79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–842 

ENSURING SMALL SCALE LNG CERTAINTY AND ACCESS 

ACT 

JULY 18, 2018.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. WALDEN, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4606] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 4606) to provide that applications under the Natural 

Gas Act for the importation or exportation of small volumes of natural gas shall be granted without modification or delay, having considered the same, report favorably thereon with an amendment and 

recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Committee Action .................................................................................................... 4 

Committee Votes ...................................................................................................... 5 

Oversight Findings and Recommendations ........................................................... 7 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 7 

Congressional Budget Office Estimate ................................................................... 7 

Federal Mandates Statement ................................................................................. 8 

Statement of General Performance Goals and Objectives .................................... 8 

Duplication of Federal Programs ............................................................................ 8 

Committee Cost Estimate ....................................................................................... 9 

Earmark, Limited Tax Benefits, and Limited Tariff Benefits ............................. 9 

Disclosure of Directed Rule Makings ..................................................................... 9 

Advisory Committee Statement .............................................................................. 9 

2 

1See EIA, Annual Energy Outlook 2017. 

2 U.S. dry natural gas production averaged 73.6 Bcf/d in 2017. See EIA, Short-Term Energy 

Outlook, July 12, 2018. EIA estimates that as of January 1, 2015, there were about 2,462 trillion 

cubic feet (Tcf) of technically recoverable resources of dry natural gas in the United States. At 

the rate of U.S. dry natural gas consumption in 2016 of about 27.5 Tcf per year, the United 

States has enough natural gas to last about 90 years. See EIA, Frequently Asked Questions. 3 In August 2017, total U.S. natural gas liquefaction capacity in the Lower 48 states increased 

to 2.8 billion cubic feet per day (Bcf/d) following the completion of the fourth liquefaction unit 

at the Sabine Pass LNG terminal in Louisiana. With increasing liquefaction capacity and utilization, U.S. LNG exports averaged 1.9 Bcf/d, and capacity utilization averaged 80% this year, 

based on data through November. See: EIA, Today in Energy, August 9, 2017 and December 7, 

2017. 4See EIA, U.S. Natural Gas Pipeline Exports and Liquefied U.S. Natural Gas Exports. 

Applicability to Legislative Branch ........................................................................ 9 

Section-by-Section Analysis of the Legislation ...................................................... 9 

Changes in Existing Law Made by the Bill, as Reported ..................................... 9 

Dissenting Views ..................................................................................................... 13 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Ensuring Small Scale LNG Certainty and Access 

Act’’. 

SEC. 2. SMALL SCALE EXPORTATION OR IMPORTATION OF NATURAL GAS. 

Section 3(c) of the Natural Gas Act (15 U.S.C. 717b(c)) is amended— 

(1) by striking ‘‘For purposes’’ and inserting ‘‘(1) For purposes’’; and 

(2) by adding at the end the following: 

‘‘(2) For purposes of subsection (a), and in addition to any importation or exportation of natural gas described in paragraph (1), importation or exportation of natural gas shall be deemed to be consistent with the public interest, and an application for such importation or exportation shall be granted without modification or 

delay, if— 

‘‘(A) the application for such importation or exportation proposes to import or 

export a volume of natural gas that does not exceed 0.14 billion cubic feet per 

day; and 

‘‘(B) the Commission’s approval of such application does not require an environmental impact statement or an environmental assessment under the National Environmental Policy Act of 1969.’’. 

PURPOSE AND SUMMARY

H.R. 4606, Ensuring Small Scale LNG Certainty and Access Act 

was introduced by Rep. Bill Johnson on December 12, 2017. H.R. 

4606 expedites the approval process for applications to import and 

export small quantities of natural gas that qualify for a categorical 

exclusion under the National Environmental Policy Act (NEPA). 

BACKGROUND AND NEED FOR LEGISLATION

American innovation and advancements in drilling technologies 

have allowed the United States to become the world’s leading producer of oil and gas, putting the nation on track to become a net 

energy exporter by 2026.1 Natural gas production is at an all-time 

high, and reserves are so large that they are predicted to meet domestic demand for almost a century.2 For 60 years, the U.S. has 

been a natural gas importer; however, with rising domestic production and relatively low prices, U.S. natural gas exports, including 

liquefied natural gas (LNG) exports, now exceed imports.3 While 

the U.S. has been exporting natural gas through pipelines for decades, the first large scale exports of LNG on ships began in 2016 

from the Sabine Pass export facility in Louisiana, followed by the 

Cove Point facility in Maryland in 2018.4 Four additional LNG exVerDate Sep 11 2014 06:28 Jul 21, 2018 Jkt 079006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR842.XXX HR842
3 

5See DOE, LNG Reports. Available at: https://energy.gov/fe/listings/lng-reports. 

6See Section 3 of the Natural Gas Act (15 U.S.C. §717b). 

7See DOE, LNG Export Studies. Available at: https://energy.gov/fe/downloads/lng-export-studies. 

port facilities are currently under construction, with an expected 

total capacity of 9.6 billion cubic feet per day (Bcf/d) by the end of 

2019. According to data compiled by the Department of Energy 

(DOE), the majority of LNG exports to date were delivered to customers in Latin America and Asia.5

The Department of Energy exercises jurisdiction over the import 

and export of natural gas, with authorities derived from section 3 

of the Natural Gas Act (NGA) and section 301(b) of the DOE Organization Act. Section 3(a) of the NGA sets forth the standard of review of most LNG export applications: 

[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] 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

Thus, section 3(a) creates a rebuttable presumption that a proposed export of natural gas is in the public interest. Section 3(c) 

creates a different standard of review for applications to export 

natural gas, including LNG, to countries with which the U.S. has 

in effect a free trade agreement (FTA) requiring the national treatment for trade in natural gas. Section 3(c) requires such applications to be deemed consistent with the public interest, and requires 

such applications to be granted without modification or delay. 

DOE’s review of applications to export LNG to non-FTA countries 

is conducted through a public process. While section 3(a) establishes a broad public interest standard and presumption favoring 

export authorizations, the statute does not define ‘‘public interest’’ 

or identify criteria that must be considered. In prior decisions, 

DOE has identified a range of factors that it evaluates when reviewing applications for export authorizations, including economic 

impacts, international impacts, security of natural gas supply, and 

environmental impacts, among others. In 2012 and again in 2015, 

DOE released studies to assess the macroeconomic impacts of LNG 

exports to inform the decisions on export applications.7 These studies generally conclude that LNG exports would provide positive net 

economic benefits to the U.S. 

On September 1, 2017, DOE issued a notice of proposed rulemaking to revise its regulations to provide for faster approval of 

small-scale exports of natural gas, including LNG. The U.S. smallscale LNG export market involves exports of small volumes of natural gas, primarily to countries in the Caribbean, Central America, 

and South America. The proposed rule provides that DOE, upon receipt of any complete application to export natural gas (including 

4 

8See EIA, Short-Term Energy Outlook. Released May 8, 2018. 

LNG) to non-free trade agreement countries, will grant the application provided that the application meets two criteria: the application proposes to export no more than 0.14 Bcf/day and the proposed 

export qualifies for a categorical exclusion under DOE’s NEPA regulations. For applications meeting these criteria, the exports are 

considered ‘‘small-scale natural gas exports’’ and are deemed to be 

in the public interest under the NGA. Exports of natural gas to 

free trade agreement countries are already deemed to be in the 

public interest under the Act. 

H.R. 4606 amends the NGA to provide DOE with authority to 

deem small-scale natural gas imports and exports consistent with 

the public interest and grant approval without modification or 

delay, provided that the application proposes to export no more 

than 0.14 Bcf/d, and the proposed exports does not require an environmental impact statement or an environmental assessment 

under NEPA. It is the Committee’s expectation that a proposed 

small-scale export must qualify for a categorical exclusion under 

NEPA in order to be considered for expedited treatment. DOE has, 

by regulation, determined that categorical exclusions do not individually or cumulatively have a significant effect on the environment. 

As the Committee’s legislative hearing record demonstrates, H.R. 

4606 would provide greater regulatory certainty and a clear timetable for moving forward with capital intensive projects that create 

American jobs. In testimony before the Committee, DOE Assistant 

Secretary Steven Winberg stated that H.R. 4606 would ‘‘have qualifying applications granted without modification or delay, saving 

several months of review time at a minimum.’’ Charlie Riedl, Executive Director of the Center for Liquefied Natural Gas, testified in 

support of the legislation on behalf of LNG producers, terminal operators, and developers. Mr. Riedl stated that ‘‘[a]dvancing this legislation will provide greater certainty in the permitting process for 

LNG facilities, thereby accelerating America’s rise as a world-class 

exporter of natural gas, creating U.S. jobs, growing our economy, 

significantly strengthening global energy security all while reducing emissions and pollution.’’ 

The Committee finds that applications to import and export 

small quantities of natural gas that also qualify for a categorical 

exclusion under NEPA are consistent with the public interest and 

should be granted without modification or delay. H.R. 4606 amends 

section (3c) of the NGA to achieve this objective, while preserving 

existing environmental laws and regulations. H.R. 4606 specifies 

that only applications for a volume of gas that does not exceed 0.14 

Bcf/day qualify for expedited treatment. To put this relatively small 

quantity in context, the Energy Information Administration (EIA) 

reports that U.S. dry natural gas production averaged 73.6 Bcf/day 

in 2017, and EIA forecasts dry natural gas production will average 

80.5 Bcf/d in 2018, establishing a new record.8

COMMITTEE ACTION

On January 19, 2018, the Subcommittee on Energy held a hearing on H.R. 4606 entitled ‘‘Legislation Addressing LNG Exports 

5 

and PURPA Modernization.’’ The Subcommittee received testimony 

from: • Steven Winberg, Assistant Secretary for Fossil Energy, Department of Energy; • James Danly, General Counsel, Federal Energy Regulatory 

Commission; • Charlie Riedl, Executive Director, Center for Liquefied 

Natural Gas; • Timothy Sparks, Vice President of Electric Grid Integration, CMS Energy; • Karl Ra ́bago Executive Director, Pace Energy and Climate 

Center; • Travis Kavulla, Vice Chairman, Montana Public Service 

Commission; and, • Paul Cicio, President, Industrial Energy Consumers of 

America. 

On April 18, 2018, the Subcommittee on Energy met in open 

markup session and forwarded H.R. 4606, without amendment, to 

the full Committee by a record vote of 19 yeas and 14 nays. On 

May 9, 2018, the full Committee on Energy and Commerce met in 

open markup session and ordered H.R. 4606, as amended, favorably reported to the House by a record vote of 35 yeas and 15 nays. 

COMMITTEE VOTES

Clause 3(b) of rule XIII requires the Committee to list the recorded votes on the motion to report legislation and amendments 

thereto. The following reflects the record votes taken during the 

Committee consideration: 

6 


Insert offset folio 10 here HR842.001

COMMITTEE ON ENERGY AND COMMERCE-- !15TH CONGRESS 

ROLL CALL VOTE# 66 

BILL: H.R. 4606, Ensuring Small Scale LNG Cer1ainty and Access Act 

AMENDMENT: A motion by Mr. Walden to order H.R. 4606 tavorably reported to the House, as amended. (Final 

Passage) 

DISPOSITION: AGREED TO, by a roll call vote of35 yeas and 15 nays 

REPRESENT A Tl NAYS PRESENT REPRESENTATIVE YEAS NAYS PRESENT 

Mr. Walden X Mr. Pallone X 

Mr. Barton X Mr. Rush X 

Mr. Upton X Ms. Eshoo X 

Mr. Shimkus X Mr. Engel 

Mr. Burgess X Mr. Green X 

Mrs. Blackburn Ms. DcGette X 

Mr. Scalise X Mr. Doyle X 

Mr. Latta X Ms. Schakowsky 

Mrs. McMon·is Rodgers X Mr. Butterfield X 

Mr.llarper X Ms. Matsui X 

Mr, Lance X Ms. Castor X 

Mr. Guthrie X Mr. Sarbanes X 

Mr. Olson X Mr. McNerney X 

Mr. McKinley X Mr. Welch X 

Mr. Kinzinger X Mr. Lujan X 

Mr. Grif1ith X Mr. Tonko X 

Mr. Bilirakis X Ms. Clarke X 

Mr. Johnson X Mr. Locbsaek X 

Mr. Long X Mr. Schrader X 

Mr. Bucshon X Mr. Kennedy X 

Mr. Flores X Mr. Cardenas 

Mrs. Brooks X Mr. Ruiz X 

Mr. Mullin X Mr. Peters X 

Mr. Hudson X Ms. Dingell X 

Mr. Collins 

Mr. Cramer X 

Mr. Walberg X 

Mrs. Walters X 

Mr. Costello X 

Mr. Cmier X 

Mr. Duncan X 

5/09/IS 
7 

OVERSIGHT FINDINGS AND RECOMMENDATIONS

Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of rule 

XIII, the Committee held a hearing and made findings that are reflected in this report. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

Pursuant to clause 3(c)(2) of rule XIII, the Committee finds that 

H.R. 4006 would result in no new or increased budget authority, 

entitlement authority, or tax expenditures or revenues. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII, the following is the cost 

estimate provided by the Congressional Budget Office pursuant to 

section 402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 23, 2018. 

Hon. GREG WALDEN, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4606, the Ensuring Small 

Scale LNG Certainty and Access Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Jeff LaFave. 

Sincerely, 

MARK P. HADLEY

(For Keith Hall, Director). 

Enclosure. 

H.R. 4606—Ensuring Small Scale LNG Certainty and Access Act 

H.R. 4606 would require the Department of Energy (DOE) to approve any application to export or import less than 0.14 billion 

cubic feet (bcf) of natural gas per day to or from any country with 

which the United States does not have an applicable free trade 

agreement (FTA). CBO expects that expediting those applications 

would reduce the time to approve them by several months, which 

could affect both the number of applications and the volume of gas 

exported and imported. 

Changes in the price of gas, in the level of production of gas on 

federal lands, or a combination of the two could change the payments associated with production on federal lands. (Those payments are recorded as decreases in direct spending.) CBO expects 

that any additional demand for gas exports under the bill would be 

met by a commensurate increase in supply, which would result in 

no significant change in the price of gas. In addition, CBO expects 

that any increase in the production of gas would probably occur in 

states that accounted for more than 80 percent of gas exports over 

the 2012–2016 period. Because those states, including Michigan, 

Texas, and New York, contain only small amounts of federal land 

(between 0.5 percent and 10 percent of the total land area in each 

8 

state), CBO estimates that any increase in the production of gas on 

federal lands would be small. 

Using information provided by DOE, CBO also estimates that expediting applications to import small quantities of gas would have 

negligible effects on the price and quantity of gas produced in the 

United States, primarily because the quantity of gas imported from 

non-FTA countries has been very small in recent years. Over the 

2013–2017 period, imports from those countries average 0.27 bcf 

per day (about 0.3 percent of the amount of gas produced domestically over that period). In addition, CBO expects that any effects 

from increased imports would probably be offset by the effects of 

increased exports. In 2017, imports from non-FTA countries totaled 

less than one-seventh of the amount of exports to those countries, 

and CBO expects that the United States will continue to be a net 

exporter to non-FTA countries over the next 10 years. 

Because enacting H.R. 4606 could affect direct spending, pay-asyou-go procedures apply. However, CBO estimates that any such 

effects would not be significant in any year. Enacting the bill would 

not affect revenues. 

CBO estimates that enacting H.R. 4606 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2029. 

H.R. 4606 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

On April 12, 2018, CBO transmitted a cost estimate for S. 1981, 

the Small Scale LNG Access Act of 2017, as ordered reported by 

the Senate Committee on Energy and Natural Resources on March 

8, 2018. The two bills contain similar provisions, and CBO’s estimates of their budgetary effects are the same. 

The CBO staff contact for this estimate is Jeff LaFave. The estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII, the general performance 

goal or objective of this legislation is to expedite the approval process for applications to import and export small quantities of natural gas that qualify for a categorical exclusion under NEPA. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3(c)(5) of rule XIII, no provision of H.R. 4006 

is known to be duplicative of another Federal program, including 

any program that was included in a report to Congress pursuant 

to section 21 of Public Law 111–139 or the most recent Catalog of 

Federal Domestic Assistance. 

9 

COMMITTEE COST ESTIMATE

Pursuant to clause 3(d)(1) of rule XIII, the Committee adopts as 

its own the cost estimate prepared by the Director of the Congressional Budget Office pursuant to section 402 of the Congressional 

Budget Act of 1974. 

EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the Committee 

finds that H.R. 5239 contains no earmarks, limited tax benefits, or 

limited tariff benefits. 

DISCLOSURE OF DIRECTED RULE MAKINGS

Pursuant to section 3(i) of H. Res. 5, the Committee finds that 

H.R. 4006 contains no directed rule makings. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 provides that the Act may be cited as the ‘‘Ensuring 

Small Scale LNG Certainty and Access Act.’’ 

Section 2. Small scale exportation or importation of natural gas 

Section 2 amends section 3(c) of the NGA to provide that applications for importation or exportation of natural gas shall be deemed 

to be consistent with the public interest and an application shall 

be granted without modification or delay, if the following two criteria are met: the application proposes to import or export a volume of natural gas that does not exceed 0.14 Bcf/day and the proposal qualifies for a categorical exclusion under NEPA regulations. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

NATURAL GAS ACT 

* * * * * * * 

10 

EXPORTATION OR IMPORTATION OF NATURAL GAS; LNG TERMINALS

SEC. 3. (a) After six months from the date on which this act takes 

effect no 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 Commission authorizing it to do so. The Commission shall issue such order 

upon application, unless, after opportunity for hearing, it finds that 

the proposed exportation or importation will not be consistent with 

the public interest. The Commission may by its order grant such 

application, in whole or in part, with such modification and upon 

such terms and conditions as the Commission may find necessary 

or appropriate, and may from time to time, after opportunity for 

hearing, and for good cause shown, make such supplemental order 

in the premises as it may find necessary or appropriate. 

(b) With respect to natural gas which is imported into the United 

States from a nation with which there is in effect a free trade 

agreement requiring national treatment for trade in natural gas, 

and with respect to liquefied natural gas— 

(1) the importation of such natural gas shall be treated as 

a ‘‘first sale’’ within the meaning of section 2(21) of the Natural 

Gas Policy Act of 1978; and 

(2) the Commission shall not, on the basis of national origin, 

treat any such imported natural gas on an unjust, unreasonable, unduly discriminatory, or preferential basis. 

(c) øFor purposes¿ (1) For purposes of subsection (a), the importation of the natural gas referred to in subsection (b), or the exportation of natural gas to a nation with which there is in effect a free 

trade agreement requiring national treatment for trade in natural 

gas, shall be deemed to be consistent with the public interest, and 

applications for such importation or exportation shall be granted 

without modification or delay. 

(2) For purposes of subsection (a), and in addition to any importation or exportation of natural gas described in paragraph (1), importation or exportation of natural gas shall be deemed to be consistent with the public interest, and an application for such importation or exportation shall be granted without modification or delay, 

if— 

(A) the application for such importation or exportation proposes to import or export a volume of natural gas that does not 

exceed 0.14 billion cubic feet per day; and 

(B) the Commission’s approval of such application does not 

require an environmental impact statement or an environmental assessment under the National Environmental Policy 

Act of 1969. 

(d) Except as specifically provided in this Act, nothing in this Act 

affects the rights of States under— 

(1) the Coastal Zone Management Act of 1972 (16 U.S.C. 

1451 et seq.); 

(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or 

(3) the Federal Water Pollution Control Act (33 U.S.C. 1251 

et seq.). 

(e)(1) The Commission shall have the exclusive authority to approve or deny an application for the siting, construction, expansion, 

or operation of an LNG terminal. Except as specifically provided in 

11 

this Act, nothing in this Act is intended to affect otherwise applicable law related to any Federal agency’s authorities or responsibilities related to LNG terminals. 

(2) Upon the filing of any application to site, construct, expand, 

or operate an LNG terminal, the Commission shall— 

(A) set the matter for hearing; 

(B) give reasonable notice of the hearing to all interested 

persons, including the State commission of the State in which 

the LNG terminal is located and, if not the same, the Governor-appointed State agency described in section 3A; 

(C) decide the matter in accordance with this subsection; and 

(D) issue or deny the appropriate order accordingly. 

(3)(A) Except as provided in subparagraph (B), the Commission 

may approve an application described in paragraph (2), in whole or 

part, with such modifications and upon such terms and conditions 

as the Commission find necessary or appropriate. 

(B) Before January 1, 2015, the Commission shall not— 

(i) deny an application solely on the basis that the applicant 

proposes to use the LNG terminal exclusively or partially for 

gas that the applicant or an affiliate of the applicant will supply to the facility; or 

(ii) condition an order on— 

(I) a requirement that the LNG terminal offer service to 

customers other than the applicant, or any affiliate of the 

applicant, securing the order; 

(II) any regulation of the rates, charges, terms, or conditions of service of the LNG terminal; or 

(III) a requirement to file with the Commission schedules or contracts related to the rates, charges, terms, or 

conditions of service of the LNG terminal. 

(C) Subparagraph (B) shall cease to have effect on January 1, 

2030. 

(4) An order issued for an LNG terminal that also offers service 

to customers on an open access basis shall not result in subsidization of expansion capacity by existing customers, degradation of 

service to existing customers, or undue discrimination against existing customers as to their terms or conditions of service at the facility, as all of those terms are defined by the Commission. 

(f)(1) In this subsection, the term ‘‘military installation’’— 

(A) means a base, camp, post, range, station, yard, center, or 

homeport facility for any ship or other activity under the jurisdiction of the Department of Defense, including any leased facility, that is located within a State, the District of Columbia, 

or any territory of the United States; and 

(B) does not include any facility used primarily for civil 

works, rivers and harbors projects, or flood control projects, as 

determined by the Secretary of Defense. 

(2) The Commission shall enter into a memorandum of understanding with the Secretary of Defense for the purpose of ensuring 

that the Commission coordinate and consult with the Secretary of 

Defense on the siting, construction, expansion, or operation of liquefied natural gas facilities that may affect an active military installation. 

(3) The Commission shall obtain the concurrence of the Secretary 

of Defense before authorizing the siting, construction, expansion, or 

12 

operation of liquefied natural gas facilities affecting the training or 

activities of an active military installation. 

* * * * * * * 

(13) 

1Department of Energy, Long Term Applications Received by DOE/FE to Export Domestically 

Produced LNG from Lower-48 States (Jun. 26, 2018) (www.energy.gov/sites/prod/files/2018/06/ 

f53/Summary%20of%20LNG%20Export%20Applications_0.pdf). 2DOE includes authorizations for export of compressed natural gas in this estimate. 

3Department of Energy, Small-Scale Natural Gas Exports, 82 Fed. Reg. 41570 (Sept. 1, 2017) 

(proposed rule). 4DOE may determine that an application qualifies for a categorical exclusion from the preparation or adoption of an environmental impact statement or environmental assessment under 

NEPA. DOE’s list of categorical exclusions can be found at 10 CFR part 1021.410, appendices 

A and B. 5See Department of Energy, Small-Scale Natural Gas Exports, 82 Fed. Reg. 41570 at 41573 

(Sept. 1, 2017). 6Office of Management and Budget, Office of Information and Regulatory Affairs, View Rule— 

Small-Scale Natural Gas Exports (Section 610 Review) (www.reginfo.gov/public/do/ 

eAgendaViewRule?publd=201804&RIN=1901-AB43) (accessed Jul. 12, 2018). 

DISSENTING VIEWS 

Since 2011, companies have filed more than 50 applications with 

the Department of Energy (DOE) to export liquefied natural gas 

(LNG). To date, DOE has granted final authorizations for LNG exports to non-Free Trade Agreement (FTA) countries on 29 applications.1 The approved applications authorize the export of 21.35 billion cubic feet per day (Bcf/d) of natural gas to non-FTA countries,2

and the pending applications collectively seek to export an additional 32.68 Bcf/d of LNG. 

In 2017, DOE proposed a rule to expedite approval of ‘‘smallscale natural gas exports.’’ 3 The rule would deem small-scale exports to non-FTA countries to be in the public interest, so long as 

applications propose to export LNG at a volume of not more than 

0.14 Bcf/d and DOE’s approval of the application would not require 

an environmental review under the National Environmental Policy 

Act (NEPA).4 DOE will grant applications meeting the criteria on 

an expedited basis, without the need for notice or comment. DOE 

asserts ‘‘this proposed rule, and the 45-day comment period for this 

proposed rule, would constitute the notice and opportunity for hearing on all prospective small-scale natural gas export applications.’’ 5

The small-scale LNG rule was expected to be finalized in May.6

ANALYSIS OF H.R. 4606

H.R. 4606 amends NGA section 3(c) to deem applications for ‘‘importation or exportation of a volume of natural gas that does not 

exceed 0.14 billion cubic feet per day’’ to be in the public interest. 

A project must also qualify for a NEPA categorical exclusion to 

take advantage of the bill’s provisions. 

This bill is ostensibly intended to codify DOE’s small-scale LNG 

rule; however, proponents have not justified the need for swift Congressional action on a proposed rule that is in the process of being 

finalized. There are drawbacks to codifying a proposed rule with 

such a prescriptive volume requirement. For example, should the 

circumstance arise where exporting 0.14 Bcf/d of LNG is no longer 

in the public interest, then Congress would have to enact a new 

14 

7Sierra Club, Comments on the Department of Energy’s proposed ‘‘Small-Scale Natural Gas 

Exports’’ (Oct. 16, 2017) (www.regulations.gov/document?D=DOE-HQ-2017-0018-0077); Industrial Energy Consumers of America, Comments on the Department of Energy’s proposed ‘‘SmallScale Natural Gas Exports’’ (Oct. 16, 2017) (www.regulations.gov/document?D=DOE-HQ-2017- 

0018-0065). 8 Christine Shearer et al, Enviromnental Research Letters, The effect of natural gas supply 

on US renewable energy and C02 emissions (Sept. 24, 2014) (iopscience.iop.org/article/10.1088/ 

1748-9326/9/9/094008). 9 Alexander Q. Gilbert and Benjamin K. Sovacool, Energy, US liquefied natural gas (LNG) exports: Boom or bust for the global climate? (Dec. 15, 2017) (doi.org/10.1016/j.energy.2017.11.098). 10 Ramon Alvarez, et al., Science, Assessment of methane emissions from the U.S. oil and gas 

supply chain (Jun. 21, 201) (science.sciencemag.org/content/early/2018/06/20/science.aar7204); 

The Natural Gas Industry Has a Leak Problem, New York Times (Jun. 21, 2018) 

(www.nytimes.com/2018/06/21/climate/methane-leaks.html?smid=tw-nytclimate&smtyp=cur). 

law to make any changes. And, based on DOE’s requests for public 

input on the appropriate volume limit for a small-scale application, 

there is more than a remote likelihood that the volume limit of 0.14 

Bcf/d could change in DOE’s final rule. 

The policy goals and priorities of the proposed small-scale LNG 

rule are also concerning. It declares that all small-scale exports are 

always in the public interest, and removes longstanding consumer 

protections. It also prevents the public from having an opportunity 

to know about or provide input on export proposals and violates the 

public hearing requirements of the NGA. Most importantly, there 

continues to be no justification for any of these changes to the existing approval process.7

Significantly, the proposal fails to prevent applicants from using 

this new process to evade the public interest determinations required for large-scale exports. Because there is no limit on the 

number of small-scale applications an entity can have, an applicant 

could skirt requirements for larger exports by segmenting a proposal into smaller pieces. 

An unrestricted export policy could lead to even higher levels of 

LNG exports, which could have significant impacts on domestic 

natural gas prices and adversely affect American consumers and 

manufacturers. Unfettered exports would exacerbate climate 

change by incenting widespread fossil fuel extraction and displacing carbon-free sources of power.8 High methane leak rates and 

increased demand would likely offset any climate benefits associated with natural gas use.9 To undertake such a policy at a time 

when the methane pollution level from U.S. oil and gas operations 

‘‘could warm the planet as much as coal in the short term’’ is completely reckless.10

CONCLUSION

Ultimately, H.R. 4606 is a bill in search of a problem. It would 

prematurely and unnecessarily enshrine a Trump Administration 

pro-fossil fuel proposed rule into law. Approving another bill to expand natural gas exports would incent widespread fossil fuel extraction and higher domestic natural gas prices, with serious climate, public health, and economic consequences for American consumers and manufacturers. 

15 

For the reasons stated above, we dissent from the views contained in the Committee’s report. 

FRANK PALLONE, Jr., 

Ranking Member. 

BOBBY RUSH, Ranking Member, 

Subcommittee on Energy. 

Æ