covers a broad range of issues, DOE 

may disregard comments that are not germane to 

the present inquiry.’’). 

77Supporting comments were filed by the 

Marcellus Shale Coalition; the Center for Liquefied 

Natural Gas (CLNG); the Pennsylvania Chamber of 

Business and Industry; the American Petroleum 

Institute (API); Cheniere Energy, Inc. (Cheniere); 

Jordan Cove Energy Project L.P. (JCEP); LNG Allies; 

NextDecade Corp.; and Anonymous. The 

Anonymous comment is comprised of five 

comments filed by the same anonymous author. 

78Opposing comments were filed by Patricia 

Weber; Oil Change International; Food & Water 

Watch; Industrial Energy Consumers of America 

(IECA); Oregon Wild; Sierra Club; Deb Evans and 

Ron Schaaf (the Evans Schaaf Family); and Jody 

McCaffree (individually and as executive director of 

Citizens for Renewables/Citizens Against LNG). Oil 

Change International and Food & Water Watch filed 

identical comments. 

79Comment of John Young. 

80Comment of Vincent Burke. 

81See, e.g., Public Citizen v. F.A.A., 988 F.2d 186, 

197 (D.C. Cir. 1993). 

82Comment of Cheniere at 3. 

83Comment of JCEP at 3. 

84U.S. Energy Info. Admin., Annual Energy 

Outlook 2018 (with projections to 2050) (Feb. 6, 

2018), available at: https://www.eia.gov/outlooks/ 

aeo/pdf/AEO2018.pdf. 

resource income increase with the level 

of LNG exports. Income associated with 

net transfers includes government 

transfers and all tolling charges on LNG 

exports. Government transfers remain 

the same between the baseline and 

scenarios, so the net transfer reflects the 

additional wealth transfer. Changes in 

tax revenue are ‘‘grossed up’’ in value 

added.69

5. Aggregate Consumption and 

Investment Is Higher 

Aggregate consumption measures the 

total spending on goods and services in 

the economy. Within each U.S. natural 

gas supply scenario, aggregate 

consumption is higher when LNG 

exports are higher. 

As with the welfare and GDP results, 

wealth transfer associated with LNG 

exports increases household income 

which, in turn, leads to higher spending 

on goods and services. Under the 

Reference U.S. natural gas supply 

scenario, aggregate consumption is 

$25,049 billion and LNG exports are 

12.9 Bcf/d. When LNG exports increase 

as a result of natural gas demand pull, 

aggregate consumption is $25,054 

billion (for 29.6 Bcf/d), an increase of 

about $5 billion.70 A similar pattern is 

observed in the outcomes for aggregate 

consumption in each of the groups of 

scenarios based on alternative U.S. 

natural gas supply assumptions.71

6. U.S. LNG Exports Are Backed by 

Increased Natural Gas Production 

The results from NERA’s analysis 

indicate there is no support for the 

concern that LNG exports would come 

at the expense of domestic natural gas 

consumption. To the contrary, a large 

share of the increase in LNG exports is 

supported by an increase in domestic 

natural gas production, leading to a 

modest increase in natural gas prices 

and additional income from export 

revenues.72 About 80% of the increase 

in LNG exports is satisfied by increased 

domestic production of natural gas, with 

positive effects on labor income, output, 

and profits in the natural gas production 

sector. 

In the Reference U.S. supply 

scenarios, as total natural gas exports 

increase from 5.8 Tcf (in the Ref_Ref_

Ref_Ref scenario) to 12.9 Tcf (in the Ref_

Ref_Low_Ref scenario), natural gas 

production increases for the 

corresponding scenarios from 37.7 Tcf 

to 43.9 Tcf, respectively, in 2040.73

V. Notice of Availability of the 2018 

LNG Export Study 

On June 12, 2018, DOE published 

notice of availability (NOA) of the 2018 

LNG Export Study and a request for 

comments.74 The purpose of the NOA 

was ‘‘to enter the 2018 LNG Export 

Study into the administrative record of 

the 25 pending non-FTA export 

proceedings [identified in the NOA] and 

to invite comments on the Study for use 

in the pending and future non-FTA 

application proceedings.’’ 75 DOE 

provided the following instructions: 

Comments must be limited to the 

methodology, results, and conclusions of the 

2018 LNG Export Study on the factors 

evaluated. These factors include the potential 

impact of LNG exports on domestic energy 

consumption, production, and prices; the 

macroeconomic factors identified in the 

Study, including gross domestic product, 

consumption, U.S. economic sector analysis, 

and U.S. LNG export feasibility analysis; and 

any other factors included in the Study. In 

addition, comments may be directed toward 

the feasibility of various scenarios used in 

the Study.76

Publication of the NOA began a 45-day 

public comment period that ended on 

July 27, 2018. 

DOE received 19 comments on the 

2018 LNG Export Study from a variety 

of sources, including participants in the 

natural gas industry, environmental 

organizations, and individuals. Of those, 

nine comments supported the Study,77

eight comments opposed the 2018 Study 

and/or exports of LNG,78 one comment 

took no position,79 and one comment 

was non-responsive.80 The NOA and 

comments received on the NOA are 

available on DOE’s website at https://

fossil.energy.gov/app/docketindex/ 

docket/index/10. 

VI. Comments on the 2018 LNG Export 

Study and DOE/FE Response 

DOE has evaluated the comments 

received during the public comment 

period. Below, DOE/FE summarizes: (i) 

The pertinent arguments by topic, with 

reference to representative comments, 

and (ii) DOE/FE’s basis for the 

conclusions that it drew in reviewing 

those comments. In so doing, DOE/FE 

has responded to the relevant and 

significant issues raised by the 

commenters.81

A. Data Inputs and Estimates of Natural 

Gas Demand 

1. Comments 

Every commenter supporting the 2018 

LNG Export Study expresses support for 

NERA’s study design. For example, 

Cheniere states that the 2018 Study’s 

‘‘refined approach’’ is well-suited to the 

present context, in which DOE/FE has 

approved non-FTA exports in a volume 

(at the time of Cheniere’s filing) up to 

21.35 Bcf/d, with more non-FTA 

applications pending.82 The 

commenters point out that the study 

design—with 54 different scenarios 

reflecting a range of market 

uncertainties and market-determined 

levels of export volumes—differs from 

past studies that were based on 

prescribed LNG export volumes. JCEP 

states that the 2018 Study takes the 

‘‘next logical step’’ in studying 

unbounded exports driven by market 

demand.83 For this reason, commenters 

including LNG Allies and API 

characterize the 2018 Study as the most 

comprehensive of DOE’s export studies 

to date. 

LNG Allies observes that the 2018 

Study uses data from AEO 2017 for its 

analysis, but notes that the projections 

in EIA’s Annual Energy Outlook 2018 

(AEO 2018) 84 indicate ‘‘significantly 

lower natural gas prices in the United 

States in the future, as well as 

considerably higher U.S. natural gas 

production under all scenarios (versus 


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85Comment of LNG Allies at 2. 

86 Id. (emphasis in original). 

87Comment of JCEP at 3. 

88 Id. 

89Comment of Oregon Wild at 1. 

90 Id. 

91Comment of Sierra Club at 1. 

92Comments of Oil Change International and 

Food & Water Watch at 1. 

93 Id. at 2 (citing 2018 LNG Export Study at 42). 

94 2018 LNG Export Study at 41–42. 

95Comment of the Evans Schaaf Family at 1. 

96 2018 LNG Export Study at 30; see also id. at 

41 (explaining that the ‘‘lowest natural gas demand 

is obtained from a scenario in which the IEA 

assumes that every country adopts policies 

sufficient to keep global greenhouse gas 

concentrations under 450 ppm CO2e.’’). 

97 Id. at 41. 

98Comments of Oil Change International and 

Food & Water Watch at 2. 

99 Id. 

100 Id. 

101 Id. 

102Comments of Sierra Club at 1 (emphasis in 

original). 

103 Id. (citing 2018 LNG Export Study at 41–43) 

(NERA explaining that ‘‘we assign . . . the highest 

Continued 

AEO 2017).’’ 85 LNG Allies asserts that, 

had it been possible for the 2018 Study 

to draw upon EIA’s most recent data in 

AEO 2018, the evidence supporting 

market-determined levels of U.S. LNG 

exports would have been ‘‘even more 

persuasive.’’ 86

JCEP also endorses the 2018 Study’s 

design as ‘‘appropriate and important 

given the state of the U.S. LNG export 

market to date.’’ 87 Specifically, JCEP 

notes that some LNG export projects 

have received authorizations from the 

Federal Energy Regulatory Commission 

(FERC) and DOE, but have not yet 

moved forward on construction or may 

never move forward. In JCEP’s view, 

these ‘‘stalled’’ projects should not 

prevent other projects from obtaining 

export authorizations through artificial 

limits on approved export volumes. 

Therefore, JCEP asserts, the 2018 Study 

correctly evaluated LNG exports limited 

only by market demand, not by 

regulatory constraints imposed by 

DOE.88

On the other hand, several 

commenters—including Sierra Club, 

Oregon Wild, and the Industrial Energy 

Consumers of America (IECA)— 

challenge the scope of the 2018 Study 

and the data used as inputs. 

Specifically, these commenters assert 

that the 2018 Study relies on inaccurate 

assumptions that fail to reflect 

conditions that adversely affect (and 

will continue to affect) the viability of 

U.S. LNG exports. 

First, Oregon Wild states that the U.S. 

market for fossil fuels is deeply flawed. 

According to Oregon Wild, the current 

prices for natural gas do not reflect 

either the full costs of production or 

significant externalities (e.g., global 

climate change and ocean acidification), 

and thus are artificially low. Low prices 

for LNG, in turn, result in artificially 

high demand and supply that ‘‘far 

exceeds’’ optimal levels.89

Consequently, Oregon Wild states that 

increasing exports of U.S. LNG ‘‘will 

increase the supply of a commodity that 

is already oversupplied at a global 

scale.’’ 90

Commenters including Oil Change 

International, Food & Water Watch, and 

Sierra Club assert that the 2018 Study is 

based on flawed projections of global 

demand for natural gas. Sierra Club 

argues that the 2018 Study ‘‘drastically 

overstates’’ global demand, which 

‘‘significantly skews’’ the 2018 Study’s 

overall analysis and conclusions.91 Oil 

Change International, Food & Water 

Watch, and other commenters also 

allege the following deficiencies in 

NERA’s study design: 

• Fails to account for the negative 

impacts of increased natural gas 

production and related infrastructure; 

• Fails to consider shifts in anti-fossil 

fuel energy policies at the state level 

that will impact U.S. supplies; 

• Fails to acknowledge the transition 

to renewable energy and storage (i.e., 

flexible generation technologies) that 

compete with natural gas globally, as 

well as efforts in the United States to 

build out renewable energy sources and 

increase energy efficiency; 

• Improperly relies on ‘‘projected 

diminishing Rest of World’’ natural gas 

supplies; 

• Fails to properly account for 

economic costs related to environmental 

issues, particularly the costs associated 

with climate change; and 

• Fails to account for international 

efforts to address climate change and/or 

assumes that such efforts will fail, 

which allegedly will impact global 

demand for natural gas.92

Addressing the climate change 

argument, Oil Change International and 

Food & Water Watch first challenge the 

statement in the 2018 Study that 

‘‘ ‘NERA [has] followed the development 

of international agreements on climate 

change for many years, and we do not 

expect that future progress will be very 

much greater than in the past.’ ’’ 93 On 

this basis, NERA attributed a ‘‘low 

probability’’—specifically, a 5% 

probability—to the ‘‘low international 

demand case’’ for the rest of the world 

(ROW), in which international demand 

for natural gas is reduced due to policies 

to address climate change.94

The Evans Schaaf Family submitted a 

comment challenging NERA’s 

assumption, asserting that ‘‘[t]he most 

glaring of [NERA’s] predictions is that 

there is a mere 5% probability that the 

[Rest of World] would meet the 450 

ppm [parts per million] of CO2e [carbon 

dioxide equivalent] as set forth in the 

Paris Climate Agreement.’’ 95 The 450 

ppm case assumes a set of policies with 

the objective of limiting the average 

global temperature increase in 2100 to 2 

degrees Celsius above pre-industrial 

levels.96 NERA noted that, ‘‘[t]o achieve 

this concentration, it is necessary to 

phase out all fossil fuel use including 

natural gas over the course of the next 

century.’’ 97 Oil Change International 

and Food & Water Watch contend, 

however, that NERA ‘‘provide[d] no 

scientific reasoning for attributing a 5% 

probability to international gas demand 

levels that align with the . . . 450 ppm 

Scenario.’’ 98

Oil Change International and Food & 

Water Watch also state that the 2018 

Study should have given much greater 

emphasis to low natural gas demand 

scenarios that align with the Paris 

Agreement.99 In their view, rather than 

NERA adopting a ‘‘subjective and 

cynical’’ view towards international 

climate negotiations, a 

‘‘methodologically sound approach 

would be to project the level of U.S. 

LNG exports that align with global 

success in meeting the Paris goals.’’ 100

They point out that the Paris Agreement 

has been ratified by more than 170 

nations, with the United States being 

the only country to back away from the 

Agreement. 

According to the commenters, this 

approach would show a much lower 

global demand for U.S. LNG exports by 

the middle of this century, indicating a 

very different trajectory to any of those 

described in the 2018 Study. They claim 

that, by attributing a low probability to 

the likelihood that demand for U.S. 

natural gas will be reduced in light of 

climate policies, the 2018 Study is 

‘‘predicated on a failure to prevent 

catastrophic climate impacts.’’ 101

Similarly, Sierra Club asserts that the 

2018 Study overstates global natural gas 

demand, and thus market support for 

U.S. LNG exports, ‘‘by assuming that the 

most likely [demand] scenario is for the 

rest of the world to take no further 

action to limit greenhouse gas 

emissions.’’ 102 Specifically, Sierra Club 

disputes NERA’s judgment that the high 

demand case—assigned a 65% 

probability—should assume that 2016 is 

the last year in which the global 

community undertakes any effort to 

limit greenhouse gas emissions, i.e., that 

no further action is taken between 2018 

and 2040.103 In Sierra Club’s view, ‘‘this 


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probability to the WEO Current Policies case that 

assumes no additional actions to limit emissions 

[after 2016].’’). 

104 Id. 

105Comments of Oil Change International and 

Food & Water Watch at 3 n.4 (citation omitted). 

106 Id. at 3. 

107Comment of Patricia Weber at 1 (quoting 2018 

LNG Export Study at 34 n.34) (NERA stating that, 

‘‘[i]n the NewERA model, it is possible to represent 

these variations in domestic versus foreign 

ownership of assets and capture export revenues to 

better understand the issues. However, this study 

does not investigate these issues.’’). 

108 Id. 

109 2018 LNG Export Study at 56 n.48. 

110Comment of Jody McCaffree at 2 (emphasis in 

original) (citing International Gas Union, 2017 

World LNG Report, at 4–5) (attached as Exh. 1 to 

McCaffree Comment). 

111 Id. 

112 2018 LNG Export Study at 67. 

113See AEO 2018, supra note 84. 

scenario might represent a useful 

hypothetical ‘ceiling’ on global natural 

gas demand,’’ but the 2018 Study does 

not demonstrate that it is plausible, 

much less the ‘‘most likely’’ scenario.104

Turning to renewable energy, Oil 

Change International and Food & Water 

Watch cite recent analysis from 

Bloomberg New Energy Finance, the 

New Energy Outlook 2018.105 They 

argue that this Bloomberg analysis 

projects a very different picture of future 

energy demand than assumed in the 

2018 Study. For example, they argue 

that, by 2050, renewable energy will 

make up over two-thirds of global power 

generation, while fossil energy will have 

declined to 29% from 63% today.106

Citing these and other projections, the 

commenters argue that there will be 

substantial constraints on growth in the 

demand for U.S. LNG. The commenters 

argue that, without these adjustments, 

the 2018 Study exaggerates both the 

potential for U.S. LNG exports and the 

related macroeconomic benefits. 

Patricia Weber and other commenters 

express concern about NERA’s 

statement that the 2018 Study ‘‘ ‘does 

not investigate’ ’’ the variations in 

domestic versus foreign ownership of 

assets as part of its NewEra model.107 Ms. 

Weber questions why NERA did not 

consider the implications for the U.S. 

economy of a foreign-owned pipeline 

exporting U.S. LNG through a foreignowned facility. She cites JCEP’s pending 

LNG export project, in which the 

proposed Jordan Cove Energy Project 

and associated Pacific Connector Gas 

Pipeline would be owned by a Canadian 

corporation.108

Similarly, Ms. Weber and the Evans 

Schaaf Family question whether the 

2018 Study excludes Canadian (or 

Mexican) natural gas supply as a factor. 

In their view, since NERA states that 

‘‘countries in the North American region 

share a single natural gas market,’’ 109

any macroeconomic benefits associated 

with LNG exports should be applied 

across North America, and not assumed 

to accrue only to the United States, as 

the 2018 Study suggests. 

Finally, some commenters, including 

Ms. Weber and Jody McCaffree, dispute 

the 2018 Study’s conclusions regarding 

international levels of U.S. LNG exports. 

They suggest that the current volumes of 

LNG exports across the world (not only 

U.S. LNG) are already excessive and 

will result in a global oversupply. Citing 

a 2017 report by the International Gas 

Union, Ms. McCaffree warns that ‘‘it 

would take 15 years . . . until the 

current excess of LNG volumes would 

likely be absorbed into the international 

LNG export markets.’’ 110 Ms. Weber 

also questions whether the 2018 Study 

considers any potential macroeconomic 

impacts if the infrastructure created 

from increased LNG exports exceeds the 

bounds of what the market demands— 

for example, if the LNG industry 

‘‘overbuilds’’ two to three times more 

export capacity than ultimately 

needed.111

2. DOE/FE Response 

The 2018 Study considered 54 

different scenarios of LNG exports from 

the United States over the coming 

decades. Different assumptions 

regarding future supply and demand 

conditions provided a wide range of 

possible outcomes for further 

macroeconomic analysis. Through a 

peer-reviewed process, the 2018 Study 

assigned probabilities for each of the 

supply and demand cases, which, when 

combined, provided likelihoods for the 

scenarios. This approach allowed NERA 

to consider very unlikely scenarios for 

U.S. LNG exports—with export levels 

much lower and much higher than the 

Reference case—thus providing a more 

comprehensive range of outcomes than 

considered in DOE’s previous LNG 

export studies. The 2018 Study found a 

‘‘positive correlation between GDP and 

LNG exports for the more likely 

scenarios in 2040,’’ such that ‘‘[i]n all 

scenarios with common assumptions 

about U.S. natural gas supply and 

demand, there is greater gain in GDP as 

the LNG export volume increases.’’ 112

We take note of EIA’s projections in 

AEO 2018, published on February 6, 

2018, for natural gas supply, demand, 

and prices.113 One commenter noted the 

lower domestic natural gas prices and 

higher domestic natural gas production 

projected in AEO 2018 than in the 

projections from AEO 2017 used in the 

2018 Study. Projected Reference case 

domestic dry natural gas production for 

the year 2040 increased by 2.41 Tcf 

between AEO 2017 and AEO 2018 (from 

37.74 Tcf to 40.15 Tcf, respectively). 

The Henry Hub price in 2040 declined 

from $5.18 per million British thermal 

units (MMBtu) in the AEO 2017 

projections to $4.50/MMBtu in the AEO 

2018 projections (both prices in 

constant 2017 dollars). Reference case 

LNG exports in the year 2040 increased 

from the 2017 to 2018 projections by 

0.92 Tcf (from 4.44 Tcf to 5.36 Tcf). As 

described here, the AEO 2018 Reference 

case, even more so than AEO 2017, 

projects robust domestic supply 

conditions that are more than adequate 

to meet domestic needs and supply 

exports. 

Several commenters suggested the 

2018 LNG Export Study overstates the 

future level of U.S. LNG exports, as well 

as the probability of those levels of 

exports occurring. DOE/FE 

commissioned the 2018 Study to inform 

its public interest analysis of pending 

long-term applications to export LNG to 

non-FTA countries beyond the 21.35 

Bcf/d of exports already approved at 

that time. To develop scenarios with 

much larger volumes of exports than 

under Reference case conditions, the 

2018 Study performers examined 

unconstrained cases and assigned 

probabilities to help illustrate the 

likelihood of LNG export levels much 

lower and much higher than the 

Reference case. The macroeconomic 

analysis of the export scenarios provides 

valuable input to inform DOE/FE’s 

public interest analysis. The 2018 Study 

does not (and was not intended to) 

provide an analysis of any ‘‘optimal’’ 

level of LNG exports based on different 

policy objectives. Further, the 2018 

Study Reference case rate of exports in 

2040 (‘‘Ref_Ref_Ref_Ref’’) is in the range 

of LNG exports projected in AEO 2018 

for the same time period—12.9 Bcf/d in 

the 2018 Study, compared to 14.7 Bcf/ 

d in AEO 2018. 

If increased global demand for U.S. 

LNG exports does not materialize, as 

some commenters suggest, there would 

be no corresponding incremental 

domestic supply or price impact since 

additional LNG exports would not 

occur, irrespective of regulatory 

approvals. As some commenters point 

out, multiple proposed projects have 

received full approval for their export 

facilities from FERC and DOE, yet they 

have neither made a final investment 

decision nor begun construction. Given 

the significant capital costs of 

liquefaction and export facilities, project 

developers in the United States 

typically must demonstrate long-term 


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114Comment of Cheniere at 1. 

115 Id. 

116See FE LNG Monthly, Dec. 2018, and LNG 

Annual 2016, 2017, available at: https://

www.energy.gov/fe/listings/lng-reports; see also 

Comment of NextDecade Corp. at 9; Comment of 

API at 2. Additionally, we note that Dominion 

Energy Cove Point LNG, LP (DECP) commenced 

LNG exports on March 2, 2018. To date, DECP has 

exported 36 LNG cargoes from its terminal in 

Lusby, Maryland (both long-term and short-term 

exports), with deliveries to 13 countries and regions 

worldwide. 

117See Comment of Cheniere at 2. 

118See id. 

119See id. 

120 Id. 

121Comment of API at 2. 

122Comment of Pennsylvania Chamber of 

Business and Industry at 1–2; see infra at § VI.G. 

123LNG exports of 186,841 million cubic feet 

(MMcf) in 2016 * $4.71/thousand cubic feet (Mcf) 

+ LNG exports of 707,542 MMcf in 2017 * $4.69/ 

Mcf + LNG exports of 852,368 MMcf from Jan.–Oct. 

2018 at $4.90/Mcf, as reported in EIA’s Natural Gas 

Monthly (Nov. 2018), available at: https://www.eia.

gov/naturalgas/monthly/pdf/table_05.pdf (Table 5, 

U.S. natural gas exports, 2016–2018) and FE LNG 

Monthly, Dec. 2018, available at: https://

www.energy.gov/fe/listings/lng-reports. 

124Cheniere, LNG Allies, and API identify other 

studies examining LNG exports by authors 

including the Brookings Institution, Deloitte, IHS, 

IHS Energy, ICF International, and API. 

125Comment of Cheniere at 2–3 & nn.6–10 

(citations omitted); Comment of JCEP at 3; 

Comment of API at 2. 

126Comment of API at 3. 

demand for their projects through the 

execution of long-term contracts to raise 

the needed capital to finance their 

projects. DOE/FE also notes that current 

large-scale liquefaction capacity in 

operation or under construction in the 

United States today equals 

approximately 11 Bcf/d of exports, 

which is more than 3 Bcf/d below the 

AEO 2018 Reference case rate of LNG 

exports projected in 2040. 

B. Economic Benefits Associated With 

LNG Exports 

1. Economic Benefits Realized to Date 

a. Comments 

Cheniere states that it agrees with the 

results of the 2018 LNG Export Study, 

and emphasizes that, ‘‘for Cheniere, the 

positive economic impacts of LNG 

exports are not just a matter of economic 

theory.’’ 114 In the years since DOE/FE 

published its first LNG export study, 

Cheniere—through its subsidiary, 

Sabine Pass Liquefaction, LLC—has 

constructed and launched operations at 

the Sabine Pass Liquefaction Project, 

located at the Sabine Pass LNG 

Terminal in Cameron Parish, Louisiana. 

Cheniere states that it has constructed 

four liquefaction trains at the Sabine 

Pass LNG Terminal, and is in the 

process of commencing exports from a 

fifth train.115 DOE/FE (as well as the 

Anonymous commenter) notes that 

Cheniere began exporting U.S. LNG 

from the Sabine Pass LNG Terminal on 

February 24, 2016, and, to date, has 

exported 501 LNG cargoes from Sabine 

Pass (both long-term and short-term 

exports) with deliveries to 29 countries 

and regions worldwide.116 Cheniere 

states that, through other subsidiaries, it 

is also in the process of constructing 

three liquefaction trains at the Corpus 

Christi LNG Terminal in San Patricio 

County, Texas. 

According to Cheniere, these two LNG 

export projects have created 

approximately 9,000 direct construction 

jobs at peak construction over a period 

of several years, as well as more than 

1,000 permanent, full-time jobs.117

Cheniere asserts that the construction 

and operation of both the Sabine Pass 

and Corpus Christi Liquefaction Projects 

have generated, and will continue to 

generate, tens of thousands of indirect 

jobs across the United States. Cheniere 

states that, to date, it has sourced 

natural gas for the Sabine Pass 

Liquefaction Project from dozens of 

producers located in Texas, Louisiana, 

Arkansas, Pennsylvania, Ohio, West 

Virginia, Oklahoma, Illinois, and 

Kentucky. Cheniere maintains that jobs 

have been created due to the demand its 

LNG export operations have created for 

natural gas infrastructure—including in 

the steel industry and in other segments 

of the natural gas supply chain.118

In this regard, Cheniere states that 

liquefaction projects require a wide 

variety of manufactured parts and 

components, many of which can be 

sourced from domestic manufacturers. 

Cheniere states that, to date, its LNG 

facilities have procured components 

from 1,590 U.S. manufacturers in 46 

states.119 In sum, Cheniere maintains 

that, ‘‘through its procurement of 

domestic natural gas and across its 

manufacturing supply chain,’’ it ‘‘has 

seen first-hand the broad economic 

benefits of LNG exports to the American 

economy.’’ 120

The American Petroleum Institute 

(API) agrees that the results of the 2018 

LNG Export Study ‘‘are consistent with 

U.S. LNG experience to date.’’ 121

Specifically, API states that U.S. LNG 

cargoes commenced in early 2016, yet 

the impact on domestic prices of natural 

gas has been negligible. Likewise, the 

Pennsylvania Chamber of Business and 

Industry states that concerns about 

significant increases in natural gas 

prices occurring after DOE/FE began 

authorizing LNG exports have not been 

borne out.122

b. DOE/FE Response 

The 2018 Study did not attempt to 

quantify the macroeconomic impacts or 

other direct and indirect effects of LNG 

exports since February 2016. 

Nonetheless, to provide one estimate of 

the current value of U.S. LNG exports, 

DOE/FE points to the quantity and price 

of U.S. LNG exported to date, as 

reported by DOE/FE export 

authorization holders. Since initial 

exports began from the lower-48 states 

in February 2016, a cumulative volume 

of over 1.7 trillion cubic feet of natural 

gas has been exported through October 

2018, and the corresponding volumeweighted prices for the same period 

yield a value of over $7.9 billion.123

Additionally, as noted previously, since 

U.S. LNG exports from the lower-48 

states began, the projected Henry Hub 

price in 2040 has decreased from AEO 

2017 to AEO 2018, which is a function 

of the size of domestic natural gas 

supply to meet both domestic and 

export demand. 

2. Macroeconomic Benefits Under 

DOE’s Studies to Date 

a. Comments 

Several commenters point out that the 

2018 LNG Export Study builds on both 

DOE’s prior macroeconomic studies and 

several studies conducted by other 

authors in reaffirming the economic 

benefits of LNG exports.124 Cheniere 

notes that, even before the 2018 Study, 

DOE/FE had already developed a large 

body of analysis demonstrating the 

substantial macroeconomic benefits of 

LNG exports to the United States. 

Cheniere, JCEP, and API state that 

DOE’s four prior studies were varied in 

their methodology, but they all confirm 

the same fundamental conclusion: LNG 

exports are a clear net benefit to the U.S. 

economy and are therefore in the public 

interest.125 The commenters maintain 

that the conclusions of the 2018 LNG 

Export Study—especially when 

considered along with DOE’s prior LNG 

studies—should put to rest any 

lingering concerns that increased U.S. 

LNG exports are not in the public 

interest. According to API, ‘‘[i]t should 

now be abundantly clear that U.S. LNG 

offers sizable benefits to U.S. 

consumers, workers, and the economy 

overall.’’ 126

b. DOE/FE Response 

DOE’s prior LNG export studies (the 

2012, 2014, and 2015 LNG Export 

Studies) consistently have projected 

positive economic benefits from 

increased levels of U.S. LNG exports, as 

measured by GDP. 


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127Comment of IECA at 3. 

128See, e.g., Comment of Cheniere at 5 (quoting 

2018 LNG Export Study at 67–68). 

129Comment of JCEP at 4 (citing 2018 LNG Export 

Study at 77). 

130Comment of NextDecade Corp. at 11 (quoting 

2018 LNG Export Study at 49). 131 Id. (quoting 2018 LNG Export Study at 68). 132 2018 LNG Export Study at 68. 133 Id. at 65. 134 Id. at 66–67. 135 Id. at 73–74. 

136 Id. at 76. 

137 Id. at 67. 

138 IECA states that its members in EITE sectors 

represent industries including: Chemicals, plastics, 

steel, iron ore, aluminum, paper, food processing, 

fertilizer, insulation, glass, industrial gases, 

building products, automotive, independent oil 

refining, and cement. See Comment of IECA at 2. 

139 Id. 

140 Id. 

141 Id. 

142 Id. 

C. Distributional Impacts 

1. Gross Domestic Product (GDP) 

a. Comments 

Some commenters, including IECA, 

Sierra Club, and the Evans Schaaf 

Family, allege that any macroeconomic 

benefits from the 2018 LNG Export 

Study are likely overstated. These 

commenters allege that, in concluding 

that LNG exports would create a net 

benefit to the economy, the 2018 Study 

relied too heavily on the fact that 

exports will increase GDP while failing 

to give adequate weight to projected 

domestic natural gas price increases, as 

well as to negative socio-economic, 

sectoral, and regional impacts. IECA 

also disagrees with the fact that the 2018 

Study emphasizes the national net 

economic benefits of LNG exports. IECA 

charges that this focus is not consistent 

with the U.S. Supreme Court’s 

definition of ‘‘public interest,’’ which it 

claims is intended to focus on ‘‘impacts 

to people, not GDP.’’ 127

Other commenters—including the 

Marcellus Shale Coalition, API, CLNG, 

NextDecade Corp., and the Anonymous 

commenter—assert that LNG exports 

will provide macroeconomic benefits to 

the United States. These commenters 

point out that, across a wide range of 

scenarios, the 2018 Study found that 

LNG exports will provide a net benefit 

to the U.S. economy and will allow for 

continued economic growth. JCEP and 

Cheniere emphasize the 2018 Study’s 

conclusion that ‘‘ ‘there is greater gain in 

GDP as the LNG export volume 

increases.’ ’’128 Specifically, as 

commenters point out, the 2018 Study 

demonstrates that GDP grows as LNG 

exports increase because the U.S. 

economy benefits from investment in 

liquefaction facilities, export revenues, 

income from the upstream and 

midstream natural gas industry, and 

tolling charges generated by the LNG 

export facilities. JCEP emphasizes that 

these increases in GDP result, in part, 

from the fact that exports of LNG will 

not result in decreased domestic 

consumption of natural gas. Rather, 

LNG exports will be in addition to, not 

in place of, domestic uses of natural 

gas.129

NextDecade acknowledges the 2018 

Study’s conclusion that ‘‘there is 

virtually no chance’’ that non-FTA LNG 

exports will reach the 55.04 Bcf/d level 

in aggregate volumes for which DOE 

had approved and/or received 

applications by 2040 (as of the date of 

the Study).130 Nonetheless, NextDecade 

points out that, regardless of the volume 

of LNG ultimately exported, the 2018 

Study found that LNG exports are in the 

public interest. For this reason, 

NextDecade asserts that the market, not 

DOE, should decide which of the 

pending LNG export projects will meet 

global market demand. NextDecade 

further notes the 2018 Study’s finding 

that ‘‘ ‘any restrictions on LNG exports 

would forgo the additional GDP to be 

gained by allowing exports to respond 

to market conditions.’ ’’ 131 In sum, these 

commenters support NERA’s conclusion 

that allowing the market to determine 

the level of U.S. LNG exports will ‘‘lead 

to an increase in overall economic 

activity leading to higher GDP.’’ 132

b. DOE/FE Response 

The 2018 Study measured the broad 

macroeconomic effects on the U.S. 

economy through several metrics, 

including ‘‘the wellbeing of the average 

U.S. consumer, total household income 

from all sources, economy-wide 

investment, output effects on key 

manufacturing sectors, and gross 

domestic product (GDP).’’ 133 With 

respect to consumer well-being, the 

2018 Study found that all scenarios 

within the more likely range of results 

are welfare-improving for the average 

U.S. household. This result is driven by 

households’ receipt of additional 

income from export revenues and takeor-pay tolling charges for LNG exports, 

and this additional income outweighs 

the income lost from higher energy 

prices.134

In terms of total household income, 

the 2018 Study considered two broad 

categories of income sources: Resource 

income and value-added income. The 

resource income reflects the value of the 

natural gas resource as well as returns 

to specialized capital and labor. The 

value-added income is a measure of 

labor income and capital income. In the 

2018 Study, both resource income and 

value-added income increase as LNG 

exports increase for given domestic 

natural gas supply assumptions across 

the more likely scenarios examined.135

In terms of economy-wide investment, 

the 2018 Study shows higher levels of 

aggregate investment for higher levels of 

LNG exports. Within the natural gas 

sector, additional investments take 

place to expand natural gas production 

and to build liquefaction capacity. 

Overall aggregate investment also grows 

with capacity increases in industries 

that supply machinery and equipment 

that make up the overall natural gas 

value chain.136

Finally, in terms of GDP, as noted 

previously, the 2018 Study found a 

‘‘positive correlation between GDP and 

LNG exports for the more likely 

scenarios in 2040.’’ 137

2. Sectoral Impacts 

a. Comments 

Some commenters, including IECA, 

Jody McCaffree, and the Evans Schaaf 

Family, debate whether LNG exports 

will impact the domestic energyintensive, trade-exposed (EITE) sectors 

disproportionately, at too high a cost to 

the U.S. economy to justify exporting 

LNG.138 Specifically, IECA asserts that 

increasing U.S. LNG exports reduces the 

cost of natural gas to global competitors 

and simultaneously increases the 

domestic cost of natural gas and 

electricity—creating a ‘‘double negative 

impact’’ on EITE industries.139

According to these commenters, these 

price impacts will lead to lost jobs and 

lower wages in the EITE sectors, while 

also making it more difficult for the U.S. 

to compete globally, invest capital, and 

create high-paying middle class jobs. 

According to IECA, the oil and natural 

gas industry employed 512,000 jobs in 

2017, whereas the manufacturing sector 

currently employs 12,713,000 jobs.140

Of the approximately 12.7 million 

manufacturing jobs, approximately 

5,125,600 jobs in the EITE industries 

would be most affected by LNG 

exports.141 IECA cautions that if DOE 

‘‘approves too many export terminals 

and natural gas prices rise,’’ DOE will be 

putting ‘‘at risk trillions of dollars of 

manufacturing assets and over 12.7 

million jobs.’’ 142 In light of the various 

alleged flaws in the 2018 Study 

identified by IECA and discussed 

herein, IECA maintains that the 2018 

Study overinflates economic growth and 

job projections attributed to LNG 

exports. 

Other commenters, including CLNG 

and API, dispute these arguments. They 

disagree with the notion that an LNG 


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143Comment of CLNG at 4 & n.17 (citing Energy 

Ventures Analysis, Inc., 2017–2018 Winter Outlook 

for Natural Gas, 2017). 

144See id. at 4. 

145Comment of NextDecade Corp. at 5. 

146Comment of CLNG at 4. 

147Comment of API at 2–3. 

148Comment of CLNG at 4. 

149 Id. (citing Energy Ventures Analysis, Inc., 

2017–2018 Winter Outlook for Natural Gas, 2017). 

150 Id. at 4. 

151See, e.g., Golden Pass Products LLC, DOE/FE 

Order No. 3978, FE Docket No. 12–156–LNG, 

Opinion and Order Granting Long-Term, MultiContract Authorization to Export Liquefied Natural 

Gas by Vessel from the Golden Pass LNG Terminal 

Located in Jefferson County, Texas, to Non-Free 

Trade Agreement Nations, at 77–80 (Apr. 25, 2017). 

152 2018 LNG Export Study at 70. 

153 Id. 

154See infra § I.B. 

155Comment of Sierra Club at 2 (quoting 2018 

LNG Export Study at 64). 

156 Id. 

157Comment of IECA at 3. 

export industry cannot co-exist with a 

growing domestic manufacturing base. 

They emphasize the size and 

productivity of the U.S. natural gas 

resource base, contending that there is 

an abundance of natural gas to support 

both LNG export demand and continued 

growth in the EITE industries. 

CLNG argues that the ‘‘dramatic 

increase’’ in natural gas supply has 

enabled an industrial renaissance in the 

U.S. manufacturing sector, with demand 

for natural gas from the manufacturing 

sector reaching an all-time high this past 

winter.143 According to CLNG, growth 

in LNG exports sends market signals to 

incentivize domestic production of 

natural gas. This increased production 

benefits U.S. consumers, as well as 

industries involved in the natural gas 

supply chain (such as construction and 

manufacturing)—spurring more 

economic growth.144 NextDecade 

similarly asserts that, under the 2018 

Study’s most likely scenarios, industries 

that rely on natural gas for fuel and as 

a raw material input will maintain 

strong growth, even if LNG exports 

increase.145

Additionally, API argues that the 

economic benefits of increased natural 

gas use extend to the industrial sector— 

including through the increased 

production of associated natural gas 

liquids (NGLs), which must be extracted 

before natural gas is liquefied for export. 

CLNG and API maintain that growth in 

NGLs creates a competitive advantage 

for U.S. chemical manufacturers and 

leads to greater investment, industry 

growth, and new jobs.146 API contends 

that NGLs ‘‘have bolstered the U.S. 

petrochemical sector and fostered a 

renaissance in U.S. manufacturing,’’ 

underscoring the value of U.S. LNG at 

home and abroad.147

Next, CLNG argues that companies 

from around the world are investing in 

new projects to build or expand their 

‘‘shale-advantaged capacity’’ in the 

United States. CLNG states that, 

between 2010 and 2015, 48 new 

industrial projects in the petrochemical, 

fertilizer, steel, and natural gas-toliquids sectors were completed, 

representing an investment of $28 

billion.148 According to CLNG, experts 

forecast additional industrial 

investment of $135 billion to build 59 

new projects and 11 expansions 

between 2017 and 2022.149

In sum, CLNG cautions that 

suppressing LNG exports will limit 

production of natural gas which, in 

turn, will limit both: (i) Overall 

economic benefits to the domestic 

economy, and (ii) the opportunity for 

the United States to continue growing 

its manufacturing sectors that benefit 

from increased supplies of natural 

gas.150

b. DOE/FE Response 

With respect to the argument that 

natural gas confers greater value on the 

U.S. economy when used in 

manufacturing than when produced for 

export, DOE observes that more natural 

gas is likely to be produced 

domestically if LNG exports are 

authorized than if they are prohibited. 

There is no one-for-one trade-off 

between natural gas used in 

manufacturing and natural gas diverted 

for export. These observations are 

consistent with DOE/FE’s analysis of 

similar arguments made in response to 

its prior macroeconomic studies.151 The 

competition between the demand for 

natural gas for domestic consumption 

and the demand for natural gas for 

export is captured in the modelling for 

the 2018 Study. In scenarios with 

increased levels of U.S. LNG exports 

with common domestic natural gas 

supply assumptions, the 2018 Study 

found that greater economic benefits, in 

terms of GDP, accrued to the U.S. 

economy due to those exports. 

Contrary to IECA’s concerns about the 

negative impacts to EITE industries 

potentially caused by increased LNG 

exports, the 2018 Study found: ‘‘All 

negatively affected sectors, and in 

particular the natural gas intensive 

sectors, continue to grow robustly at 

higher levels of LNG exports, albeit at 

slightly lower rates of increase than they 

would at lower levels.’’ 152 The 2018 

Study further found that, ‘‘[s]ectoral 

growths rates remain robust for all of the 

sectors that rely on natural gas as fuel 

and raw material input,’’ with ‘‘[t]he 

variation in the growth rates attributable 

to differences in LNG exports ranges 

from one to seven basis points (0.01% 

to 0.07%).’’ 153 Based on these findings 

(which no commenters attempt to 

rebut), we are not persuaded by IECA’s 

claim that DOE’s approval of LNG 

exports will put trillions of dollars of 

U.S. manufacturing assets and millions 

of jobs at risk, among other alleged 

negative impacts. 

With respect to the argument that 

some industries derive greater economic 

value from natural gas than others, 

DOE/FE continues to be guided by the 

long-standing principle established in 

the 1984 Policy Guidelines that resource 

allocation decisions of this nature are 

better left to the market, rather than to 

DOE, to resolve.154

3. Consumer Welfare 

a. Comments 

Sierra Club, IECA, the Evans Schaaf 

Family, and other commenters maintain 

that the positive macroeconomic 

benefits of LNG exports will not accrue 

to most U.S. citizens. They contend that 

the 2018 Study acknowledges both the 

positive and negative effects associated 

with LNG exports, but glosses over the 

fact that these positive and negative 

effects are not equally or evenly 

distributed.155 According to these 

commenters, exports of LNG will harm 

all Americans by increasing natural gas 

prices, and thus most Americans will 

not share in any benefits associated with 

LNG exports. 

Sierra Club and IECA argue that the 

main beneficiaries of LNG exports will 

be a very small fraction of the U.S 

population—namely, American 

households that own stock in natural 

gas production and export companies. 

Sierra Club claims that the 2018 Study 

‘‘simply asserts’’ that households in 

general own the LNG production 

processes and industries, without 

providing any analysis of which 

households own this stock or how the 

benefits and harms of exports will be 

distributed among the American 

public.156 These commenters argue that, 

without such analysis, DOE cannot 

conclude that LNG exports are in the 

public interest. IECA adds that a future 

revenue stream from LNG exports 

cannot predict the level of dividends 

paid out to shareholders or whether a 

share price will rise—and alleges that 

NERA did not disclose the economics 

behind this claim.157

Additionally, IECA argues that the 

2018 Study points to a second economic 

benefit of LNG exports that will offset 

household economic losses due to 


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158 Id. 159Comment of NextDecade Corp. at 5. 160 Id. 161Comment of JCEP at 5 (citing 2018 LNG Export 

Study at 64–65). 162 2018 LNG Export Study at 64. 163 Id. 

164 Id. at 64–65. 

165 Id. at 66–67. 

166See Sierra Club v. U.S. Dep’t of Energy, Nos. 

16–1186, 16–1252, 16–1253, 703 Fed. Appx. 1, at 

*3 (DC Cir. Nov. 1, 2017) (Sierra Club II), discussed 

infra at § I.C. 

167 Id. (emphasis added, internal quotations 

omitted, and alteration in original). 

168 Id. 

169Comment of Marcellus Shale Coalition at 1– 

2. 

170Comment of Jody McCaffree at 4. 

171Comment of CLNG at 3. 

higher energy costs: an increase in the 

value of the U.S. dollar. IECA disputes 

this benefit, contending (among other 

arguments) that it is speculative to 

assume that LNG exports would 

increase the value of the dollar, when 

there are far greater influences on the 

dollar’s value.158

On the other hand, NextDecade 

contends that all of the ‘‘more likely’’ 

scenarios considered by NERA will 

improve consumer welfare for the 

average U.S. household, with consumer 

welfare strengthening even when global 

demand for LNG exports increases.159

According to NextDecade, the 2018 

Study shows that consumer welfare is 

highest when the United States has an 

abundant, low-cost, domestic natural 

gas supply.160 Citing the 2018 Study, 

NextDecade and JCEP argue that this 

wealth transfer will benefit U.S. 

households through increased labor 

income and lower prices overall for 

imported goods—such that the benefits 

of LNG exports will outweigh any 

potential increase to the marginal cost of 

supplying natural gas.161

b. DOE/FE Response 

Consistent with DOE/FE’s prior 

studies, DOE believes that the public 

interest generally favors authorizing 

proposals to export natural gas that have 

been shown to lead to net benefits to the 

U.S. economy. DOE has observed in 

previous export authorizations that, 

although there could be circumstances 

in which the distributional 

consequences of an authorizing decision 

could be shown to be so negative as to 

outweigh net positive benefits to the 

U.S. economy as a whole, DOE had not 

been presented with sufficiently 

compelling evidence that those 

circumstances were present. 

The 2018 Study describes how 

different households could be affected 

by increased levels of LNG exports. In 

terms of direct benefits, the 2018 Study 

states that, ‘‘[i]f U.S. households, or 

their retirement funds, hold stock in 

natural gas producers, they will benefit 

from the increase in the value of their 

investment.’’ 162 The 2018 Study noted 

indirect benefits of increased LNG 

exports accruing to households through 

the additional wealth transferred into 

the United States, ‘‘which increases the 

value of the dollar and reduces prices of 

other imported goods.’’ 163 Overall, 

‘‘[l]ike other trade measures, LNG 

exports will cause shifts in industrial 

output, employment, and in sources of 

income.’’ 164 However, the effects on 

different households from increased 

LNG exports will depend on their 

income sources. 

As described previously, with respect 

to consumer well-being, the 2018 Study 

found that all scenarios within the more 

likely range of results are welfareimproving for the average U.S. 

household. This result is driven by 

households’ receipt of additional 

income from export revenues and takeor-pay tolling charges for LNG exports, 

and this additional income outweighs 

the income lost from higher energy 

prices.165

Finally, we note that in the 

consolidated Sierra Club II case, the 

D.C. Circuit rejected—in all three 

cases—Sierra Club’s argument that DOE 

‘‘erred by failing to consider 

distributional impacts’’ when evaluating 

the public interest under NGA section 

3(a).166 The Court upheld DOE/FE’s 

conclusion that ‘‘given that exports will 

benefit the economy as a whole and 

absent stronger record evidence on the 

distributional consequences, [DOE/FE] 

could not say that . . . exports were 

inconsistent with the public interest on 

these grounds.’’ 167 On this basis, the 

Court held that DOE/FE had 

‘‘adequately addressed’’ Sierra Club’s 

concerns regarding distributional 

impacts.168

None of the commenters advancing 

this argument have provided a 

quantitative analysis of the 

distributional consequences of 

authorizing LNG exports at the 

household level. Absent stronger record 

evidence on these alleged distributional 

consequences, we cannot say that 

increased LNG exports are inconsistent 

with the public interest on these 

grounds. 

D. Regional Impacts 

1. Comments 

Some commenters, including Jody 

McCaffree and the Evans Schaaf Family, 

address the negative regional impacts 

potentially associated with LNG 

exports. They argue that local 

communities near shale gas production 

areas, pipelines, and/or LNG export 

terminals could be adversely affected by 

increases in natural gas production and 

LNG exports. They cite loss of property 

through eminent domain, property 

devaluation, degradation of 

infrastructure, environmental and 

public health issues (including local air 

pollution and poisoned drinking water), 

and harm to local economies, among 

other issues. 

Other commenters seek to rebut these 

concerns by identifying the positive 

regional benefits associated with LNG 

exports, both in regions where shale 

development and production occur, and 

the regions in which LNG export 

terminals may be located. For example, 

the Marcellus Shale Coalition 

(comprised of nearly 200 producing, 

midstream, transmission, and supply 

chain members committed to the 

development of natural gas resources in 

the Marcellus, Utica, and related 

geological formations) cites the 

economic benefits of LNG exports to 

Pennsylvania’s economy. The Coalition 

further asserts that increasing LNG 

exports is crucial to stabilizing domestic 

natural gas markets—particularly in the 

Appalachian Basin—and positioning 

these markets for continued growth.169

2. DOE/FE Response 

A general consideration of regional 

impacts is outside of the scope of the 

2018 LNG Export Study. DOE/FE 

believes regional impacts are 

appropriately considered on a case-bycase basis during the review of each 

non-FTA application, consistent with 

DOE/FE’s longstanding practice. 

E. Estimates of Domestic Natural Gas 

Supply 

1. Comments 

Jody McCaffree points to DOE/FE’s 

total approved volume of exports to 

both FTA and non-FTA countries in 

alleging that DOE ‘‘has already 

approved LNG exports in excess of 

projected U.S. production’’ of natural 

gas.170

Other commenters, including API, 

CLNG, and the Marcellus Shale 

Coalition, assert that the United States 

has abundant domestic natural gas 

reserves. Pointing to the 2018 Study, 

CLNG asserts that ‘‘[t]he scenarios 

where the U.S. reaps the most economic 

gains at the lowest price from exporting 

LNG are those where our supply of 

natural gas is highest.’’ 171 CLNG further 

asserts that the United States is more 

than capable of continuing to meet high 

production and supply expectations, 

citing the growth of U.S. natural gas 


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172Comment of Pennsylvania Chamber of 

Business and Industry at 1–2. 

173U.S. Energy Information Administration, 

‘‘Short-Term Energy Outlook,’’ available at: https:// 

www.eia.gov/outlooks/steo/data/browser/#/?v=15&

f=A&s=0&maptype=0&ctype=linechart (Table 5a, 

U.S. Natural Gas Supply, Consumption, and 

Inventories, ‘‘Total Dry Gas Production’’). 

174See AEO 2018, supra note 84, https://

www.eia.gov/outlooks/aeo/data/browser/#/?id=13- 

AEO2018&cases=ref2018&sourcekey=0;0 (link to 

table: Natural Gas Supply, Disposition, and Prices, 

‘‘Dry Gas Production’’). 

175 Id. 

176Comment of Sierra Club at 2. 

177Comment of Evans Schaaf Family at 6. 

178Comment of IECA at 2–3. 

179 Id. at 2 (citing Fed. Power Comm’n v. Hope 

Gas Co., 320 U.S. 591, 610 (1944)). 

180 Id. at 1. 

181Comment of NextDecade Corp. at 5–6 (citing 

2018 LNG Export Study at 55). 

production, the growth in total natural 

gas resource estimates, and 

improvements in the ability to detect 

and extract natural gas. 

Commenters, such as API and the 

Pennsylvania Chamber of Business and 

Industry, likewise point to the 

conclusions of the 2018 Study in 

arguing that the vast resources of U.S. 

natural gas can provide affordable 

supplies to meet domestic demand, 

while simultaneously providing for an 

increase in LNG exports. The 

Pennsylvania Chamber of Business and 

Industry maintains that authorizing 

LNG exports results in a stable, 

affordable supply of natural gas to 

residential, commercial, and industrial 

customers. In the Chamber’s view, the 

market development of natural gas, both 

domestically and abroad, promotes 

natural gas production and the build-out 

of natural gas transmission and LNG 

infrastructure in the United States.172

2. DOE/FE Response 

First, DOE/FE notes that the volumes 

authorized for export to FTA and nonFTA countries are not additive to one 

another. Ms. McCaffree’s argument does 

not appear to recognize this fact, which 

is reflected in DOE’s orders. Rather, 

each authorization grants authority to 

export the entire volume of a facility to 

FTA or non-FTA countries, respectively, 

to provide the authorization holder with 

maximal flexibility in determining its 

export destinations. According to EIA 

data, U.S. domestic dry natural gas 

production for the year 2017 averaged a 

rate of 74.77 Bcf/d, well in excess of 

current long-term FTA and non-FTA 

authorizations (in non-additive volumes 

of 59.33 Bcf/d and 23.05 Bcf/d, 

respectively).173

DOE/FE takes note of the natural gas 

production projections in EIA’s AEO 

2018, which show significant increases 

over the forecast period. In the 

Reference case, dry natural gas 

production is projected to increase by 

49% from 2016 to 2040 (26.94 Tcf to 

40.15 Tcf).174 In the High Oil and Gas 

Resource and Technology case, the 

growth from 2016 to 2040 in dry natural 

gas production is even larger at 85% 

(26.94 Tcf to 49.98 Tcf).175

F. Cost of Environmental Externalities 

1. Comments 

Several commenters, including Sierra 

Club, Oregon Wild, Jody McCaffree, and 

the Evans Schaaf Family, maintain that 

LNG exports will increase demand for 

natural gas, thereby increasing negative 

environmental and economic 

consequences associated with natural 

gas production. Sierra Club adds that 

every stage of the LNG lifecycle has 

important environmental impacts. 

These commenters assert that the 2018 

Study failed to consider the cost of 

environmental externalities associated 

with LNG exports. The externalities 

identified by these commenters include, 

but are not limited to, the following: 

• Environmental costs associated 

with producing more natural gas to 

support LNG exports, including the 

costs, risks, and impacts associated with 

hydraulic fracturing and drilling to 

produce natural gas; and costs 

associated with increased water scarcity 

to support hydraulic fracturing; 

• Environmental costs associated 

with the life cycle of U.S. LNG 

(hydraulic fracturing of shale gas, 

liquefaction, and export) in the form of 

increased emissions of GHGs and other 

global warming pollution, climate 

change and climate instability 

(including droughts and other extreme 

weather events), and ocean 

acidification; 

• Local and regional costs associated 

with LNG exports, including impacts on 

local communities and industries; 

• The costs associated with eminent 

domain, which may be necessary to 

build new pipelines to transport natural 

gas; and 

• The potential regulatory costs and 

impacts of environmental regulations 

governing hydraulic fracturing and 

natural gas drilling. 

According to Sierra Club, ‘‘DOE has 

demonstrated that it plainly has the 

tools needed to consider these 

issues,’’ 176 yet the 2018 Study failed to 

consider them. The Evans Schaaf 

Family also urges DOE to clarify what 

emissions are being calculated and 

whether a cost of those emissions has 

been included in the results of the 2018 

Study.177

2. DOE/FE Response 

Analysis of environmental impacts 

from the export of U.S. LNG was not 

part of the scope of the 2018 Study. 

Consistent with DOE/FE practice, all 

environmental issues will be analyzed 

in the final order issued in each of the 

pending and future non-FTA 

proceedings. 

G. Natural Gas Price Impacts 

1. Comments 

Several commenters, such as IECA 

and Sierra Club, address potential 

natural gas price impacts associated 

with LNG exports. They contend that 

increases in LNG exports will increase 

demand for natural gas, driving up 

prices in the United States and 

adversely affecting electric and natural 

gas utility consumers, EITE industries, 

and residential consumers. In particular, 

IECA asserts that the 2018 Study’s 

‘‘most likely’’ scenario—LNG exports up 

to 30.7 Bcf/d by 2040—could increase 

prices 117% above today’s Henry Hub 

prices by 2040, and 44% above EIA’s 

AEO 2018 price in 2040 (which assumes 

14.5 Bcf/d of LNG exports).178 IECA 

alleges that such price hikes would 

threaten the domestic supply of natural 

gas at reasonable prices, such that 

exports of this magnitude would not be 

in the public interest.179

IECA further warns that ‘‘excessive 

LNG exports’’ may result in domestic 

prices for natural gas becoming tied to 

global demand-driven pricing.180

According to IECA, when global 

demand increases, so will U.S. natural 

gas prices—to the detriment of U.S. 

consumers. 

On the other hand, commenters such 

as API, NextDecade, and the 

Pennsylvania Chamber of Business and 

Industry dispute the likelihood of price 

increases due to LNG exports. For 

example, NextDecade points to the 

finding of the 2018 Study that U.S. 

natural gas prices are more dependent 

on both the availability of natural gas 

and extraction technology than on U.S. 

LNG export policy—which, it states, 

demonstrates the importance of policies 

that continue to support natural gas 

infrastructure, including LNG export 

authorizations. For this reason, 

NextDecade asserts, the 2018 Study 

shows that higher LNG exports cause 

only ‘‘very small’’ increases in U.S. 

natural gas prices, if any.181

These commenters contend that, in 

fact, there have been no significant price 

increases since exports of U.S. LNG 

began in 2016, contrary to warnings 


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182Comment of API at 1. 

183Comment of CLNG at 5. 

184Comment of NextDecade Corp. at 6 (citing 

2018 LNG Export Study at 54 n.47). 

185 2018 LNG Export Study at 55. 

186 Id. at 54. 

187 Id. at 50–51. 

188 Id. 

189 Id. 

190 Id. 191 2018 LNG Export Study at Appendix E (pages 

unnumbered). 192AEO 2018, supra note 84, 

https://www.eia.gov/outlooks/aeo/data/browser/ 

#/?id=13-AEO2018®ion=0-0&cases=highrt&

start=2016&end=2050&f=A&sourcekey=0 (link to 

table: Natural Gas Supply, Disposition, and Prices, 

‘‘High resource and technology case,’’ ‘‘Natural gas 

spot price at Henry Hub’’). 

193See EIA, Henry Hub Natural Gas Spot Price 

(Annual), available at: https://www.eia.gov/dnav/ 

ng/hist/rngwhhda.htm (Dec. 12, 2018). 

194 2018 LNG Export Study at 57–58. 

195 Id. at 59. 

196 Id. at 57–60. 

197See, e.g., Golden Pass Products LLC, DOE/FE 

Order No. 3978, at 91–92. 

made by commenters on DOE’s prior 

LNG export studies. They point to the 

2018 Study in arguing that domestic 

natural gas prices are unlikely to 

increase to a level that would impair 

manufacturing cost competitiveness or 

hurt consumers. According to API, the 

2018 Study clearly shows that even at 

high levels of LNG exports, the impact 

on domestic prices is minimal because 

these exports are generating incremental 

new natural gas production that 

otherwise would not have a domestic 

market.182 CLNG further argues that 

allowing U.S. Henry Hub indexed 

exports will help sustain lower pricing 

over the long-term and provide an 

alternative to oil-linked natural gas 

contracts.183

NextDecade states that, even in New 

England (which experiences frequent 

natural gas price spikes), the 2018 Study 

shows that the average base differential 

between New England and Henry Hub 

prices is unlikely to be affected by 

increases in LNG exports in the long 

run. As NextDecade explains, NERA 

found that these price spikes in New 

England are the result of the region’s 

limited natural gas pipeline 

infrastructure and localized weather 

events. Therefore, NextDecade asserts, 

the prices spikes will continue 

regardless of the level of LNG 

exports.184

2. DOE/FE Response 

The 2018 Study described two 

relationships between U.S LNG exports 

and U.S. natural gas prices based on the 

modeling results: 

• ‘‘Increasing U.S. LNG exports under 

any given set of assumptions about U.S. 

natural gas resources and their 

production leads to only small increases 

in U.S. natural gas prices;’’ and 

• ‘‘Available natural gas resources 

have the largest impact on natural gas 

prices. Therefore, U.S. natural gas prices 

are far more dependent on available 

resources and technologies to extract 

available resources than on U.S. policies 

surrounding LNG exports.’’ 185

In the 2018 Study results, natural gas 

prices range from $5 to $6.50 per 

MMBtu in 2040 for all the Reference 

supply scenarios in the more likely 

range with a combined probability of 

47%. In the high resource supply 

scenarios, natural gas prices range from 

$3.50 to $4 per MMBtu in 2040 with a 

combined probability of 22%.186

As an initial matter, IECA incorrectly 

identified the ‘‘most likely’’ scenario of 

LNG exports from the 2018 Study. 

‘‘Table 4’’ in the Study provides the 

scenario probabilities for the more likely 

scenarios.187 The most likely scenario 

has a probability of 14.5% and is the 

‘‘Ref_Ref_Ref_High’’ case with exports 

of 24.0 Bcf/d in 2040.188 This scenario 

is somewhat more likely than the 

Reference case (‘‘Ref_Ref_Ref_Ref’’), 

which has a probability of 13.1% and 

exports of 12.9 Bcf/d.189 The 30.7 Bcf/ 

d scenario (‘‘High_Ref_Ref_High’’) 

identified by IECA is the third most 

likely at 7.9%.190

Table 4 below shows modeled Henry 

Hub natural gas prices in 2040 for these 

three scenarios:’’ 191

TABLE 4—EXPORTS AND HENRY HUB PRICES FOR THREE MOST LIKELY SCENARIOS

Scenario 

LNG exports 

in 2040 

(Bcf/d) 

Henry Hub 

in 2040 

2016$/MMBtu 

Ref_Ref_Ref_High ................................................................................................................................................... 24.0 6.0 

Ref_Ref_Ref_Ref ..................................................................................................................................................... 12.9 5.6 

High_Ref_Ref_High .................................................................................................................................................. 30.7 3.9 

These Henry Hub prices in the 2018 

Study are somewhat higher than those 

projected in EIA’s AEO 2018. AEO 2018 

projects LNG exports at a rate of 14.5 

Bcf/d in the Reference case in 2040 with 

a corresponding Henry Hub price of 

$4.50 (in constant 2017 dollars). In the 

High Oil and Gas Resource and 

Technology (HOGR) case, LNG exports 

are larger at 21.9 Bcf/d with a Henry 

Hub price of $3.02.192

The price projections in the 2018 

Study and in EIA’s AEO 2018 are 

consistent with average annual Henry 

Hub spot prices over the past two 

decades. Between 2000 and 2009, 

annual average Henry Hub spot prices 

ranged from $3.38 to $8.86 per MMBtu; 

between 2010 and 2017, prices ranged 

from $2.52 to $4.37 per MMBtu.193

In response to comments noting that 

increased global demand for natural gas 

will increase domestic natural gas 

prices, several scenarios in the 2018 

Study analyze this relationship and its 

domestic macroeconomic impact. 

Within a domestic natural gas supply 

scenario, increased ROW demand for 

natural gas increases domestic natural 

gas prices, all else being equal.194 This 

increased ROW demand also causes 

prices throughout the world to 

increase.195 The 2018 Study discusses 

this through an ‘‘international demand 

pull’’ scenario, quantifying the 

differences between the High_Ref_Ref_

Low and High_Ref_Ref_High cases 

(where the only assumption changed is 

the ROW demand for natural gas). When 

moving from low to high ROW demand, 

the 2018 Study shows an increase in the 

Henry Hub price of $0.50 and an 

increase of $2.70 in the wellhead price 

outside of North America.196 While 

domestic and ROW natural gas prices 

both increase, the increased ROW 

demand drives a larger increase in ROW 

prices than domestically. In this way, 

the 2018 Study shows that U.S. natural 

gas prices will not rise to the same 

levels as global natural gas prices as a 

result of increased LNG exports. This 

result is consistent with the 2015 

Study’s analysis of the linkages between 

U.S. and global natural gas prices, as 

DOE/FE previously discussed.197

As noted previously, the 2018 Study 

consistently shows macroeconomic 

benefits to the U.S. economy in every 

scenario at the projected Henry Hub 


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198 2018 LNG Export Study at 67, 70. 

199Comment of API at 2. 

200Comment of NextDecade Corp. at 4. 

201 Id. at 8. 

202Comment of Pennsylvania Chamber of 

Business and Industry at 1–2. 

203 2018 LNG Export Study at 64. 

204Comment of IECA at 4. 

205 Id. 

206Most federal agencies (including DOE) refer to 

section 515 as the ‘‘Information Quality Act,’’ but 

because IECA uses the ‘‘Data Quality Act’’ 

terminology, we will do so here. 

207Section 515, Treasury & General Gov’t 

Appropriations Act for Fiscal Year 2001 (Pub.L. 

106–554; 114 Stat. 2763A–154)). The Data Quality 

Act amended the Paperwork Reduction Act of 1995 

(44 U.S.C. Ch. 35). 

208Office of Mgmt. & Budget, Guidelines for 

Ensuring and Maximizing the Quality, Objectivity, 

Utility, and Integrity of Information Disseminated 

by Federal Agencies; Republication, 67 FR 8452, 

8452–8454 (Feb. 22, 2002) (summarizing OMB’s 

procedural history in implementing section 515) 

[hereinafter OMB Guidelines]. 

209 Id. (‘‘quality’’ is ‘‘the encompassing term, of 

which ‘utility,’ ‘objectivity,’ and ‘integrity’ are the 

constituents); see also id. at 8459 (definition of 

‘‘quality’’). 

210U.S. Dep’t of Energy, Final Report 

Implementing Office of Management and Budget 

Info. Dissemination Quality Guidelines, 67 FR 

62446 (Oct. 7, 2002), available at: https://

www.energy.gov/sites/prod/files/nepapub/nepa_

documents/RedDont/G-DOE-67FR6244

6OMBquality.pdf [hereinafter DOE Guidelines]. 

211 Id. at 62446–47. 

212See Comment of IECA at 4–5. 

213 DOE Guidelines, 67 FR 62451 (Definition #9, 

‘‘Reproducibility’’). 

214 Id. (Definition #7, ‘‘Objectivity’’). 

215 Id. (Definition #6, ‘‘Integrity’’). 

216 Id. (Definition #3, ‘‘Influential’’). 

217 Id. at 62452. 

natural gas prices, as well as positive 

annual growth across the energyintensive sectors.198

H. Benefits to U.S. Trade Balance 

1. Comments 

API and JCEP point to the conclusion 

of the 2018 LNG Export Study that 

increased exports of natural gas will 

improve the U.S. balance of trade. API 

further argues that LNG exports have 

helped to position the United States as 

an ‘‘energy superpower,’’ changing the 

‘‘energy equation’’ to the benefit of the 

United States.199

NextDecade maintains that, with 

estimated export revenues of up to $129 

billion per year by 2040, LNG exports 

present a significant opportunity to 

close the U.S. trade gap. NextDecade 

further states that, within the range of 

the Henry Hub price scenarios, the 2018 

Study demonstrates that the United 

States is and will be a net exporter of 

natural gas—and, indeed, may ‘‘emerge 

as the world’s largest supplier of LNG in 

the coming years.’’ 200 According to 

NextDecade, the 2018 Study also 

demonstrates that, even though natural 

gas supply and demand shocks both 

inside and outside of the United States 

have different impacts on natural gas 

prices, they result in similar levels of 

net LNG exports. Accordingly, 

NextDecade states that increased LNG 

exports will benefit the trade balance 

regardless of the volume exported.201

The Pennsylvania Chamber of 

Business and Industry agrees that the 

2018 Study affirms the significant 

benefits that global trade can bring to 

the United States—specifically, through 

both LNG exports and in attracting new 

investment in manufacturing assets 

reliant on affordable natural gas.202

2. DOE/FE Response 

Consistent with the observations on 

the benefits of trade made by the 

commenters, the 2018 Study notes that 

‘‘[i]ncreased exports of natural gas will 

improve the U.S. balance of trade and 

result in a wealth transfer into the 

U.S.’’ 203

I. Procedural Arguments 

1. Compliance With Data Quality Act 

a. Comments 

IECA argues that the 2018 LNG Export 

Study violates the Data Quality Act 

(DQA) because: (i) NERA used a 

‘‘proprietary and non-reproducible 

economic model,’’ and (ii) the Study’s 

peer reviewers allegedly have a 

financial interest in LNG exports, such 

that they could not be independent in 

their views.204 For these reasons, IECA 

contends that the 2018 Study ‘‘cannot 

be used in decision-making by DOE.’’ 205

i. Background on Data Quality Act 

In December 2000, Congress passed 

and the President signed the Treasury 

and General Government 

Appropriations Act for Fiscal Year 2001 

(Pub. L. 106–554). Section 515 of that 

bill is commonly referred to as the ‘‘Data 

Quality Act’’ or the ‘‘Information 

Quality Act.’’ 206 Section 515 directed 

the Office of Management and Budget 

(OMB) to issue government-wide 

guidelines that ‘‘provide policy and 

procedural guidance to Federal agencies 

for ensuring and maximizing the 

quality, objectivity, utility, and integrity 

of information (including statistical 

information) disseminated by Federal 

agencies . . . .’’ 207

Between 2001 and 2002, OMB 

published a series of guidelines and 

supplementary information 

implementing the Data Quality Act.208

In final guidelines issued in February 

2002, OMB instructed federal agencies 

to issue their own implementing 

guidelines by October 1, 2002. In its 

Guidelines, OMB observed that the Data 

Quality Act ‘‘denotes four substantive 

terms regarding information 

disseminated by Federal agencies: 

quality, utility, objectivity, and 

integrity.’’ 209 In October 2002, in 

response to OMB’s Guidelines, DOE 

issued a document entitled Final Report 

Implementing Office of Management 

and Budget Information Dissemination 

Quality Guidelines.210 DOE explained 

that it modeled its Guidelines on the 

OMB Guidelines with modifications 

specific to DOE.211

ii. IECA’s Arguments 

IECA argues that the 2018 Study 

violates three standards set forth in the 

DOE Guidelines: reproducibility, 

objectivity, and integrity.212 The DOE 

Guidelines define these terms as 

follows: 

• Reproducibility: ‘‘means capability 

of being substantially reproduced, 

subject to an acceptable degree of 

imprecision, and with respect to 

analytical results, ‘capable of being 

substantially reproduced’ means that 

independent analysis of the original or 

supporting data using identical methods 

would generate similar analytic results 

. . . .’’ 213

• Objectivity: ‘‘means the information 

is presented in an accurate, clear, 

complete, and unbiased manner and the 

substance of the information is accurate, 

reliable, and unbiased.’’ 214

• Integrity: ‘‘means the information 

has been secured and protected from 

unauthorized access or revision, to 

ensure that the information is not 

compromised through corruption or 

falsification.215

IECA also asserts that the 2018 Study 

is ‘‘influential’’ under the DOE 

Guidelines, which is defined as: 

[W]hen used in the context of scientific, 

financial, or statistical information, 

information (1) that is subject to embargo 

until the date of its dissemination . . . 

because of potential market effects; (2) that is 

the basis for a DOE action that may result in 

an annual effect on the economy of $100 

million or more; and (3) that is designated by 

a DOE Element as ‘influential.’ 216

Information qualifying as 

‘‘influential’’ is generally subject to a 

‘‘high degree of transparency of data and 

methods . . . to facilitate the 

reproducibility of [the] information by 

qualified third parties,’’ unless it falls 

within a stated exemption.217

First, addressing reproducibility, 

IECA states that the 2018 Study uses a 

‘‘NERA proprietary economic model,’’ 

such that ‘‘third party economists have 

concluded that the results of the study 


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218Comment of IECA at 4. 

219 Id. at 5. 

220 DOE Guidelines, 67 FR 62452. 

221Comment of IECA at 5. 

222 Id. 

223 Id. 

224Comment of Evans Schaaf Family at 1. 

225See 2018 LNG Export Study at 80–95. 

226 Id. at 84–96 (Appx. B). 

227 Id. at 97–106 (Appx. C). 

228 Id. at 111 (Appx. E, with attached 

spreadsheet). 

229 DOE Guidelines, 67 FR 62452. 

230Comment of IECA at 4. 

231 DOE Guidelines, 67 FR 62446, 62452. 

232 Id. at 62452. 

233 Id. at 62448. 

234 Id. 

235We note that ‘‘[t]he DOE Guidelines do not 

purport to impose legally binding substantive 

policies on DOE Elements.’’ Id. at 62449. 

Additionally, ‘‘neither section 515 [the DQA] nor 

the OMB Guidelines nor DOE’s Guidelines create 

private rights or contemplate judicial oversight of 

its directives through judicial review.’’ Id. at 62450. 

236Comment of IECA at 5; see also Comment of 

Evans Schaaf Family at 1 (stating that the 2018 

Study’s probabilities are ‘‘problematic’’ because 

‘‘they are coming entirely from industry leaders 

who would likely have something to gain in 

developing LNG as a global commodity’’). 

237Comment of IECA at 5. 

are not reproducible.’’ 218 IECA also 

claims that the 2018 Study qualifies as 

‘‘influential’’ under the DQA because ‘‘it 

may result in an annual effect on the 

economy of $100 million or more.’’ 219

IECA thus appears to suggest that the 

2018 Study is subject to a ‘‘high degree 

of transparency’’ for purposes of 

reproducibility by ‘‘qualified third 

parties.’’ 220

Second, IECA alleges that the 2018 

Study is not ‘‘objective’’ and lacks 

‘‘integrity’’ within the meaning of the 

DQA due to alleged personal bias on the 

part of NERA’s external peer review 

panel. IECA claims that ‘‘it is likely that 

every one of the individuals [involved 

in the peer review]—with the exception 

of peer reviewer John Staub of EIA— 

‘‘have or will receive financial benefits 

from the oil and natural gas 

industries.’’ 221 IECA contends that 

‘‘[i]ndependent objectivity and integrity 

is [sic] needed to validate the economic 

model and whether its assumptions are 

sound regardless of [the peer reviewers’] 

understanding of the oil and gas 

business, and not slanted to support the 

views of those who desire to export 

substantial volumes of LNG.’’ 222 On this 

basis, IECA asks DOE whether the peer 

reviewers ‘‘disclosed their financial 

association with the oil and gas 

industry.’’ 223 The Evans Schaaf Family 

similarly questions the basis for the 

2018 Study, given that (in their view) 

the data inputs for the Study ‘‘are 

coming entirely from industry leaders 

who would likely have something to 

gain in developing LNG as a global 

commodity.’’ 224

b. DOE/FE Response 

i. Reproducibility 

DOE has carefully considered IECA’s 

arguments and determined that the 2018 

LNG Export Study satisfies the DQA’s 

standard for ‘‘reproducibility,’’ as 

discussed below. 

DOE/FE has determined that the 2018 

Study fulfills the DQA’s objectives in 

both providing transparency about the 

Study and ensuring the quality of 

information disseminated to the public. 

As discussed above, NERA relies on 

publicly available data for input into its 

models, including EIA’s AEO 2017, 

EIA’s IEO 2017, and the IEA’s WEO 

2016. The AEO and IEO projections are 

published pursuant to the Department 

of Energy Organization Act of 1977, 

which requires the EIA Administrator to 

prepare annual reports on trends and 

projections for energy use and 

supply.225

In the Study, NERA explains that it 

developed the possible choices for each 

uncertainty beginning with EIA’s AEO 

2017 Reference case—a DOE 

requirement of the Study. In addition, 

the 2018 Study discusses the U.S. and 

Rest of World natural gas market 

assumptions, including the linkages 

between the scenarios and publicly 

available projections from EIA and IEA. 

Appendix B to the Study describes the 

NewEra model and provides a detailed 

discussion of the natural gas supply 

elasticity estimates used in the U.S. 

supply scenarios, which were based on 

an analysis of four recent studies.226

Appendix C provides the supply and 

demand ranges and probability 

scenarios.227 Appendix E provides the 

detailed GNGM model results for the 54 

scenarios considered in the 2018 Study, 

including levels of LNG exports, export 

revenues, natural gas production, 

natural gas consumption, Henry Hub 

prices, U.S. LNG destinations, and 

North American pipeline trade.228 DOE/ 

FE believes the incorporation of this 

extensive information about the data, 

assumptions, and models used in the 

2018 Study satisfies the requirements of 

the DQA and the corresponding DOE 

guidelines. In short, DOE has 

‘‘disclose[d] the specific data sources 

that have been used and the specific 

quantitative methods and assumptions 

that have been employed.’’ 229

We note that IECA has not provided 

any evidence to support its claim that 

‘‘[t]hird party economists have 

concluded that the results of the study 

are not reproducible.’’ 230 The public 

comment procedures followed by DOE/ 

FE in this proceeding (as with its prior 

LNG export studies) allow IECA and 

other commenters to provide differing 

analyses about LNG exports—including 

third-party economic projections using 

EIA data—should they choose to do so. 

IECA elected not to submit any rebuttal 

studies, projections, or other evidence to 

counter the conclusions of the 2018 

Study. 

Next, even if the 2018 Study were 

‘‘influential’’ under the DQA as IECA 

claims, the DOE Guidelines ‘‘do not 

direct that all disseminated original and 

supporting data be subjected to the 

reproducibility requirement applicable 

to influential information.’’ 231 The DOE 

Guidelines acknowledge that certain 

types of data are not practicably subject 

to replication due to ‘‘confidentiality, 

privacy, trade secret, security, and 

intellectual property constraints,’’ 

among others.232 We further note that, 

in the DOE Guidelines, DOE declined to 

‘‘adopt a general prohibition against use 

of . . . ‘third party proprietary 

models.’ ’’ 233 DOE reasoned that such a 

prohibition was not required by the 

OMB Guidelines and ‘‘would be too 

restrictive.’’ 234

Consistent with the DOE Guidelines, 

DOE/FE finds that, although NERA’s 

proprietary GNGM and NewERA models 

are intellectual property subject to trade 

secret and confidentiality constraints, 

the incorporation of the information 

about the data, assumptions, and 

models used in the 2018 Study satisfies 

the DQA and DOE’s guidelines. For all 

of these reasons, we disagree with 

IECA’s position that the 2018 Study fails 

to meet the reproducibility standard of 

the DOE Guidelines.235

ii. Objectivity 

IECA acknowledges that the 2018 

Study involved peer review by a panel 

of experts, but it attempts to discredit 

the Study by suggesting that the peer 

reviewers are financially self-interested 

in the outcome of the Study— 

specifically, in promoting the ‘‘export of 

substantial volumes of LNG.’’ 236 On this 

basis, IECA argues that the 2018 Study 

fails to meet the ‘‘objectivity’’ and 

‘‘integrity’’ standards of the DOE 

Guidelines for this reason.237 As 

explained below, however, IECA 

provides no evidence to support these 

allegations of bias, other than pointing 

to the professional affiliations of the 

peer review panel. 

NERA explained the peer review 

process for the 2018 Study as follows: 

Nine experts on international LNG supply 

and demand, listed in the acknowledgement, 

agreed to review and comment on the 

proposed forecast assumptions and propose 


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238 2018 LNG Export Study at 41. 

239 Id. at 1 (Acknowledgment). 

240See id. 42–44. 

241See id. at 1 (identifying the peer reviewers, 

besides John Staub of EIA, as: Kevin Book 

(ClearView Energy Partners, LLC); Dr. Fereidun 

Fesharaki (Facts Global Energy); Dr. Hillard G. 

Huntington (Stanford University, Dep’t. of 

Management Science and Engineering); Vello A. 

Kuuskraa (Advanced Resources International, Inc.); 

Majed Limam and Mike Reimers (Poten and 

Partner’s Americas LNG & Natural Gas Consulting); 

and Dr. Scott Tinker (University of Texas, Bureau 

of Economic Geology)). 

242 Id. at 1, 42. 

243 DOE Guidelines, 67 FR 62352 (citation 

omitted). 

244 2018 LNG Export Study at 24. 

245 DOE Guidelines, 67 FR 62451. 

246 Id. at 1–2. 

247Comment of Evans Schaaf Family at 8. 

248 Id. 

249 Id. 

250Comment of API at 2. 

251Comment of JCEP at 5–6. 

252Comment of CLNG at 2; see also id. at 6. 

253Comment of LNG Allies at 2. 

254Comment of NextDecade Corp. at 4. 

modifications to the probabilities assigned to 

each case. The reviewers were provided with 

a brief written report describing the proposed 

probabilities and assumptions. KeyLogic 

Systems, Inc. gathered the individual 

reviewer’s responses and provided them to 

the study team for consideration.238

Each of these experts’ names and 

institutional affiliations are identified in 

the Study.239 Their invitation to 

participate as peer reviewers came 

directly from DOE/FE, consistent with 

standard protocols for peer review. In 

the Study (and as discussed above), 

NERA identified both the probability 

assumptions and any changes made to 

those assumptions based on input from 

the peer reviewers.240

IECA alleges that eight of the nine 

peer reviewers ‘‘have or will receive 

financial benefits from the oil and 

natural gas industries.’’ IECA expressly 

omits John Staub of EIA from this 

allegation—presumably because he 

works for the U.S. Government, whereas 

the other eight peer reviewers work for 

entities including universities, 

independent research firms, and 

consulting firms.241

IECA suggests that the peer reviewers’ 

input to the 2018 Study is selfinterested and lacking objectivity, such 

that NERA’s modifications to the Study 

based upon the peer reviewers’ feedback 

are likewise tainted. However, IECA 

fails to demonstrate how the 

professional affiliations of the peer 

reviewers create bias or how that alleged 

bias impacted the design or results of 

the 2018 Study. 

IECA also does not acknowledge that 

NERA selected the peer reviewers 

because they are ‘‘experts on the topic 

of global LNG supply and demand.’’ 242

This is consistent with the DOE 

Guidelines, which note that, under 

OMB policy, peer reviewers should ‘‘be 

selected primarily on the basis of 

necessary technical expertise.’’ 243 In the 

Study, NERA explained its 

determination that these peer reviewers 

would assist in providing the ‘‘broadest 

possible perspective on the potential 

range of natural gas supply and demand 

outcomes during the review period.’’ 244

The participation of the peer reviewers 

thus enhanced, rather than undermined, 

both the objectivity and the integrity of 

the Study. 

Finally, although IECA invokes the 

‘‘integrity’’ standard under the DOE 

Guidelines, that standard pertains to 

ensuring that ‘‘information has been 

secured and protected from 

unauthorized access or revision.’’ 245

IECA has not presented any argument or 

evidence to suggest that the security of 

the 2018 Study was compromised, and 

therefore we decline to address this 

point. 

2. Reliance on NERA’s Analysis 

a. Comments 

John Young does not expressly 

oppose the 2018 Study, but he questions 

DOE’s reliance on NERA’s work in the 

2018 Study for reasons independent of 

the Data Quality Act. Mr. Young asks 

whether DOE has examined NERA’s 

‘‘track record in retrospect’’—and, 

specifically, whether DOE has 

attempted to square NERA’s ‘‘optimism’’ 

for U.S. LNG exports given that some 

proposed LNG projects have not yet 

moved forward or achieved revenue 

flow. He urges DOE to hire Synapse 

Energy Economics (Synapse) as a third 

party contractor to critique the 2018 

Study. According to Mr. Young, 

Synapse has published critiques of LNG 

exports and natural gas projects, which 

he suggests would allow Synapse to 

critique the 2018 Study. 

b. DOE/FE Response 

In response, DOE/FE notes that the 

scenarios evaluated by NERA were 

based on four different uncertainties 

affecting natural gas markets, with three 

different cases for U.S. natural gas 

supply based on EIA’s AEO 2017. As 

explained above, NERA enlisted 

external peer review of the Study’s 

scenario design and probability 

assignments, and made modifications 

based on feedback from the peer 

reviewers. NERA also made clear that 

‘‘[its] findings . . . may contain 

projections based on current data and 

historical trends,’’ and that ‘‘[a]ny such 

predictions are subject to inherent risks 

and uncertainties.’’ 246 Additionally, 

consistent with its past practice, DOE/ 

FE has made the 2018 Study available 

for public comment. Commenters were 

free to submit a third-party critique of 

the 2018 Study by Synapse or other 

firms, although none did. 

J. Potential Impact on DOE/FE’s 

Regulatory Process 

1. Pending Non-FTA Applications 

a. Comments 

The Evans Schaaf Family states that, 

‘‘given the 68% probability [in the 2018 

Study] that U.S. LNG exports will be 

between 9.0 and 30.7 Bcf/d in 2040,’’ 

DOE ‘‘has an obligation to look closely 

at individual proposed projects, 

including where the gas is sourced, to 

determine whether or not projects are 

consistent with the public interest 

. . . .’’ 247 In the Family’s view, the 

2018 Study implies that FE ‘‘[should] 

approve all 55.04 Bcf/d LNG export 

projects for non-FTA export.’’ 248 The 

Family disagrees with this implication, 

and urges DOE against assuming that 

‘‘all LNG projects are equal.’’ 249

Other commenters argue that, given 

the results of the 2018 Study and DOE’s 

prior macroeconomic studies, DOE/FE 

should proceed expeditiously in 

reviewing and approving all pending 

applications to export LNG to non-FTA 

countries. API asserts that any 

unnecessary delay in approving nonFTA applications will put U.S. projects 

at ‘‘a competitive disadvantage in the 

global race to construct LNG facilities,’’ 

such that the United States will miss out 

on the economic and foreign policy 

gains associated with marketdetermined levels of U.S. LNG 

exports.250 JCEP states that DOE/FE 

should promptly approve the pending 

applications following the completion 

of the environmental review for each 

facility.251 CLNG similarly contends 

that, on the basis of the 2018 Study and 

DOE’s LNG export regulatory program to 

date, ‘‘DOE is fully armed to approve 

the remaining applications for export 

and should do so without delay.’’ 252

LNG Allies states that DOE can now 

‘‘safely shift its policy perspective to 

grant approvals to all . . . export 

applications to non-FTA countries 

without the need for any further 

macroeconomic studies (at least for the 

next four to five years).’’ 253 Citing the 

2018 Study, NextDecade asserts that 

‘‘DOE should continue approving export 

applications so that regulatory barriers 

do not distort the proper functioning of 

the marketplace.’’ 254 Finally, JCEP 

maintains that any opponent of LNG 

exports would need to make an 


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67272 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 

255Comment of JCEP at 6. 256 2018 LNG Export Study at 67. 

257Addendum to Environmental Review 

Documents Concerning Exports of Natural Gas 

From the United States, 79 FR 48132 (Aug. 15, 

2014). The Addendum and related documents are 

available at: https://www.energy.gov/sites/prod/ 

files/2014/08/f18/Addendum.pdf. 

258 Life Cycle Greenhouse Gas Perspective on 

Exporting Liquefied Natural Gas from the United 

States, 79 FR 32260 (June 4, 2014). The Life Cycle 

Greenhouse Gas Report is available at: http://

energy.gov/fe/life-cycle-greenhouse-gas-perspectiveexporting-liquefied-natural-gas-united-states. 

259Typically, the Federal agency responsible for 

permitting the export facility—usually either FERC 

or MARAD—serves as the lead agency in the NEPA 

review process, and DOE serves as a cooperating 

agency. Where no other Federal agency is 

responsible for permitting the export facility, DOE 

serves as the lead agency in the NEPA review 

process. 

260Comment of Cheniere at 2. 

261 15 U.S.C. 717b(c) (requiring DOE to grant 

applications for FTA authorizations, including 

applications to amend such authorizations, 

‘‘without modification or delay’’). 

262Comment of IECA at 1 (defining ‘‘subsidize’’ 

as ‘‘a foreign government and/or foreign 

government related entities that in whole or part, 

are either owned, controlled or regulated by such 

government entities, provide natural gas to their 

industrial and or electric generating sectors at 

prices that are below the market or purchased 

costs.’’). 

263 Id. 

264 Id. at 7. 

265 2018 LNG Export Study at 55. 

‘‘overwhelming showing’’ that an 

individual export proposal is 

inconsistent with the public interest, so 

as to overcome both the presumption in 

favor of exports codified in section 3(a) 

of the NGA and the findings of the 2018 

LNG Export Study.255

b. DOE/FE Response 

As mentioned above, the 2018 Study 

found a ‘‘positive correlation between 

GDP and LNG exports for the more 

likely scenarios in 2040.’’ 256 Under the 

NGA section 3(a), DOE examines each 

pending non-FTA application to 

determine whether the proposed exports 

are in the public interest. 

As discussed in prior non-FTA orders, 

DOE/FE reviews a substantial 

administrative record for each 

application proceeding under NGA 

section 3(a). That record typically 

includes (but is not limited to) the 

following: The application; any motions 

to intervene, protests, and/or comments 

submitted in response to the notice of 

application; DOE’s environmental 

studies (i.e., the Addendum 257 and the 

Life Cycle Greenhouse Gas Report); 258

public comments received on DOE/FE’s 

various analyses; any final 

environmental document for the export 

facility issued by FERC or the U.S. 

Maritime Administration (MARAD) 

under NEPA (such as a final 

environmental impact statement or 

environmental assessment); 259 and any 

order by FERC or MARAD granting or 

denying authorization for the applicant 

to site, construct, and operate the export 

facility. Accordingly, DOE/FE does not 

prejudge any of the pending non-FTA 

applications on the basis of the 2018 

LNG Export Study alone. For the 

reasons discussed herein, the 2018 LNG 

Export provides significant supporting 

evidence in DOE/FE’s public interest 

analysis under NGA section 3(a), but the 

2018 Study is one of many 

considerations in DOE/FE’s decisionmaking. Consistent with its past 

practice, DOE/FE will evaluate each 

pending non-FTA application as 

required under the NGA and NEPA, 

based on the administrative record 

compiled in each individual 

proceeding. 

2. Extended Term of Non-FTA 

Authorizations 

a. Comments 

LNG Allies and Cheniere assert that 

the design of the 2018 Study will allow 

for greater flexibility for DOE/FE’s 

regulatory process going forward. They 

point out that, whereas DOE’s prior 

studies had a horizon of 20 years, the 

2018 Study extends 30 years into the 

future (i.e., through December 31, 2050). 

Therefore, Cheniere asserts, ‘‘[t]he 

findings establish an evidentiary basis 

for DOE/FE to make public interest 

determinations and [issue] export 

authorizations for 30-year terms.’’ 260 On 

this basis, these commenters urge DOE/ 

FE to: (i) Grant new non-FTA 

authorizations for a term of 30 years, 

and (ii) initiate a consolidated 

proceeding to add an additional 10-year 

term to the existing 20-year LNG export 

authorizations for both FTA and nonFTA countries. They assert that the LNG 

industry would receive substantial 

benefits from extended 30-year 

authorizations—particularly since, for 

foreign buyers deciding between U.S. 

LNG and alternative long-term sources, 

longer authorization periods may prove 

decisive. 

b. DOE/FE Response 

A request to extend the term for 

existing or future non-FTA 

authorizations goes beyond the scope of 

this proceeding. If, in the future, DOE/ 

FE decides to propose an extended 

export term for existing or future nonFTA orders, DOE/FE will commence a 

new docket proceeding and publish 

notice of the proposal in the Federal 

Register. Insofar as any authorization 

holder wishes to request a longer export 

term for an existing FTA authorization, 

it is free to do so at any time under NGA 

section 3(c).261

3. Policy Recommendations 

a. Comments 

IECA recommends that DOE/FE 

implement two policy changes to ensure 

that the U.S. economy benefits from 

LNG exports. First, IECA states that 

DOE/FE should ensure that price levels 

for U.S. LNG are not dictated by global 

demand, as is currently happening with 

prices for U.S. crude oil (in IECA’s 

view). IECA states that DOE’s policy 

should be ‘‘to export LNG volumes to 

levels where demand in China, Japan, 

South Korea, India, and the EU 

[European Union] will not determine 

[U.S.] prices.’’ 262 According to IECA, 

such a policy is especially important 

during the winter heating season 

because the largest LNG importing 

countries have winter at the same time 

as the United States—potentially 

resulting in global price spikes for 

heating and electricity.263

Second, IECA asks DOE/FE to ‘‘issue 

an order that would specify that it is 

unlawful for U.S. LNG exports to be 

shipped to countries that subsidize 

natural gas to their manufacturing 

industry.’’ 264 As discussed above, IECA 

argues that allowing exports of U.S. 

LNG to ‘‘subsidizing’’ countries 

damages the competitiveness of U.S. 

manufacturing and threatens U.S. jobs. 

b. DOE/FE Response 

The policy recommendations offered 

by IECA go beyond the scope of this 

proceeding. DOE/FE takes no position 

on the proposed policy 

recommendations at this time. 

VII. Discussion and Conclusions 

DOE/FE commissioned the 2018 LNG 

Export Study and invited the 

submission of responsive comments on 

the Study. DOE/FE has analyzed this 

material and determined that the 2018 

Study provides substantial support for 

the pending non-FTA applications 

identified in this docket, as well as 

future non-FTA applications within the 

export volumes considered by the 2018 

Study (0.1 to 52.8 Bcf/d of natural gas). 

Specifically, the conclusion of the 2018 

LNG Export Study is that the United 

States will experience net economic 

benefits from issuance of authorizations 

to export domestically produced LNG. 

Other key findings of the 2018 Study 

include: 

• ‘‘Increasing U.S. LNG exports 

under any given set of assumptions 

about U.S. natural gas resources and 

their production leads to only small 

increases in U.S. natural gas prices.’’ 265


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Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67273 

266 Id. at 64. 

267 Id. at 67. 

268 Id. at 77. 

269 Id. at 77. 

270 Id. at 70. 

271 2018 LNG Export Study at 63 & Appx F. 

• ‘‘Increased exports of natural gas 

will improve the U.S. balance of trade 

and result in a wealth transfer into the 

United States.’’ 266

• ‘‘Overall [U.S.] GDP improves as 

LNG exports increase for all scenarios 

with the same U.S. natural gas supply 

condition.267

• ‘‘There is no support for the 

concern that LNG exports would come 

at the expense of domestic natural gas 

consumption.’’ 268

• ‘‘[A] large share of the increase in 

LNG exports is supported by an increase 

in domestic natural gas production.’’ 269

• ‘‘Natural gas intensive [industries] 

continue to grow robustly at higher 

levels of LNG exports, albeit at slightly 

lower rates of increase than they would 

at lower levels.’’ 270

We have evaluated the public comments 

submitted in response to the 2018 

Study. None of the eight comments 

opposing the 2018 Study have provided 

sufficient evidence to rebut or otherwise 

undermine these findings. 

Specifically, the opposing comments 

criticize aspects of the models, 

assumptions, and design of the 2018 

Study. As discussed above, however, 

EIA’s most recent projections in AEO 

2018 continue to show market 

conditions that will accommodate 

increased exports of natural gas. When 

compared to prior AEO Reference cases 

(including AEO 2017’s Reference case 

used in the 2018 Study), the AEO 2018 

Reference case projects increases in 

domestic natural gas production—well 

in excess of what is required to meet 

projected increases in domestic 

consumption. Accordingly, DOE/FE 

finds that the 2018 LNG Export Study is 

fundamentally sound and supports the 

proposition that exports of LNG from 

the lower-48 states, in volumes up to 

and including 52.8 Bcf/d of natural gas, 

will not be inconsistent with the public 

interest.271

As stated above, DOE will consider 

each application as required under the 

NGA and NEPA based on the 

administrative record compiled in each 

individual proceeding. 

Signed in Washington, DC, on December 

20, 2018. 

Steven E. Winberg, 

Assistant Secretary, Office of Fossil Energy. 

[FR Doc. 2018–28238 Filed 12–27–18; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket No. EL19–16–000] 

Michigan Electric Transmission 

Company, LLC; Notice of Institution of 

Section 206 Proceeding and Refund 

Effective Date 

On December 20, 2018, the 

Commission issued an order in Docket 

No. EL19–16–000, pursuant to section 

206 of the Federal Power Act (FPA), 16 

U.S.C. 824e (2012), instituting an 

investigation into whether the 

transmission formula rate of Michigan 

Electric Transmission Company, LLC 

may be unjust, unreasonable, or unduly 

discriminatory or preferential. Int’l 

Transmission Co., et al., 165 FERC 

61,236 (2018). 

The refund effective date in Docket 

No. EL19–16–000, established pursuant 

to section 206(b) of the FPA, will be the 

date of publication of this notice in the 

Federal Register. 

Any interested person desiring to be 

heard in Docket No. EL19–16–000 must 

file a notice of intervention or motion to 

intervene, as appropriate, with the 

Federal Energy Regulatory Commission, 

888 First Street NE, Washington, DC 

20426, in accordance with Rule 214 of 

the Commission’s Rules of Practice and 

Procedure, 18 CFR 385.214, within 21 

days of the date of issuance of the order. 

Dated: December 20, 2018. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

[FR Doc. 2018–28253 Filed 12–27–18; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

Combined Notice of Filings #2 

Take notice that the Commission 

received the following electric rate 

filings: 

Docket Numbers: ER10–1276–008; 

ER10–1287–007; ER10–1292–007; 

ER10–1303–007; ER10–1319–009; 

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Applicants: Consumers Energy 

Company, CMS Energy Resource 

Management Company, Grayling 

Generating Station Limited Partnership, 

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Partnership, CMS Generation Michigan 

Power, LLC, Dearborn Industrial 

Generation, L.L.C. 

Description: Supplement to May 31, 

2018 Notice of Non-Material Change-InStatus of Consumer Energy Company, et 

al. 

Filed Date: 12/20/18. 

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Comments Due: 5 p.m. ET 1/10/19. 

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Malburg LLC. 

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