CRS Report for Congress

Prepared for Members and Committees of Congress 

U.S. Natural Gas Exports: 

New Opportunities, Uncertain Outcomes 

Michael Ratner 

Specialist in Energy Policy 

Paul W. Parfomak 

Specialist in Energy and Infrastructure Policy 

Ian F. Fergusson 

Specialist in International Trade and Finance 

Linda Luther 

Analyst in Environmental Policy 

September 17, 2013 

Congressional Research Service 

7-5700 

www.crs.gov 

R42074 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 

Summary 

As estimates for the amount of U.S. natural gas resources have grown, so have the prospects of 

rising U.S. natural gas exports. The United States is expected to go from a net importer of natural 

gas to a net exporter by 2020. Projects to export liquefied natural gas (LNG) by tanker ship have 

been proposed—cumulatively accounting for about 41.4% of current gross U.S. natural gas 

production—and are at varying stages of regulatory approval. Projects require federal approval 

under Section 3 of the Natural Gas Act (15 U.S.C. §717b), with the U.S. Department of Energy’s 

Office of Fossil Energy and the Federal Energy Regulatory Commission being the lead 

authorizing agencies. Pipeline exports, which accounted for 98% of all exports of U.S. produced 

natural gas in 2012, are also likely to continue rising. 

What effect exporting natural gas will have on U.S. prices is a central question in the debate over 

whether to export. A significant rise in U.S. natural gas exports would likely put upwards pressure 

on domestic prices, but the magnitude of any rise is currently unclear. There are numerous factors 

that will affect prices: export volumes, economic growth, differences in local markets, and 

government regulations, among others. With recent natural gas prices relatively low compared to 

global prices and historically low for the United States, producers are looking for new markets for 

their natural gas. Producers contend that increased exports will not raise prices significantly as 

there is ample supply to meet domestic demand, and there will be the added benefits of increased 

revenues, trade, and jobs, and less flaring. Consumers of natural gas, who are being helped by the 

low prices, fear prices will rise if natural gas is exported. 

Electric power generation represents potentially the greatest increase in natural gas consumption 

in the U.S. economy, primarily for environmental reasons. Natural gas emits much less carbon 

dioxide and other pollutants than coal when combusted. Other types of consumption are not likely 

to increase natural gas demand domestically for a long time. Use in the transportation sector to 

displace oil is likely to be small because expensive new infrastructure and technologies would be 

required. There is discussion of a possible revival of the U.S. petrochemicals sector, but the 

potential extent of a change is unclear. 

Getting natural gas to markets where it can be consumed, whether domestically or internationally, 

may be the industry’s biggest challenge. Infrastructure constraints, environmental regulations, and 

other factors will influence how the market adjusts to balance supply and demand. 

Environmental groups are split regarding natural gas use, with some favoring increased use to 

curb emissions of certain pollutants, while others oppose expanded use of natural gas because it is 

not as clean as renewable forms of energy, such as wind or solar. The use of hydraulic fracturing 

to produce shale gas has also raised concerns among environmental groups particularly concerned 

with its possible impacts on water quality. 

The possibility of a significant increase in U.S. natural gas exports will factor into ongoing 

debates on the economy, energy independence, climate change, and energy security. As the 

proposed projects continue to develop, policymakers are likely to receive more inquiries about 

these projects. Proposals to expedite and expand LNG exports have been raised in the 113th

Congress, including in S. 192 and H.R. 580. Two other bills, H.R. 1189 and H.R. 1191, would 

reform the DOE’s process for determining the public interest regarding LNG exports and prohibit 

exports of natural gas produced on federal lands. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 

Contents 

Introduction: Things Have Changed ................................................................................................ 5

Background: Natural Gas Exports Are Not New ............................................................................. 6

U.S. Natural Gas Exports to Date .................................................................................................... 9

Pipeline Exports Increase ........................................................................................................ 10

LNG Activity on the Move ...................................................................................................... 11

LNG Re-Exports: A Temporary Fix .................................................................................. 11

Exports of Domestically Produced Natural Gas as LNG .................................................. 11

Trade: Agreements or Disagreements? .............................................................................. 14

The Global LNG Market................................................................................................................ 15

Authorizations to Export LNG ...................................................................................................... 17

DOE and the Public Interest Determination ............................................................................ 18

Compliance with NEPA and Additional Environmental Laws ................................................ 19

New Sources of Natural Gas: The Game Changer ........................................................................ 22

Projected Future Growth ......................................................................................................... 23

Natural Gas Liquids: A Production Driver .............................................................................. 24

Congressional Actions and Considerations .................................................................................... 24

Issues and Interests .................................................................................................................. 25

Figures 

Figure 1. U.S. Natural Gas Production, Consumption, and Trade ................................................... 7

Figure 2. Select Global Natural Gas Prices ..................................................................................... 8

Figure 3. Annual U.S. Natural Gas Prices, 1990-2040 .................................................................... 9

Figure 4. U.S. Natural Gas Exports ............................................................................................... 10

Figure 5. Actual and Projected LNG Production Capacity ............................................................ 16

Figure 6. Natural Gas Resources and Reserves ............................................................................. 23

Figure 7. Projected U.S. Natural Gas Production .......................................................................... 24

Figure A-1. Select U.S. Natural Gas Import and Export Infrastructure ......................................... 28

Figure C-1. Natural Gas Hub and City Gate Prices ....................................................................... 30

Tables 

Table 1. Proposed North American LNG Export Projects ............................................................. 12

Table B-1. 2012 U.S. Supply and Demand Balances..................................................................... 29

Appendixes 

Appendix A. Select U.S. Natural Gas Import and Export Infrastructure ....................................... 28
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 

Appendix B. Supply/Demand Balance .......................................................................................... 29

Appendix C. Natural Gas Hub Map ............................................................................................... 30

Contacts 

Author Contact Information........................................................................................................... 31

Acknowledgments ......................................................................................................................... 31
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 5 

Introduction: Things Have Changed 

The United States has exported natural gas for close to 100 years, but has generally exported less 

than it has imported (mostly from Canada).1

 Within the next five years, the United States may 

become a much larger exporter of natural gas, particularly liquefied natural gas (LNG), for the 

first time. Increased development of U.S. natural gas resources—primarily shale gas—along with 

low domestic prices in recent years and idle LNG import infrastructure, have driven the change in 

the U.S. position. As recently as the mid-to-latter 2000s, the United States was projected to be a 

growing natural gas importer. However, imports have been declining since 2005, while exports 

have been climbing. 

U.S. natural gas exports require federal approval pursuant to Section 3 of the Natural Gas Act 

(NGA) (15 U.S.C. §717b), with the U.S. Department of Energy’s (DOE) Office of Fossil Energy 

and the Federal Energy Regulatory Commission (FERC) being the lead authorizing agencies. 

Historically, exports have been primarily via pipeline to Mexico and eastern Canada, but natural 

gas companies are now considering exporting greater quantities of U.S. LNG by tanker ship to a 

number of other countries. From 1969 to 2012, the United States exported Alaskan LNG almost 

exclusively to Japan, but the volumes of those shipments have been relatively small. Furthermore, 

Alaska’s natural gas market has been, and continues to be, isolated from the rest of the United 

States. The prospect of the United States supplying a global market with large quantities of LNG 

from the lower 48 states raises concerns in Congress, particularly about a potential rise in what 

U.S. consumers pay for natural gas and effects on the economy.2

 

Developers of natural gas export projects and natural gas producers argue that domestic gas prices 

will not rise much, or significantly, if U.S. natural gas exports increase because the United States 

has ample gas resources to meet domestic demand. Further, they argue there will be economic 

benefits such as increased employment and an improved trade balance. Other stakeholders 

disagree, fearing that such exports could cause domestic natural gas prices to rise thereby hurting 

the economy. Some environmental groups fear that increased exports will cause more shale gas 

production, which they are against. DOE has used the results of two studies it commissioned 

about the impact on domestic gas prices of exports and the effect on the U.S. economy to justify 

the approval of projects. 

U.S. natural gas prices are lower than those in other international markets, partly because of the 

competitive nature of the U.S. market. Nevertheless, natural gas prices within the United States 

vary by regional market because of transportation limitations, access to supplies, and differences 

in demand. As new volumes of shale gas are developed, these supplies will seek markets where 

little or no natural gas production has existed in the past. Over time, the U.S. natural gas market 

will reconfigure itself to balance supply and demand regionally and nationally. But getting new 

natural gas supplies to market may be an ongoing challenge for the industry, whether within the 

United States or abroad. Infrastructure constraints, such as the availability of pipelines, 

 

1

 CRS held a seminar on LNG exports on March 1, 2013, for congressional staff. The seminar video is available for 

staff on the CRS website, http://www.crs.gov/programs/Pages/RecordedEventDetail.aspx?PRODCODE=WRE00058. 

2

 Exports of natural gas from Alaska are viewed differently as those resources are isolated from the rest of the U.S. 

market because natural gas prices in the lower 48 do not justify building the required infrastructure to transport natural 

gas via pipeline or as LNG. Additionally, there may not be any, Jones Act-compliant LNG tankers to transport natural 

gas to the market in the lower 48 states. In DOE’s analysis of U.S. LNG exports, it has not factored LNG exports from 

Alaska into its analysis regarding impacts on the U.S. economy and domestic prices. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 6 

environmental regulations, and other regulatory requirements will play a part in how the natural 

gas market adjusts. Exports of natural gas either by pipeline or as LNG will be a factor as the 

market seeks balance, especially on a regional basis. Hence the potential export of more U.S. 

natural gas may have economic effects that vary significantly from region to region, and regional 

impacts may diverge from impacts on the nation as a whole. 

Other issues have also been raised regarding natural gas exports. Environmental groups are 

divided on the desirability of greater use of natural gas at home and abroad. Advocates see it as 

reducing emissions compared to other hydrocarbons, whereas opponents point out that natural gas 

still emits carbon dioxide and other pollutants. Concerns about contamination of water supplies 

during gas production have been raised because of the use of hydraulic fracturing (“fracking”), 

the technique for extracting shale gas which uses water, sand, and chemicals to create fissures in 

shale, allowing the trapped natural gas to be cost-effectively extracted.3

 Other groups want to see 

greater use of natural gas in the U.S. economy for economic and national security concerns before 

it is exported overseas.4

The prospect of growing U.S. natural gas exports, particularly LNG, portends to be a factor as 

Congress debates the economy, energy independence, climate change, and energy security. Bills 

to expedite and expand LNG exports have been introduced in the 113th Congress, including S. 

192 and H.R. 580. Two other bills, H.R. 1189 and H.R. 1191, would reform the DOE’s process 

for determining the public interest regarding LNG exports and prohibit exports of natural gas 

produced on federal lands. This report examines what has changed in the U.S. natural gas market 

and the prospects and implications of the United States becoming a significant net natural gas 

exporter. 

Background: Natural Gas Exports Are Not New 

Heading into the 2000s, the United States was expected to be a growing importer of natural gas 

because domestic production was declining and demand was rising (see Figure 1). The U.S. 

Energy Information Administration (EIA) in its 1999 Annual Energy Outlook forecasted that net 

natural gas imports would grow between 1997 and 2020 from 12.9% of consumption to 15.5%, 

based on consumption growing faster than production.5

 To accommodate the potential increase in 

imports, five new LNG import terminals were built by industry in the latter half of the 2000s and 

some existing facilities were re-commissioned and expanded. The United States currently has 

LNG import capacity of almost 14 billion cubic feet per day (bcf/d) or over five trillion cubic feet 

(tcf) per year. However, higher domestic production—mainly from shale gas development—has 

made imports largely unnecessary, leaving existing import capacity mostly idle. (See Table B-1

for the U.S. supply and demand balance.) In its Annual Energy Outlook 2013 Early Release, EIA 

projects that the United States will be a net LNG exporter by 2016 and a net natural gas exporter 

by 2020.6

 

3

 For additional information and analysis of shale gas and fracking see CRS Report R41760, Hydraulic Fracturing and 

Safe Drinking Water Act Regulatory Issues, by Mary Tiemann and Adam Vann. 

4

 For additional information about natural gas and the U.S. economy see CRS Report R42814, Natural Gas in the U.S. 

Economy: Opportunities for Growth , by Robert Pirog and Michael Ratner 

5

 U.S. Energy Information Administration (EIA), Annual Energy Outlook 1999 with Projections to 2020, DOE/EIA0383(99), Washington, DC, December 1998, p. 71, http://www.eia.gov/oiaf/archive/aeo99/pdf/0383(99).pdf. 

6

 U.S. Energy Information Administration, Annual Energy Outlook 2013 Early Release, DOE/EIA-0383ER(2013), 

(continued...) 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 7 

The abundance of new domestic natural gas supplies shifted industry interest from building LNG 

import terminals to constructing LNG export terminals. As of September 2013, there have been 

31 applications for permits to construct liquefaction facilities at existing LNG import terminals 

(also known as regasification facilities) or for new LNG export facilities in order to export 

domestically produced natural gas as LNG. (See Table 1.) The total capacity proposed is 

approximately 33.8 bcf/d. Additionally, seven companies have active permits and one other has 

been approved to re-export LNG cargos (take in foreign cargos, hold in storage, and then reload 

onto LNG tankers to go to foreign markets) from import terminals. Increased pipeline exports to 

Canada7

 and Mexico may also continue to rise if their domestic demand continues to increase. 

Figure 1. U.S. Natural Gas Production, Consumption, and Trade 

Historical and Projected Data 

Source: EIA natural gas databases, http://www.eia.doe.gov/naturalgas/data.cfm, and EIA’s Annual Energy Outlook 

2013 Early Release, Natural Gas Section, reference case, http://www.eia.gov/oiaf/aeo/tablebrowser/. 

Notes: Consumption equals Production, Net Imports, and Storage, but because of negative storage numbers for 

injection of natural gas into facilities the Consumption line in the graph does not exactly align with the sum of its 

parts. Exports of natural gas include the re-export of LNG cargos that comprise third-country natural gas 

supplies. Units are billion cubic feet (bcf) per year. Historical data are from 2011 and earlier. 

Low U.S. natural gas prices relative to other international markets have spurred interest in 

exporting U.S. produced natural gas (see Figure 2). What effect exporting natural gas will have 

on U.S. prices and the overall U.S. economy are central questions in the debate over whether to 

export. DOE commissioned two studies as part of its evaluation of whether LNG exports to nonfree-trade-agreement (non-FTA) countries are in the public interest (see “DOE and the Public 

Interest Determination”). 

 

(...continued) 

Washington, DC, December 5, 2012, http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2013ER&subject=8-

AEO2013ER&table=13-AEO2013ER®ion=0-0&cases=early2013-d102312a. 

7

 For additional information on the U.S.-Canada energy relationship see CRS Report R41875, The U.S.-Canada Energy 

Relationship: Joined at the Well, by Paul W. Parfomak and Michael Ratner. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 8 

Figure 2. Select Global Natural Gas Prices 

Nominal dollars 

Source: BP Statistical Review of World Energy, 2013, June 2013, p. 27. http://www.bp.com/sectionbodycopy.do?

categoryId=7500&contentId=7068481. 

Notes: The German Border Price is a proxy for European oil indexed prices. Units = U.S. dollar per million 

British thermal units (MBtu). NBP is the market price in the United Kingdom referred to as the National 

Balancing Point. 

The most recent EIA projections show the United States becoming a net LNG exporter in 2016 

and an overall net natural gas exporter in 2020. The price projections, which extend to 2040, 

never reach the annual average high reached in 2008 (see Figure 3). 

Lower natural gas prices since 2008 along with a large and growing resource base have prompted 

calls for greater use of natural gas in the U.S. fuel mix. This is one of the key arguments against 

exporting U.S. natural gas. Natural gas comprised about 30% of U.S. primary energy 

consumption last year and has averaged 24% per year since 1973. Instead of exporting U.S. 

natural gas, some say, the United States should increase use of natural gas in the electric power 

sector to displace coal, as an alternative transportation fuel to displace oil, and to provide fuel and 

feedstock to domestic industries such as petrochemicals. Some transition to natural gas is already 

occurring, particularly in the electric power sector.8

 

8

 For additional information about natural gas in electrical power generation, see CRS Report R42950, Prospects for 

Coal in Electric Power and Industry, by Richard J. Campbell, Peter Folger, and Phillip Brown. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 9 

Figure 3. Annual U.S. Natural Gas Prices, 1990-2040 

Nominal dollars 

Source: EIA’s natural gas price database, http://www.eia.gov/dnav/ng/hist/n9190us3a.htm and EIA’s Annual 

Energy Outlook 2013 Early Release, Natural Gas Section, reference case, http://www.eia.gov/oiaf/aeo/

tablebrowser/. 

Notes: Prices reflect the average price at the wellhead in the lower 48. Projections are for 2011 forward. Units 

are dollars per thousand cubic feet ($/1,000 cu ft) in 2009 dollars. 

U.S. Natural Gas Exports to Date 

Total U.S. natural gas exports are relatively small but have grown since 1999, increasing more 

than nine-fold through 2012. The United States has been exporting natural gas since at least the 

1930s, primarily to Canada and Mexico.9

 In 2012, 98% of exports were by pipeline to Canada 

and Mexico. Starting in 1969, a small amount of natural gas was also exported as LNG via the 

Kenai LNG terminal in Nikiski, Alaska. Kenai LNG operated continuously from its opening until 

its idling in 2012, and remains the only LNG export facility in North America. Production of 

natural gas in the Cook Inlet of Alaska that supplies natural gas to Kenai LNG has declined too 

much to keep the facility operating.10

In 2010, the United States, through DOE’s Office of Fossil Energy, allowed LNG import 

terminals to receive cargos of LNG, store the LNG, and to re-export the LNG to international 

markets. Seven companies have received permits to re-export LNG with four pending. This 

explains the “Other LNG” category that emerged in 2010 (see Figure 4). Prior to 2010, LNG 

exports had declined steadily since 2005. Growing U.S. natural gas production, primarily from 

shale gas, has decreased the demand for both pipeline imports and LNG imports, leaving the 

import terminals mostly idle. Additionally, eight of the import terminals have applied for licenses 

to construct liquefaction facilities to export domestically produced LNG, while there are 23 

 

9

 Data are unavailable earlier than the 1930s and distinguished by country since the 1950s. 

10 The facility has not been dismantled, but is being maintained. It is possible that the facility could reopen if Alaskan 

natural gas production increases in the future. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 10 

applications for new liquefaction facilities, including floating facilities (see Table 1). In some 

cases companies that have partnered in a facility have both applied for licenses, but the volumes 

are only included once in DOE’s data. 

Figure 4. U.S. Natural Gas Exports 

1980-2012 

Source: EIA natural gas exports database, http://www.eia.doe.gov/dnav/ng/ng_move_expc_s1_a.htm. 

Notes: LNG exports by volume are negligible to other countries besides Japan. Other LNG includes volumes 

that are re-exported from the United States after being imported from third countries. Units are billion cubic 

feet (bcf) per year. 

Pipeline Exports Increase 

Natural gas exports by pipeline have risen since 1999, increasing over 16 times through 2012 and 

accounting for about 98% of total natural gas exports last year. Canada and Mexico, both free 

trade partners, are the only recipients of U.S. natural gas exports by pipeline. As countries with 

which the United States has free trade agreements (FTAs), exports of natural gas to both are 

assumed to be in the national interest by statute, thereby expediting the approval process for 

projects. The St. Clair, MI, transit point to Canada and the Roma, TX, transit point to Mexico are 

the busiest for U.S. natural gas exports (see Figure A-1). 

Gross exports to Canada and Mexico have both increased since 1999, growing 25-fold and 10-

fold, respectively. In 2012, Mexico’s imports jumped almost 25% over the previous year. 

Facilitated by the 1994 North American Free Trade Agreement, new cross border natural gas 

pipelines have expedited the trade. Canadian natural gas production has declined almost 17% 

since peaking in 2002, but still remains above the level of Canadian consumption. Some of 

Canada’s imports of natural gas from the United States are from gas produced in Canada’s 

western provinces, imported into the United States, and re-exported to Canada’s eastern 

provinces. This is a cost-effective way to transport the natural gas given pipeline constraints 

within Canada. Mexican natural gas consumption has increased about 80% since 2002, growing 

more than production. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 11 

LNG Activity on the Move 

U.S. LNG exports started in 1969 with the opening of the Kenai LNG export terminal in Nikiski, 

Alaska. Japan, the world’s largest LNG importer in 2011, received almost 100% of U.S. LNG 

exports until recent years. The project has not been expanded from its inception and remains the 

only U.S. LNG export facility. From 2005 to 2010, exports from Kenai LNG declined almost 

50% due to depletion of its natural gas supply. The facility is being maintained, but no gas is 

flowing through it. 

LNG Re-Exports: A Temporary Fix 

Starting in 2010, DOE’s Office of Fossil Energy, according to provisions in the Natural Gas Act, 

authorized LNG import terminals to receive LNG cargos from foreign countries and then reexport the LNG to other countries. Some LNG exporters try to take advantage of the idle U.S. 

import terminals and storage to wait for higher world prices. This trend almost doubled U.S. LNG 

exports to other countries, including new recipients Brazil, India, Spain, and the United Kingdom. 

Using the facilities for re-export helps maintain their operating capabilities in light of 

significantly decreased use to import LNG. Currently, seven companies have received permission 

to re-export LNG cargos from foreign countries with four applications pending.11

In order to re-export LNG, minimal or no additional equipment may need to be added to an 

import terminal. As mentioned above, DOE’s Office of Fossil Energy must approve the change as 

does FERC. 

Exports of Domestically Produced Natural Gas as LNG 

There have been 31 applications for permits to export domestically produced natural gas as LNG, 

with a cumulative capacity of almost 12,344 billion cubic feet (bcf) per year or almost 50% of 

current U.S. production.12 Eight of these liquefaction projects plan to adapt an existing LNG 

import terminal for export, which would require construction of liquefaction facilities at the 

import terminals, a major financial investment, with cost estimates ranging from $6 billion to $10 

billion per terminal, mostly depending on capacity size. The other projects would construct new 

LNG export terminals, costing in the range of $20 billion each. Almost all the projects have 

received approval to export to free trade countries, but only the Sabine Pass Liquefaction (only its 

first application), Freeport LNG Expansion (only its first application), Lake Charles, and 

Dominion Cove Point projects have received DOE approval to export U.S. produced natural gas 

to non-free-trade countries.13 Of the FTA countries, only Canada, Chile, Dominican Republic, 

Mexico, and South Korea have existing LNG import terminals. South Korea is the second-largest 

importer of LNG globally. 

 

11 Department of Energy, Office of Fossil Energy, Status of Short-Term Applications to Export Previously Imported 

LNG, March 5, 2013, http://fossil.energy.gov/programs/gasregulation/reports/Previously_Imported_LNG.pdf. 

12 DOE, Office of Fossil Energy, Authorizations Database, Washington, DC, January 30, 2013, http://fossil.energy.gov/

programs/gasregulation/reports/summary_lng_applications.pdf. 

13 Free Trade Agreement countries that require national treatment include Australia, Bahrain, Canada, Chile, 

Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Peru, 

Singapore, and South Korea. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

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Table 1. Proposed North American LNG Export Projects 

 Status 

Company Location 

Volume 

(bcf/d) 

DOE 

FTA/non-FTA 

FERC/ 

MARAD Construction 

Sabine Pass 

Liquefaction 

Louisiana 2.2 Approved/Approved Approved Approved 

Freeport LNG 

Expansion and FLNG 

Liquefactiona

Texas 1.4 plus 

1.4 

Approved/Approved 

Approved/Pending 

Pending 

Lake Charles Exportsb Louisiana 2.0 Approved/Approved Pending 

Carib Energyc Not 

Applicable 

0.03 to 

FTA 

0.01 to 

non-FTA 

Approved/Pending 

Dominion Cove Point 

LNG 

Maryland 1.0 Approved/Approved Pending 

Jordan Cove Energy 

Project 

Oregon 1.2 to FTA 

0.8 to 

non-FTA 

Approved/Pending Pending 

Cameron LNG Louisiana 1.7 Approved/Pending Pending 

Gulf Coast LNG 

Export 

Texas 2.8 Approved/Pending 

Gulf LNG Liquefaction Mississippi 1.5 Approved/Pending 

LNG Development 

Company (Oregon 

LNG) 

Oregon 1.25 Approved/Pending Pending 

SB Power Solutionsc Not 

Applicable 

0.07 Approved/Not Applicable 

Southern LNG 

Company 

Georgia 0.5 Approved/Pending Pending 

Excelerate Liquefaction 

Solutions 

Texas 1.38 Approved/Pending Pending 

Golden Pass Products Texas 2.6 Approved/Pending Pending 

Cheniere Marketing Texas 2.1 Approved/Pending Pending 

Main Pass Energy Hubd Offshore 

Louisiana 

3.22 Approved/Not Applicable 

CE FLNG Louisiana 1.07 Approved/Pending Pending 

Waller LNG Services Louisiana 0.16 Approved/Not Applicable 

Pangea LNG (North 

America) Holdings 

Texas 1.09 Approved/Pending 

Magnolia LNG Louisiana 0.54 Approved/Not Applicable Pending 

Trunkline LNG Exportb Louisiana 2.0 Approved/Pending Pending 

Gasfin Development 

USA 

Louisiana 0.2 Approved/Not Applicable 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 13 

 Status 

Company Location 

Volume 

(bcf/d) 

DOE 

FTA/non-FTA 

FERC/ 

MARAD Construction 

Freeport-McMoRan 

Energyd

Offshore 

Louisiana 

3.22 Approved/Pending 

Sabine Pass 

Liquefactione

Louisiana 0.28 Approved/Pending 

Sabine Pass 

Liquefactione

Louisiana 0.28 Approved/Pending 

Venture Global LNG Louisiana 0.67 Pending/Pending 

Advanced Energy 

Solutionsc

Florida 0.02 Pending/Not Applicable 

Argent Marinec NA 0.003 Pending/Not Applicable 

Eos LNGd

 Texas 1.6 Pending/Pending 

Barca LNGd

 Texas 1.6 Pending/Pending 

Source: Department of Energy, Office of Fossil Energy, Natural Gas Regulatory Responsibilities databases, 

http://fossil.energy.gov/programs/gasregulation/reports/summary_lng_applications.pdf. 

Notes:

a. DOE received a new application from FLEX to add 1.4 bcf/d of capacity at the Freeport LNG terminal for 

both FTA and non-FTA countries. 

b. Lake Charles Exports and Trunkline LNG Export have both filed to export LNG from the Lake Charles 

Terminal. The 2.0 bcf/d volumes are not additive. 

c. Project will use cryogenic containers to export LNG in small amounts on cargo ships and does not need a 

specialized export terminal like the other projects. 

d. Main Pass Energy Hub, LLC (LCE) and Freeport McMoRan Energy LLC (FME) have both filed to export 

from the Main Pass Energy Hub. The 3.22 bcf/d volumes are not additive and only FME includes exports to 

non-FTA countries. As an offshore facility project, these companies have applied to the Maritime 

Administration (MARAD), which improves offshore facilities instead of FERC. 

e. This is an expansion of the Sabine Pass Liquefaction project at the top of the table. 

Adding liquefaction capacity will require new infrastructure to be added to the existing import 

terminals. The modification or expansion of existing facilities, including liquefaction trains, 

storage tanks, compressors, piping, and other equipment, will require authorization from FERC. 

Depending on the nature of individual facility modifications, compliance with additional state or 

federal statutory or regulatory requirements may also be required. For example, facility 

modifications would be subject to some level of environmental review pursuant to the National 

Environmental Policy Act (NEPA). Potential regulatory requirements are discussed below (see 

“Authorizations to Export LNG”). 

Natural gas in Alaska is also attracting attention as a possible source for exports. The cost of 

producing and transporting Alaskan natural gas to the lower 48 for consumption is high when 

compared with current U.S. prices. As Alaskan oil production declines, companies may seek to 

monetize or sell their natural gas, which is typically re-injected into oil wells to boost production. 

There are also new potential natural gas supplies in Alaska that may be more conducive to export 

compared to North Slope natural gas. Potential Alaskan projects have not been included in the 

DOE-sponsored studies on exports as Alaska is considered an independent market from the 

lower 48. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 14 

Trade: Agreements or Disagreements? 

Most companies seeking permits to export LNG have applied to export LNG to countries with 

which the United States does not have a free trade agreement (FTA) in addition to those with 

which the United States does have an FTA. As mentioned above, exports to FTA countries are 

presumptively considered “in the national interest” under the Natural Gas Act, as amended. Five 

of those applications are pending with DOE. Of the 33.8 bcf/d of capacity applied for export by 

companies, 32.4 bcf/d or 96% is seeking or has received approval to export to non-FTA countries. 

As noted above, South Korea is the only major importer of LNG of the countries with which the 

United States has a free trade agreement. Of the other FTA countries, four have LNG import 

terminals, while the rest export natural gas, receive natural gas via pipeline, or do not import 

natural gas. In order for LNG export projects to be financially viable, they will likely need the 

ability to export to non-FTA countries. 

The United States is in negotiations on two multi-nation free trade agreements: the Trans-Pacific 

Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).14 Both these 

agreements would give the signatories free trade status when it comes to U.S. natural gas exports. 

TPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, 

Singapore, and Vietnam. Japan is the largest LNG importer in the world and would add 

significantly to potential markets for U.S. LNG exports. Of the four U.S. LNG export projects 

that have received approval to export to non-FTA countries, Japanese companies have signed 

contracts with two of the projects. Japanese companies also have signed contracts with at least 

two of the pending export projects. Japan was a late participant in TPP process; one of its 

motivations for joining was access to U.S. LNG exports.15 TTIP is a proposed agreement between 

the United States and the European Union. Among other negotiating objectives, the EU may seek 

to gain access to U.S. LNG through the TTIP to lessen its dependence on Russian and other 

sources of natural gas. 

The prospect of the United States limiting or restricting LNG exports has raised questions, 

particularly as a member of the World Trade Organization (WTO). The General Agreement on 

Tariffs and Trade’s (GATT) Article XI, General Prohibition Against Quantitative Restraints, 

states: 

No prohibition or restrictions other than duties, taxes or other charges made effective through 

quotas, import or export licenses or other measures, shall be instituted or maintained by any 

contracting party on the importation of any product of the territory of any other contracting 

party or on the exportation or sale for export of any product destined for the territory of any 

other contracting party. 

There are exceptions to Article XI based on the conservation of exhaustible natural resources or 

the necessity to protect human health, which may apply if the United States restricts LNG 

exports.16 However, these exceptions may be dependent on a country restricting its own 

production. Additionally, restricting LNG exports may put the United States in a contradictory 

 

14 For additional information on the two agreements see CRS Report, The Trans-Pacific Partnership Negotiations and 

Issues for Congress, by Ian F. Fergusson and CRS Report R43158, Proposed Transatlantic Trade and Investment 

Partnership (TTIP): In Brief, by Shayerah Ilias Akhtar and Vivian C. Jones. 

15 Discussion with Amb. Koji Tsuruoka, Chief Negotiator for the Trans-Pacific Strategic Economic Partnership, August 

6, 2013. 

16 See GATT Article XX. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 15 

position vis-à-vis cases it has brought to the WTO, specifically against China for limiting the 

export of rare earths and other metals. The position of the United States as a promoter of free 

trade may also be challenged. 

Natural gas imports and exports comprise a small fraction of overall U.S. international trade, 

totaling about $22 billion in 2012, with about two-thirds of the value coming from imports.17 The 

United States was a net importer of natural gas of almost $8 billion. LNG imports and exports 

accounted for 13% of the trade. Since 2000, the value of exports has averaged almost $2.5 billion 

per year while imports averaged over $20 billion.18 

The Global LNG Market 

If all the proposed U.S. LNG export projects were operational today, the United States would 

rank first in the world for global export capacity. However, U.S. LNG exports will face 

competition in the global LNG market. According to one study, global liquefaction capacity is 

projected to rise by almost 50% by 2020 (see Figure 5), including only one of the U.S. projects. 

Many non-U.S. projects are much further along than the U.S. projects. LNG trade slightly 

dropped year-on-year in 2012, accounting for 32% of all natural gas traded internationally.19 Most 

LNG sold in the world is under long-term contracts, indexed to oil prices. The long-term 

contracts are needed to finance the liquefaction facilities, usually the most expensive part of the 

LNG supply chain, which includes LNG tankers, storage, and LNG import terminals. U.S. natural 

gas prices are market-based, which should give U.S. LNG export projects an advantage as the 

differential with oil-indexed-priced natural gas can be more than double the U.S. price (see 

Figure 2). U.S. LNG exports could add to the pressure for other countries to delink their natural 

gas exports—either as LNG or by pipeline—from oil-indexed prices. Japanese companies have 

been vocal about their interest in a natural gas-based pricing mechanism to reduce costs and 

exposure to oil prices. However, U.S. LNG export projects will still need to enter into long-term 

supply contracts, usually 20 to 30 years, to obtain financing, which may be a difficult hurdle to 

overcome given existing market and financial conditions. Providing LNG to countries that use oil 

for heating, industrial processes, or electricity generation could also decrease demand for 

petroleum products, putting downward pressure on oil prices. 

 

17 U.S. Energy Information Administration, U.S. Imports by Point of Entry and U.S. Exports by Point of Exit, 

Washington, DC, January 31, 2013, http://www.eia.gov/naturalgas/data.cfm#imports. 

18 Bureau of Economic Analysis, Department of Commerce, Trade in Goods databases, June 14, 2010, 

http://www.bea.gov/agency/uguide1.htm#_1_19. 

19 BP Statistical Review of World Energy 2013, June 2013, p. 29. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 16 

Figure 5. Actual and Projected LNG Production Capacity 

2000-2020 

Source: PIRA Energy Group. 

Notes: This graphic includes projects that are operating, under construction, or have reached a final investment 

decision. The only new U.S. project included is Cheniere’s Sabine Pass terminal. The other proposed U.S. 

projects are considered speculative at this point. Units = billion cubic feet per day (bcf/d). 

The dip in 2012 in Figure 5 is due to major declines in Algeria, Trinidad & Tobago, Oman, and 

Indonesia. Algeria’s two export terminals have been undergoing maintenance and one is being 

rebuilt. Trinidad & Tobago’s decline is mostly because the United States is no longer a big 

importer of LNG. Egypt and Libya declined because of the turmoil in those countries. 

Many of the projected projects in Figure 5 are targeting the Asian LNG demand centers. 

Although the locations of most of the proposed U.S. export terminals are on the U.S. Gulf Coast 

and the East Coast, Asia may be the target market for U.S. LNG as it tends to pay higher prices 

for its natural gas imports. The widening of the Panama Canal, scheduled to be completed in 

2015, would contribute to U.S. competitiveness in Asia. Europe has a lot of LNG import capacity 

and growing demand, but needs to continue to improve its infrastructure connections to transport 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 17 

gas to markets.20 Russia, the main supplier of natural gas to Europe, may be put under increasing 

pressure by U.S. export projects to further delink its natural gas prices from oil. U.S. LNG 

exports could also provide options for some countries that are highly dependent on one supplier. 

Authorizations to Export LNG 

Pursuant to provisions included under Section 3 of the NGA (15 U.S.C. §717b), both the export 

of LNG and the construction or expansion of LNG terminals require authorization from DOE’s 

Office of Fossil Energy and from the Federal Energy Regulatory Commission. With regard to 

exports, any person seeking authorization to export LNG from the United States, or to amend an 

existing import or export authorization, must file an application with DOE’s Office of Fossil 

Energy.21 Denial of an authorization is dependent upon the export being deemed “not consistent 

with the public interest.” That is, there is a presumption that exports to non-FTA countries are in 

the public interest unless shown otherwise.22 If the United States has an FTA in effect with the 

nation to which the LNG would be exported, that application will be automatically deemed 

consistent with the public interest.23 LNG exports to non-FTA countries may also be authorized, 

but require the Office of Fossil Energy to publish a notice of the application in the Federal 

Register and seek public comments, protests, and notices of intervention as part of their public 

interest determination. DOE also can limit the amount of cumulative LNG exports, so each 

successive project may be contingent upon the volumes of previously approved projects. 

Also under the NGA, any person proposing to site, construct, or operate facilities to be used for 

the export of natural gas from the United States to a foreign country or to amend an existing 

FERC authorization, including the modification of existing authorized facilities, must file an 

application for authorization with FERC.24 In addition to FERC, the Department of Homeland 

Security’s U.S. Coast Guard and the Department of Transportation’s Office of Pipeline Safety 

(OPS), under the Pipeline and Hazardous Materials Safety Administration (PHMSA), may also be 

responsible for exercising some level of regulatory authority over the siting, design, construction, 

expansion, and operation of LNG facilities, and related land and marine safety and security 

issues. Projects related to LNG exports or LNG terminals may be subject to requirements under 

other federal law, including the Coastal Zone Management Act, the Clean Air Act, and the Clean 

Water Act. 

Compliance with one environmental law applies to all DOE authorizations required under Section 

3 of the NGA—the National Environmental Policy Act (NEPA, 42 U.S.C. 4321 et seq.). Pursuant 

 

20 For more information on Europe’s natural gas situation, see CRS Report R42405, Europe’s Energy Security: Options 

and Challenges to Natural Gas Supply Diversification, coordinated by Michael Ratner. 

21 Requirements applicable to LNG exports are specified under Section 3 of the NGA (15 U.S.C. §717b). Regulations 

implementing requirements applicable to the export authorization application process were established under 10 C.F.R. 

Part 590, the “Administrative Procedures with Respect to the Import and Export of Natural Gas.” 

22 Applicants seeking authorization to export LNG may seek either a blanket or a long-term authorization. The blanket 

authorization enables the applicant to export on a short-term or spot market basis for up to two years. The long-term 

authorization is used when an applicant has, or intends to have, a signed gas purchase or sales agreement/contract for a 

period of time longer than two years. 

23 See 15 U.S.C.§717b(c). Regulations implementing this section of the NGA were promulgated under 18 C.F.R. Part 

153, “Applications for Authorization to Construct, Operate, or Modify Facilities Used for the Export or Import of 

Natural Gas.” 

24 Pursuant to 15 U.S.C. §717b(e)(1). 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 18 

to NEPA, DOE and other agencies are required to identify and document the environmental 

impacts of an action before a final agency decision is made. For projects related to LNG exports, 

the level of environmental review and documentation required will generally depend on whether 

the proposed action or project will require the construction of major new natural gas pipelines or 

related facilities or minor modifications of existing pipelines or related facilities. 

DOE and the Public Interest Determination 

As part of its process in determining whether LNG exports to non-FTA countries are “not 

consistent with the public interest,” DOE’s Office of Fossil Energy commissioned two studies: (1) 

a domestic price impact study by EIA and released in January 2012,25 and (2) an economic impact 

study by NERA Economic Consulting (NERA) and released in December 2012. On February 25, 

2013, DOE closed the comment period regarding the NERA study.26 Almost 200,000 comments 

were received on the two DOE studies.27 However, the results of these studies are only part of 

DOE’s criteria for determining whether LNG exports to non-FTA countries are or are not in the 

public interest. In its approval of Cheniere Energy’s non-FTA permit, DOE listed other criteria it 

used to make that determination: domestic need, adequacy of supply, the environment, 

geopolitics, and energy security. DOE has also provided insights into the “public interest” 

evaluation in a set of Policy Guidelines issued in 1984, Order No. 1471, and Delegation Order 

No. 0204-111. These were mostly to assess imports, but DOE has held that they also apply to 

exports.28

DOE has not laid out a specific timetable for when it will process the pending applications. In 

March 2013, the acting Assistant Secretary for Fossil Energy at DOE, Christopher Smith, 

declined to comment on a timetable for approving the non-FTA permits at a hearing before the 

House Oversight and Government Reform’s Energy Policy, Health Care and Entitlements 

Subcommittee.29 DOE has stated that it would begin “processing” the non-FTA applications 

according to: 

1. All pending DOE applications where the applicant has received approval (either 

on or before December 5, 2012) from the FERC to use the FERC pre-filing 

process, in the order the DOE application was received, 

2. Pending DOE applications in which the applicant did not receive approval (either 

on or before December 5, 2012) from FERC to use the FERC pre-filing process, 

in the order the DOE application was received, 

3. Future DOE applications, in the order the DOE applications are received.30

 

25 For the complete EIA report follow this link, http://www.fossil.energy.gov/programs/gasregulation/LNGStudy.html. 

26 For the complete NERA report follow this link, http://www.fossil.energy.gov/programs/gasregulation/reports/

nera_lng_report.pdf. 

27 E-mail from DOE’s Office of Fossil Energy, February 27, 2013. 

28 Department of Energy, Office of Fossil Energy, Opinion and Order Conditionally Granting Long-Term 

Authorization to Export Liquefied Natural Gas from Sabine Pass LNG Terminal to Non-Free Trade Agreement 

Nations, FE Docket No. 10-111-LNG, Washington, DC, May 20, 2011, pp. 28-29. 

29 U.S. Congress, House Oversight and Government Reform, Energy Policy, Health Care and Entitlements, The 

Department of Energy’s Strategy for Exporting Liquefied Natural Gas, 113th Cong., 1st sess., March 19, 2013. 

30 Office of Oil Gas Global Security Supply, Pending Long-Term Applications to Export LNG to Non-FTA Countries - 

Listed in Order DOE Will Commence Processing, Office of Fossil Energy, U.S. Department of Energy, Washington, 

(continued...) 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 19 

The December 5, 2012, date coincides with when the NERA study was publicly released. The 

basic conclusion of the NERA study was that LNG exports would benefit the overall U.S. 

economy. The study acknowledged that there would be parts of the economy that would be hurt 

by LNG exports, mainly large consumers of natural gas, but that on a net basis the U.S. economy 

would be better off in all export cases. The net benefits would be highest if the United States 

could produce large quantities of low cost shale gas and that global demand for natural gas 

increases rapidly. 

Both the NERA economic study and the EIA price analysis have been criticized. When EIA 

released its price analysis, the scenarios it examined per DOE’s request were viewed as 

unrealistic. The high export scenario EIA examined was for 12 bcf/d, which is now well below 

the cumulative volumes for which companies have applied to DOE. According to EIA’s analysis, 

the range of increases to domestic prices was 9.6% to 32.5%. Proponents of exports emphasized 

the former figure, while opponents focused on the latter. Both reports left enough latitude in their 

results for supporters and opponents of exports to promote their opinions. 

The NERA report has attracted most of the attention in the 113th Congress, given the timing of its 

release. The NERA study, which used the EIA results, factored in international market parameters 

and macroeconomic impacts on the U.S. economy from increased LNG exports. In all the 

scenarios NERA examined, 63 in total, there were net economic gains to the United States, in 

spite of higher domestic natural gas prices, and the greater the exports the greater the benefits. 

The trade benefits from LNG exports outweighed the higher costs to the domestic economy. 

Criticism of the NERA report from some Members of Congress has focused on the narrowness of 

its results, the use of outdated data, and incomplete market information, among other things.31

Although the criticism is open to debate, it is important to remember that the NERA study is just 

one part of DOE’s analysis of determining which projects may be in the public interest. In its 

conditional approval to export to non-FTA countries for the Cove Point LNG terminal, DOE 

defended its data use from EIA’s Annual Energy Outlook 2011 due to timing, but also noted that 

critics often cite the subsequent rise in demand projected in EIA’s Annual Energy Outlook 2012 

and the Early Release data from EIA’s Annual Energy Outlook 2013, but neglect to highlight the 

corresponding rise in domestic production.32 Similar to EIA, NERA was given a set of parameters 

to examine and asked for the impact on the overall U.S. economy. A full analysis of the NERA 

and EIA studies, as well as the myriad of other studies that have also been undertaken by other 

groups, is beyond the scope of this report. 

Compliance with NEPA and Additional Environmental Laws 

Both the Office of Fossil Energy’s requirement to authorize LNG exports and FERC’s obligation 

to authorize LNG terminal facility siting, construction, or expansion are considered federal 

actions subject to compliance with the National Environmental Policy Act. Broadly, NEPA 

 

(...continued) 

DC, September 10, 2013. 

31 Office of Senator Ron Wyden, “Wyden Highlights Flaws in DOE Export Study,” press release, January 10, 2013, 

http://www.wyden.senate.gov/news/press-releases/wyden-highlights-flaws-in-doe-export-study-. 

32 U.S. Department of Energy, Office of Fossil Energy, Order Conditionally Granting Long-Term Multi-Contract 

Authorization to Export Liquefied Natural Gas by Vessel from the Cove Point LNG Terminal to Non-Free Trade 

Agreement Nations, DOE/FE Order No. 3331, Washington, DC, September 11, 2012, pp. 86-87, http://energy.gov/

sites/prod/files/2013/09/f2/Order%203331.pdf. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 20 

requires federal agencies to identify and consider the environmental impacts of an action and to 

inform the public of those impacts before a final agency decision is made.33 

To ensure environmental impacts are indeed considered, before an authorization required under 

Section 3 of the NGA can be issued, DOE agencies must conduct the appropriate NEPA review. 

The level of documentation and analysis required for a given NEPA review will vary depending 

on the anticipated level of impacts of that project. Regulations implementing NEPA, promulgated 

by the Council in Environmental Quality (CEQ),34 require federal agencies to— 

• Prepare an environmental impact statement (EIS)—a full-scale review of the 

potential environmental impacts. An EIS is required when it is known that a 

proposed action will significantly affect the quality of the environment. 

• Prepare an environmental assessment (EA)—a concise public document 

prepared when the significance of a proposed action is unclear. If it is determined 

that project impacts will be significant, an EIS must be prepared. Otherwise, a 

Finding of No Significant Impact (FONSI) may be issued. 

• Determine whether a Categorical Exclusion (CE) may be applied—a 

category of actions that, based on agency experience, normally have no 

cumulatively significant impacts and, hence, are categorically excluded from the 

requirement to prepare an EIS or EA.

DOE supplemented the CEQ regulations to specify NEPA compliance requirements applicable to 

actions undertaken by its agencies.35 Generally, the level of NEPA review required for 

authorizations related to LNG exports will depend on whether granting a request for authorization 

will result in the construction of major new natural gas pipelines or related facilities (such as 

siting and constructing a new LNG terminal) or a significant expansion and modification of 

existing pipelines or related facilities. 

To date, the Office of Fossil Energy has determined that applications for authorizations to export 

LNG may be processed as categorical exclusions.36 To make that determination, applicants must 

demonstrate that the project, among other requirements, will not violate applicable statutory, 

regulatory, or permit requirements for environment, safety, and health, or similar requirements of 

DOE or Executive Orders or involve extraordinary circumstances that may affect the significance 

of the environmental effects of the proposal.37

 

33 Under Section 102 of NEPA, all federal agencies are required to include in “every recommendation or report on 

proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a 

detailed statement by the responsible official on—the environmental impact of the proposed action” (42 U.S.C. 

§4332(2)(C)(i)). 

34 CEQ regulations, at 40 C.F.R. §§1500-1508, are broadly applicable to all federal agency actions. 

35 DOE promulgated “National Environmental Policy Act Implementing Procedures” at 10 C.F.R. Part 1021. Those 

procedures apply to all organizational elements of DOE, except FERC. “Regulations Implementing the National 

Environmental Policy Act,” at 18 C.F.R. Part 380, apply specifically to FERC actions. 

36 See the U.S. Department of Energy’s Office of Fossil Energy webpage “Natural Gas Import & Export Regulation, 

NEPA: Records of Categorical Exclusions,” at http://fossil.energy.gov/programs/gasregulation/

nepa_cx_determination.html. 

37 See the Office of Fossil Energy “Categorical Determination Form,” issued February 6, 2013, for ENI USA Gas 

Marketing, LLC, application seeking authorization to export previously imported LNG from the Cameron LNG 

terminal in Cameron Parish, Louisiana, available at http://fossil.energy.gov/programs/gasregulation/cx_documents/

Cat_Ex_12_161_LNG.pdf. 
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Congressional Research Service 21 

In regulations implementing NEPA applicable to FERC, DOE has identified the authorizations 

required under Section 3 of the NGA for the siting, construction, and operation of new LNG 

export facilities as actions that normally will require an EIS.38 However, under certain conditions, 

FERC may first prepare an EA to determine whether an EIS is necessary. For example, for an 

application to authorize the modification of an existing LNG import terminal to allow for LNG 

export, FERC may prepare an EA and determine that the required modification will not result in 

significant environmental impacts. Such a determination might be made if, for example, the 

modification would require adding liquefaction and related equipment, but remain within the 

terminal’s existing footprint. 

To prepare the appropriate NEPA documentation for an LNG export-related authorization, the 

Office of Fossil Energy or FERC would be required to identify any other compliance 

requirements applicable to the authorization.39 Applicable requirements may involve some level 

of input, analysis, or approval from another federal agency, or possibly a tribal or state agency. 

Following are selected federal statutes, including agencies that may have some jurisdiction over 

those requirements that may apply to the construction of a new LNG export terminal or the 

expansion of an existing LNG import facility to include export operations: 

• Clean Water Act—the U.S. Army Corps of Engineers, the Environmental 

Protection Agency (EPA), the U.S. Coast Guard, and state environmental 

protection agencies; 

• Clean Air Act—EPA and state environmental protection agencies; 

• Endangered Species Act—the Department of the Interior’s U.S. Fish and Wildlife 

Service, the National Oceanic and Atmospheric Administration (NOAA) 

Fisheries Service, and state natural resource agencies; 

• National Historic Preservation Act—the Advisory Council on Historic 

Preservation, the State Historic Preservation Officer, or Tribal Historic 

Preservation Officer; and 

• Rivers and Harbors Act—the U.S. Coast Guard. 

In addition to meeting appropriate environmental requirements, an authorized project may require 

compliance with additional safety or security-related requirements implemented by agencies 

including, but not limited to: 

• The Department of Transportation’s Office of Pipeline Safety (OPS) within the 

Pipeline and Hazardous Materials Safety Administration (PHMSA); 

• National Fire Protection Association (NFPA); and 

• Federal Emergency Management Agency (FEMA). 

 

38 See 18 C.F.R. §380.6(a)(1). 

39 For additional information on siting a liquefied natural gas terminal see CRS Report RL32205, Liquefied Natural 

Gas (LNG) Import Terminals: Siting, Safety, and Regulation, by Paul W. Parfomak and Adam Vann. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 22 

New Sources of Natural Gas: The Game Changer 

The growth in U.S. natural gas resources, particularly from shale gas, and the projected continued 

growth are what make increased natural gas exports a possibility. U.S. natural gas reserves have 

climbed 72% since 2000 and 49% since 2005. These data include reductions for natural gas 

extracted during the period and so are net increases. In recent years, the increase in reserves is 

mostly attributed to development of shale gas, which has grown from 10% of U.S. natural gas 

reserves in 2007 to 32% in 2010. By comparison, conventional U.S. natural gas reserves declined 

between 2007 and 2008, and fell again in 2010. Though the decline was marginal, it highlights 

the importance of shale gas to future U.S. natural gas production. Many industry analysts expect 

shale gas reserves to continue to rise and make up a greater portion of U.S. natural gas reserves 

unless new restrictions are placed on the industry, such as rules related to hydraulic fracturing, 

power plant emissions, etc. 

In 2012, the United States produced and consumed more natural gas than it ever has—24 trillion 

cubic feet (tcf) and 24 tcf, respectively—while paying some of the lowest market prices for 

natural gas in the world.40 The production figure of 24 tcf is of dry gas, which has been processed 

for consumption purposes, but the United States actually produced 29.8 tcf of raw natural gas in 

2012. The United States is the world’s leading producer of natural gas, surpassing Russia in 2009, 

and the world’s leading consumer. After declining for the first half of the last decade, U.S. natural 

gas production rose 18% in the latter half, with shale gas accounting for 30% of production by 

2011.41

Reserves and production data do not tell the whole story when looking at the U.S. transformation 

regarding natural gas supply. The term reserves has a specific industry definition that includes a 

technological component, an economic factor, and a probability of success among other criteria. 

To more fully understand the changes to the U.S. natural gas sector it is more appropriate to look 

at reserves and estimates for undiscovered, technically recoverable resources (UTRR) (see Figure 

6). UTRR is an estimate of what can be extracted using current technology regardless of price. 

Using UTRR plus reserves, the United States has a natural gas resource base of 1,809 tcf or 

enough gas for approximately 79 years of production at 2011 levels. Compared with data from 

2006, U.S. UTRR for natural gas has jumped almost 25%. Even this measure may not accurately 

reflect what will be extracted from the ground as technology is constantly changing. Just over the 

last few years, industry has been able to improve its shale gas extraction rate from about 5% to 

about 15%, thereby tripling what is recoverable. 

 

40 Many producing countries subsidize natural gas consumption, so their consumers do not pay a market price. 

41 2011 is the latest year for which data are available for this metric. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 23 

Figure 6. Natural Gas Resources and Reserves 

2006 vs. 2011 

Source: Department of the Interior’s U.S. Geological Survey and Bureau of Ocean Energy Management (BOEM) 

and U.S. Energy Information Administration. 

Notes: The data for unconventional include some but not all of the shale basins, as some have not been 

assessed to date by the U.S. Geological Survey. Unconventional shales are fine grained, organic rich sedimentary 

rocks. The shales are both the source of and the reservoir for oil and natural gas, unlike conventional petroleum 

reservoirs. Undiscovered technically recoverable resources (UTRR) refers to amounts of natural gas estimated 

to exist by examining geologic characteristics of unexplored areas and recoverable using current technology. All 

the figures in the graphic above are UTRR except Proved Reserves, defined as a 90% probability of recovery 

using existing technology and at current prices. Units = trillion cubic feet (tcf). 

Projected Future Growth 

In 2012, natural gas was the most produced fuel, on an energy equivalent basis, in the United 

States, surpassing coal for the first time. This change was driven by the success of shale gas 

development. EIA, which makes projections based on current policy and information, estimated 

in its Annual Energy Outlook 2013 Early Release that overall U.S. natural gas production will 

grow 55% between 2010 and 2040. Shale gas will comprise over 50% of that production, up from 

23% in 2010. During that time period, the United States is expected to go from a net importer of 

natural gas by pipeline and LNG to a net exporter by 2020, which is a change from EIA’s 2011 

Annual Energy Outlook when there was no time period in which the United States was forecast to 

be a net exporter of natural gas. The United States is forecast to be a net LNG exporter by 2016, 

according to EIA. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 24 

Figure 7. Projected U.S. Natural Gas Production 

Source: EIA Annual Energy Outlook 2013 Early Release, Reference Case, http://www.eia.gov/oiaf/aeo/

tablebrowser/#release=AEO2013ER&subject=8-AEO2013ER&table=14-AEO2013ER®ion=0-0&cases=

early2013-d102312a. 

Note: Units = trillion cubic feet (tcf) per year. 

Natural Gas Liquids: A Production Driver 

Natural gas liquids (NGLs) have taken on a new prominence as shale gas production has 

increased and prices have fallen. NGL is a general term for all liquid products separated from 

natural gas at a gas processing plant and includes ethane, propane, butane, and pentanes. When 

NGLs are present with methane, which is the primary component of natural gas, the natural gas is 

referred to as either “hot” or “wet” gas. Once the NGLs are removed from the methane the natural 

gas is referred to as “dry” gas, which is what most consumers use. Each NGL has its own market 

and its own value. As the price for dry gas has dropped because of the increase in supply and 

other reasons such as the warm winter of 2011, the natural gas industry has turned its attention to 

producing more wet gas in order to bolster the value it receives. Some companies have shifted 

their production portfolios to tight oil formations, such as the Bakken in North Dakota, to 

capitalize on the experience they gained in shale gas development. Historically, the individual 

NGL products have been priced against oil, except for ethane, and as oil prices have remained 

higher since 2005 relative to natural gas, it has driven an increase of wet gas production, thereby 

maintaining the amount of dry gas as a production “byproduct” despite its low price. 

Congressional Actions and Considerations 

There have been four bills introduced in the 113th Congress directly related to LNG exports, 

primarily to expand the list of countries that would get automatic approval beyond FTA countries. 

Other bills have been introduced that affect natural gas fundaments and infrastructure. 

The Senate Energy and Natural Resources Committee conducted a hearing on natural gas, 

including exports, on February 12, 2013, and the House Oversight and Government Reform’s 

Energy Policy, Health Care and Entitlements Subcommittee held a hearing on the DOE’s 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 25 

permitting process on March 19, 2013. There may be additional hearings in the coming months. 

Some congressional representatives from the states where the LNG facilities are planned have 

submitted letters of support for the different projects to various regulatory agencies. Additionally, 

other Members have mentioned the possibility of natural gas exports in public statements, and 

some of those have expressed concerns about the potential effect on domestic prices, supplies, 

and the environment, among other issues. 

Issues and Interests 

The public focus on U.S. exports of natural gas has been on the applications to export LNG, 

despite the United States exporting much more natural gas by pipeline. Groups such as the 

Industrial Energy Consumers of America (IECA), a national association of manufacturing 

companies, and the American Public Gas Association (APGA), a national association of publiclyowned natural gas distribution systems, have filed motions to intervene against various projects.42

Both of these organizations represent firms that use natural gas and would be negatively affected 

if natural gas prices rose. Natural gas producers and certain local businesses have supported the 

projects as they would benefit from access to new overseas markets and higher international 

prices. Analyses of the price effects of potential natural gas exports likely will receive continued 

attention as companies move forward with their projects. The Sierra Club has filed against 

projects on environmental grounds, particularly related to the source of natural gas for export. 

Expectations about the economic impacts of greater U.S. natural gas exports depend on 

assumptions about the volume of exports, economic growth, market segmentation, and 

environmental regulations, among other market parameters. Some initial estimates projected a 

modest rise in absolute terms in domestic natural gas prices if all the proposed export projects are 

built, premised on a relatively flat supply curve for natural gas. These estimates also projected 

that U.S. natural gas prices would stay relatively low in historic terms as well as in comparison to 

global prices. Those in favor of exports add that increased production could result in increased 

revenue for local, state, and federal governments (through taxes, royalty payments, and economic 

development), more employment, an improved international trade balance, and reductions in 

natural gas flaring.43 Natural gas consumers counter that higher natural gas prices abroad could 

eventually lead to higher prices in the United States, and possible supply shortages, as producers 

seek to maximize profits by diverting more and more U.S. natural gas to overseas markets.44

 

42 Letter from Paul N. Cicio, President of Industrial Energy Consumers of America, to U.S. Department of Energy, 

Office of Fossil Energy, Office of Oil and Gas Global Security and Supply, December 13, 2011, http://www.iecaus.com/documents/121310.pdf. 

American Public Gas Association, “APGA Files Motion to Intervene and Protest Freeport Export Application,” press 

release, March 28, 2011, http://www.apga.org/files/public/Press%20Releases/2011/Press%20Release%20-

%20Motion%20to%20Intervene%20in%20Freeport%20Application,%202011.pdf. 

American Public Gas Association, “APGA Files Motion to Intervene in Sabine Pass LNG Export Facility Application,” 

press release, March 4, 2011, http://www.apga.org/files/public/Press%20Releases/2011/Press%20Release%20-

%20Comments%20Sabine%20Pass-%20March%203,%202011.pdf. 

43 Flaring is combusting natural gas as a means to eliminate it because it may be impracticable to use, capture, or 

transport. Flaring is usually done as a safety or health precaution, during the exploration and development phases 

leading to production. 

44 Margaret Ryan, “USAEE Notebook: DOE Weighing LNG Export Price Effect,” AOL Energy, Internet blog, October 

10, 2011, http://energy.aol.com/2011/10/10/usaee-notebook-doe-weighing-lng-export-price-effect/. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 26 

In the near term, increased use of natural gas in the U.S. economy is limited, primarily to electric 

power generation.45 Natural gas-fired electric power plants account for a significant and growing 

share of U.S. natural gas demand. Although coal remains the dominant fuel for U.S. electric 

power generation, environmental concerns regarding atmospheric emissions is limiting its use and 

prompting the retirement of older coal plants that are less equipped to curtail emissions. 

Switching from coal to natural gas in electric power generation may consume incremental U.S. 

natural gas supply increases before exports do. There are many proposed petrochemicals projects, 

but these are at various stages of development and will take a number of years to come to fruition. 

Other sectors such as transportation, industrial, commercial, and residential are not likely to see a 

substantial rise in natural gas demand in the next couple of years. This could change if 

technologies can be improved to increase the use of natural gas in transportation, such as gas-toliquids, natural gas vehicles, or electric vehicles (assuming the electricity is generated by natural 

gas). Although proponents see strategic value in such fuel-switching as a means to reduce U.S. 

dependence on imported oil, high technology costs diminish this prospect in the near term. 

Although much less attention is paid to natural gas exports by pipeline, it is anticipated that these 

will continue to increase as more shale gas is developed. Canada’s natural gas production has 

been declining, but it is possible this will be reversed as Canada develops its own shale gas 

resources, which are estimated to be large. However, Canadian consumption may also increase as 

production from oil sands is projected to rise. Natural gas is heavily used in the extraction of 

petroleum from oil sands. Canada also has at least two of its own LNG export projects being 

considered. A recent EIA study estimated Canada’s technically recoverable shale gas resources at 

573 trillion cubic feet, over 100 years’ worth at the country’s current production rate. 46 If Canada 

develops these resources, they could be an additional source of natural gas for the United States 

as well. 

Mexico’s natural gas production has been rising steadily for the last decade, but not quickly 

enough to keep up with consumption. Imports now account for almost 27% of consumption 

compared to under 10% in 2000, and imports from the United States made up over three-quarters 

of all natural gas imports to Mexico in 2012.47 Although Mexico may have significant technically 

recoverable shale gas resources , 545 trillion cubic feet or 364 years at their current production 

level, Mexico is much further behind in developing these resources than the United States and 

Canada,48 and will likely remain dependent on U.S. supplies to meet growing demand. 

Receiving permits to export natural gas by pipeline to Canada and Mexico is typically easier than 

receiving a permit to build an LNG export facility, even though pipeline projects require 

authorization from the Secretaries of Defense and State. Both Canada and Mexico are FTA 

countries and exports are assumed to be in the U.S. national interest by statute. Pipeline export 

 

45 For additional information on natural gas in the U.S. economy, see CRS Report R42814, Natural Gas in the U.S. 

Economy: Opportunities for Growth , by Robert Pirog and Michael Ratner 

46 U.S. Energy Information Administration, Technically Recoverable Shale Oil and Shale Gas Resources: An 

Assessment of 137 Shale Formations in 41 Countries Outside the United States, Washington, DC, June 2013, p. 6, 

http://www.eia.gov/todayinenergy/detail.cfm?id=11611. 

47 BP, BP Statistical Review of World Energy 2012, June 2012, pp. 23, 28, http://www.bp.com/sectionbodycopy.do?

categoryId=7500&contentId=7068481. 

48 U.S. Energy Information Administration, Technically Recoverable Shale Oil and Shale Gas Resources: An 

Assessment of 137 Shale Formations in 41 Countries Outside the United States, Washington, DC, June 2013, p. 6, 

http://www.eia.gov/todayinenergy/detail.cfm?id=11611. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 27 

projects tend to be less costly and easier to finance than LNG export projects may be; none of the 

latter have been built in the United States in 40 years. 

As highlighted above, the development of shale gas resources will be a key factor in the United 

States becoming a net natural gas exporter. Infrastructure constraints within some of the major 

shale gas producing areas may limit the amount of natural gas that can reach markets and be 

available for export. Changes to the regulatory environment would also have an impact on natural 

gas production. 

Environmental groups differ on the desirability of greater natural gas use in general. Although 

burning natural gas produces less pollution than burning other fossil fuels, it still emits 

greenhouse gases and other atmospheric pollutants. Some environmental groups view natural gas 

as a necessary bridge fuel to a zero carbon economy, while others want to go to the zero carbon 

economy directly. Some environmental groups see natural gas exports raising domestic natural 

gas prices, making renewables more viable. Additionally, there are concerns about risks to water 

supplies associated with hydraulic fracturing, the technique for extracting shale gas which uses 

water, sand, and chemicals to create fissures in shale, allowing the trapped natural gas to be costeffectively extracted. The possibility of increased shale gas development and pipeline 

construction in the United States to supply overseas LNG buyers troubles some environmental 

advocates. 

With natural gas prices low and projected to remain so, producers want new markets for their 

product. Exports represent one alternative outlet for natural gas. 
CRS-28 

Appendix A. Select U.S. Natural Gas Import and Export Infrastruc

Figure A-1. Select U.S. Natural Gas Import and Export Infrastructure 

Source: Compiled by CRS from EIA sources. Notes: Hawaii is not shown on this map because it has very limited natural gas infrastructure. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 29 

Appendix B. Supply/Demand Balance 

Table B-1. 2012 U.S. Supply and Demand Balances 

 Volume (bcf) Percentage of Consumption 

Consumption 25,457 100% 

Commercial 2,905 11% 

Electric Power 9,137 36% 

Industrial 7,100 28% 

Residential 4,177 16% 

Other 2,138 8% 

Productiona 24,048 94% 

Net Imports 1,516 6%

Imports 3,135 12% 

- Canada 2,960 12% 

- LNG 175 1%

Exports 1,619 6% 

- Canada 971 4% 

- LNG (Alaska) 14 <1% 

- Re-Export 14 <1% 

Change in Inventories 107 <1%

Source: U.S. Energy Information Administration databases, http://www.eia.gov/naturalgas/data.cfm 

Notes: Units = billion cubic feet (bcf). Table shows data for major sub-categories, which may not equal the 

section total, and sums may not total due to rounding. 

a. Dry natural gas production. 
CRS-30 

Appendix C. Natural Gas Hub Map 

Figure C-1. Natural Gas Hub and City Gate Prices 

Source: Natural Gas Week, July 2, 2012. Notes: The figures along the dotted lines indicate transportation costs between hubs and city gates. Alaska and Hawaii are not included on this 

distinct from the lower 48 states. 
U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes 

Congressional Research Service 31 

Author Contact Information 

Michael Ratner 

Specialist in Energy Policy 

mratner@crs.loc.gov, 7-9529 

Ian F. Fergusson 

Specialist in International Trade and Finance 

ifergusson@crs.loc.gov, 7-4997 

Paul W. Parfomak 

Specialist in Energy and Infrastructure Policy 

pparfomak@crs.loc.gov, 7-0030 

Linda Luther 

Analyst in Environmental Policy 

lluther@crs.loc.gov, 7-6852 

Acknowledgments 

Elizabeth Roberts, Laura Hanson, and James Uzel of CRS’s Knowledge Services Group contributed to the 

research for this report. Amber Wilhelm in CRS’s Publishing and Editorial Resources Section contributed 

to the completion of this report.