[Federal Register Volume 83, Number 113 (Tuesday, June 12, 2018)]
[Notices]
[Pages 27314-27317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12621]


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DEPARTMENT OF ENERGY


Study on Macroeconomic Outcomes of LNG Exports

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                                                   FE Docket No.
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Gulf Coast LNG Export, LLC...............  12-05-LNG
Jordan Cove Energy Project, L.P..........  12-32-LNG
Gulf LNG Liquefaction Company, LLC.......  12-101-LNG
CE FLNG, LLC.............................  12-123-LNG
Freeport-McMoRan Energy LLC..............  13-26-LNG
Venture Global Calcasieu Pass, LLC.......  13-69-LNG
Eos LNG LLC..............................  13-116-LNG
Barca LNG LLC............................  13-118-LNG
Waller LNG Services, LLC.................  13-153-LNG
Gasfin Development USA, LLC..............  13-161-LNG
Venture Global Calcasieu Pass, LLC.......  14-88-LNG
SCT&E LNG, LLC...........................  14-98-LNG
Venture Global Calcasieu Pass, LLC.......  15-25-LNG
G2 LNG LLC...............................  15-45-LNG
Texas LNG Brownsville LLC................  15-62-LNG
Strom Inc................................  15-78-LNG
Port Arthur LNG, LLC.....................  15-96-LNG
Corpus Christi Liquefaction, LLC.........  15-97-LNG
Rio Grande LNG, LLC......................  15-190-LNG
Eagle LNG Partners Jacksonville, LLC.....  16-15-LNG
Venture Global Plaquemines LNG, LLC......  16-28-LNG
Driftwood LNG, LLC.......................  16-144-LNG
Fourchon LNG, LLC........................  17-105-LNG
Galveston Bay LNG, LLC...................  17-167-LNG
Freeport LNG Expansion L.P., and FLNG      18-26-LNG
 Liquefaction 4, LLC.
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AGENCY: Office of Fossil Energy, Department of Energy.

ACTION: Notice of availability of the 2018 LNG Export Study and request 
for comments.

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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice (Notice) of the availability

[[Page 27315]]

of a study, Macroeconomic Outcomes of Market Determined Levels of U.S. 
LNG Exports (2018 LNG Export Study or Study), in the above-referenced 
proceedings and invites the submission of comments on the Study. DOE 
commissioned the 2018 LNG Export Study to inform DOE/FE's decisions on 
applications seeking authorization to export domestically produced 
liquefied natural gas (LNG) from the lower-48 states to countries with 
which the United States does not have a free trade agreement (FTA) 
requiring national treatment for trade in natural gas, and with which 
trade is not prohibited by U.S. law or policy (non-FTA countries). The 
purpose of this Notice is to enter the 2018 LNG Export Study into the 
administrative record of the 25 pending non-FTA export proceedings 
(listed above) and to invite comments on the Study for use in the 
pending and future non-FTA application proceedings. The 2018 LNG Export 
Study is posted on the DOE/FE website at: https://fossil.energy.gov/app/docketindex/docket/index/10.

DATES: Comments are to be filed using procedures detailed in the Public 
Comment Procedures section no later than 4:30 p.m., Eastern time, July 
27, 2018. DOE will not accept reply comments.

ADDRESSES: 
    Electronic Filing of Comments Using Online Form: https://fossil.energy.gov/app/docketindex/docket/index/10.
    Regular Mail: U.S. Department of Energy (FE-34), Office of 
Regulation and International Engagement, Office of Fossil Energy, P.O. 
Box 44375, Washington, DC 20026-4375.
    Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, 
etc.): U.S. Department of Energy (FE-34), Office of Regulation and 
International Engagement, Office of Fossil Energy, Forrestal Building, 
Room 3E-042, 1000 Independence Avenue SW, Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: 
    Robert Smith or Amy Sweeney, U.S. Department of Energy (FE-34), 
Office of Oil and Natural Gas, Office of Fossil Energy, Forrestal 
Building, Room 3E-042, 1000 Independence Avenue SW, Washington, DC 
20585, (202) 586-7241; (202) 586-2627.
    Cassandra Bernstein or Ronald (R.J.) Colwell, U.S. Department of 
Energy (GC-76), Office of the Assistant General Counsel for Electricity 
and Fossil Energy, Forrestal Building, 1000 Independence Avenue SW, 
Washington, DC 20585, (202) 586-9793; (202) 586-8499.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Statutory and Regulatory Overview

    Pursuant to section 3 of the Natural Gas Act (NGA), 15 U.S.C. 717b, 
exports of natural gas, including LNG, must be authorized by DOE/FE.\1\ 
Under NGA section 3(a), 15 U.S.C. 717b(a), applications that seek 
authority to export natural gas to non-FTA countries are presumed to be 
in the public interest unless, after opportunity for hearing, DOE finds 
that the authorization would not be consistent with the public 
interest.\2\
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    \1\ The authority to regulate the imports and exports of natural 
gas, including LNG, under section 3 of the NGA (15 U.S.C. 717b) has 
been delegated to the Assistant Secretary for FE in Redelegation 
Order No. 00-006.02 (issued November 17, 2014).
    \2\ With regard to exports to FTA countries, NGA section 3(c) 
was amended by section 201 of the Energy Policy Act of 1992 (Pub. L. 
102-486) to require that FTA applications ``shall be deemed to be 
consistent with the public interest'' and granted ``without 
modification or delay.'' 15 U.S.C. 717b(c). Accordingly, this Notice 
does not apply to FTA export proceedings.
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    In evaluating the public interest under NGA section 3(a), DOE 
reviews factors including economic impacts, international impacts, 
security of natural gas supply, and environmental impacts, among 
others.\3\ Additionally, DOE/FE has explained that, in deciding whether 
to grant a non-FTA export application, it considers the cumulative 
impacts of the total volume of all final non-FTA export 
authorizations.\4\ DOE/FE has further stated that it will assess the 
cumulative impacts of each succeeding request for export authorization 
on the public interest with due regard to the effect on domestic 
natural gas supply and demand fundamentals.\5\
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    \3\ See generally Sierra Club v. U.S. Dep't of Energy, 867 F.3d 
189 (D.C. Cir. 2017). Before reaching a final decision on any non-
FTA application, DOE must also comply with the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq.
    \4\ See, e.g., Eagle LNG Partners Jacksonville II LLC, DOE/FE 
Order No. 4078, FE Docket No. 17-79-LNG, Opinion and Order Granting 
Long-Term, Multi-Contract Authorization to Export Liquefied Natural 
Gas in ISO Containers Loaded at the Eagle Maxville Facility in 
Jacksonville, Florida, and Exported by Vessel to Free Trade 
Agreement and Non-Free Trade Agreement Nations, 34-38 (Sept. 15, 
2017).
    \5\ See id. at 37-38.
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    To date, DOE/FE has issued 29 final long-term authorizations to 
export LNG and compressed natural gas to non-FTA countries in a 
cumulative volume totaling 21.35 billion cubic feet (Bcf) per day (Bcf/
d) of natural gas (approximately 7.79 trillion cubic feet per year).\6\ 
With one early exception,\7\ DOE/FE issued all of these authorizations 
based, in part, on its consideration of one or more of the LNG export 
studies described below.
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    \6\ See id. at 34-38.
    \7\ DOE acted on the first application--Sabine Pass 
Liquefaction, LLC in FE Docket No. 10-111-LNG--at approximately the 
same time that DOE/FE commenced the first LNG export study.
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B. LNG Export Studies

    To date, DOE/FE has commissioned five studies to examine the 
effects of U.S. LNG exports on the U.S. economy and energy markets.\8\ 
The first study, Effect of Increased Natural Gas Exports on Domestic 
Energy Markets, was performed by EIA and published in January 2012 (EIA 
Study).\9\ The second study, Macroeconomic Impacts of LNG Exports from 
the United States, was performed by NERA and published in December 2012 
(NERA Study and, together with the EIA Study, the 2012 LNG Export 
Study).\10\ The third study, Effect of Increased Levels of Liquefied 
Natural Gas Exports on U.S. Energy Markets, was performed by EIA and 
published in October 2014 (2014 LNG Export Study).\11\ The fourth 
study, The Macroeconomic Impact of Increasing U.S. LNG Exports, was 
performed jointly by the Center for Energy Studies at Rice University's 
Baker Institute and Oxford Economics and published in October 2015 
(2015 LNG Export Study).\12\ The study subject to this Notice--the 2018 
LNG Export Study--is the fifth economic study commissioned by DOE.
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    \8\ Because there is no natural gas pipeline interconnection 
between Alaska and the lower 48 states, DOE/FE generally views those 
LNG export markets as distinct. DOE/FE therefore focuses on LNG 
exports from the lower-48 states for purposes of determining 
macroeconomic impacts.
    \9\ See 2012 LNG Export Study, 77 FR. 73627 (Dec. 11, 2012), 
available at: http://energy.gov/sites/prod/files/2013/04/f0/fr_notice_two_part_study.pdf (notice of availability of the 2012 LNG 
Export Study).
    \10\ See id.
    \11\ U.S. Energy Info. Admin., Effect of Increased Levels of 
Liquefied Natural Gas Exports on U.S. Energy Markets (Oct. 2014), 
available at: https://www.eia.gov/analysis/requests/fe/pdf/lng.pdf.
    \12\ Center for Energy Studies at Rice University Baker 
Institute and Oxford Economics, The Macroeconomic Impact of 
Increasing U.S. LNG Exports (Oct. 29, 2015), available at: http://energy.gov/sites/prod/files/2015/12/f27/20151113_macro_impact_of_lng_exports_0.pdf; see also U.S. Dep't of 
Energy, Macroeconomic Impacts of LNG Exports Studies; Notice of 
Availability and Request for Comments, 80 F R 81300 (Dec. 29, 2015) 
(notice of availability of the 2014 and 2015 LNG Export Studies).
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    DOE/FE invited public comment on each of the four prior studies, 
and received comments representing a diverse range of interests and 
perspectives. DOE/FE considered the comments received on each study, as 
applicable, in its review of the non-FTA export applications then-
pending before it. As noted above, DOE/FE has relied

[[Page 27316]]

on these studies to better inform its public interest review under 
section 3(a) of the NGA.
    The two most recent studies, the 2014 and 2015 LNG Export Studies, 
examined the domestic macroeconomic impacts of increasing exports of 
LNG at levels from 12 to 20 Bcf/d of natural gas. Specifically, the 
2014 LNG Export Study served as an update of EIA's 2012 Study and used 
baseline cases from EIA's Annual Energy Outlook 2014. Whereas the 2012 
study was based off of a Reference case with no LNG exports, the 2014 
study assumed higher LNG exports as it was based off of 9.4 Bcf/d 
Reference case export levels.\13\ The 2015 Study was a scenario-based 
assessment of the macroeconomic impact of levels of U.S. LNG exports, 
sourced from the lower-48 states, under different assumptions including 
U.S. resource endowment, U.S. natural gas demand, and international LNG 
market dynamics. The 2015 LNG Export Study included a case examining 
export volumes up to 28 Bcf/d of natural gas. The analysis covered the 
2015 to 2040 time period.
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    \13\ Each Annual Energy Outlook (AEO) presents EIA's long-term 
projections of energy supply, demand, and prices. It is based on 
results from EIA's National Energy Modeling System (NEMS) model.
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C. The 2018 LNG Export Study

    The 2018 LNG Export Study, performed by NERA Economic Consulting 
(NERA), examines the probability and macroeconomic impact of various 
U.S. LNG export scenarios and includes alternative baseline scenarios 
based on the U.S. Energy Information Administration's (EIA) Annual 
Energy Outlook 2017. The 2018 LNG Export Study will allow DOE/FE to: 
(i) Evaluate the cumulative impacts of each additional non-FTA 
application to export LNG on the U.S. economy and energy markets, and 
(ii) assess the likelihood (or probability) of different levels of LNG 
exports. The 2018 LNG Export Study is posted on the DOE/FE website at: 
https://fossil.energy.gov/app/docketindex/docket/index/10. DOE may use 
the 2018 LNG Export Study to inform its decisions in the pending non-
FTA docket proceedings (listed above), in future non-FTA application 
proceedings, and for other purposes. Comments submitted in compliance 
with the instructions in this Notice will be placed in the 
administrative record for all of the above-listed proceedings and need 
only be submitted once.
    The 25 proceedings identified above involve pending applications 
seeking authorization to export domestically produced LNG to non-FTA 
countries. In light of both the cumulative volume of exports to non-FTA 
countries authorized to date (equivalent to 21.35 Bcf/d of natural gas) 
and the volume of LNG requested for export in those pending 
applications, DOE/FE determined that a new macroeconomic study was 
warranted. DOE therefore commissioned NERA to conduct the 2018 LNG 
Export Study.
    Like the four prior studies, the 2018 LNG Export Study examines the 
impacts of varying levels of LNG exports on domestic energy markets. 
The 2018 LNG Export Study also assesses the likelihood of different 
levels of ``unconstrained'' LNG exports (defined as market determined 
levels of exports), and analyzes the outcomes of different LNG export 
levels on the U.S. natural gas markets and the U.S. economy as a whole, 
over the 2020 to 2050 time period.
    Specifically, the 2018 LNG Export Study develops 54 scenarios by 
identifying various assumptions for domestic and international supply 
and demand conditions to capture a wide range of uncertainty in the 
natural gas markets.\14\ The scenarios include three baseline cases 
based on EIA's Annual Energy Outlook 2017 (AEO 2017) projections (the 
most recent EIA projections available at the time), with varying 
assumptions about U.S. natural gas supply. Alternative scenarios add 
other assumptions about both future U.S. natural gas demand and the 
international outlook. International assumptions are based on EIA's 
International Energy Outlook 2017 and the International Energy Agency's 
World Energy Outlook 2016.
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    \14\ The four major sources of uncertainty affecting U.S. LNG 
exports identified by the Study are: Natural gas supply conditions 
in the United States, natural gas demand in the United States, 
natural gas supply availability in the rest of the world, and 
natural gas demand in the rest of the world.
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    As part of this analysis, the 2018 LNG Export Study examines the 
likelihood of conditions leading to various export scenarios--making it 
the first DOE macroeconomic study to consider this issue. Specifically, 
the 2018 LNG Export Study includes peer-reviewed probabilities of 
uncertainties surrounding developments in the international and 
domestic natural gas markets that were, in turn, combined to develop 
the 54 export scenarios and their associated macroeconomic impacts.
    To summarize, the 2018 LNG Export Study differs from DOE/FE's 
previous macroeconomic studies in the following ways:
    (i) Includes a larger number of scenarios (54 scenarios) to capture 
a wider range of uncertainty in four natural gas market conditions than 
examined in the previous studies;
    (ii) Includes LNG exports in all 54 scenarios that are market-
determined levels, including the three alternative baseline scenarios 
that are based on the AEO 2017 projections;
    (iii) Examines unconstrained LNG export volumes beyond the levels 
examined in the previous studies;
    (iv) Examines the likelihood of those market-determined LNG export 
volumes; and
    (v) Provides macroeconomic projections associated with several of 
the scenarios lying within the more likely range.

II. Invitation To Comment

    The 2018 LNG Export Study and the comments that DOE/FE receives in 
response to this Notice will help to inform DOE/FE's determination of 
the public interest in pending and future non-FTA application 
proceedings. Comments must be limited to the methodology, results, and 
conclusions of the 2018 LNG Export Study on the factors evaluated. 
These factors include the potential impact of LNG exports on domestic 
energy consumption, production, and prices; the macroeconomic factors 
identified in the Study, including gross domestic product, consumption, 
U.S. economic sector analysis, and U.S. LNG export feasibility 
analysis; and any other factors included in the Study. In addition, 
comments may be directed toward the feasibility of various scenarios 
used in the Study. While this invitation to comment covers a broad 
range of issues, DOE may disregard comments that are not germane to the 
present inquiry. Due to the complexity of the issues raised in the 2018 
LNG Export Study, interested parties will be provided 45 days from the 
date of publication of this Notice in which to submit their comments.

III. Public Comment Procedures

    DOE is not establishing a new proceeding or docket in this Notice, 
and the submission of comments in response to this Notice will not make 
commenters parties to any of the 25 export proceedings identified by 
docket number above. Persons with an interest in the outcome of one or 
more of those proceedings have been given an opportunity to comment, 
protest, and/or intervene in those applications by complying with the 
procedures established in the respective notices of application 
published in the Federal

[[Page 27317]]

Register.\15\ The record in those 25 proceedings will include all 
comments received in response to this Notice. Comments will be reviewed 
on a consolidated basis, and decisions on each application will be 
issued on a case-by-case basis. In addition to the procedures 
established by this Notice, all comments must meet the requirements 
specified by the regulations in 10 CFR part 590, as supplemented below.
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    \15\ Notices of application in the 25 proceedings were published 
in the Federal Register as follows: Gulf Coast LNG Export, LLC, FE 
Docket No. 12-05-LNG, 77 FR 32962 (June 4, 2012); Jordan Cove Energy 
Project, L.P., FE Docket No. 12-32-LNG, 77 FR 33446 (June 6, 2012); 
Gulf LNG Liquefaction Co., LLC, FE Docket No. 12-101-LNG, 77 FR 
66454 (Nov. 5, 2012); CE FLNG, LLC, FE Docket No. 12-123-LNG, 77 FR 
72840 (Dec. 6, 2012); Freeport-McMoRan Energy LLC, FE Docket No. 13-
26-LNG, 78 FR 34084 (June 6, 2013); Venture Global Calcasieu Pass, 
LLC, FE Docket No. 13-69-LNG, 79 FR 30109 (May 27, 2014); Eos LNG 
LLC, FE Docket No. 13-116-LNG, 78 FR 75337 (Dec. 11, 2013); Barca 
LNG LLC, FE Docket No. 13-118-LNG, 78 FR 75339 (Dec. 11, 2013); 
Waller LNG Svs., LLC, FE Docket No. 13-153-LNG, 79 FR 41685 (July 
17, 2014); Gasfin Development USA, LLC, FE Docket No. 13-161-LNG, 79 
FR 44439 (July 31, 2014); Venture Global Calcasieu Pass, LLC, FE 
Docket No. 14-88-LNG, 79 FR 66707 (Nov. 10, 2014); SCT&E LNG, LLC, 
FE Docket No. 14-98-LNG, 79 FR 75796 (Dec. 19, 2014); Venture Global 
Calcasieu Pass, LLC, FE Docket No. 15-25-LNG, 80 FR 36977 (June 29, 
2015); G2 LNG LLC, FE Docket No. 15-45-LNG, 80 FR 44091 (July 24, 
2015); Texas LNG Brownsville LLC, FE Docket No. 15-62-LNG, 80 FR 
46966 (Aug. 6, 2015); Strom Inc., FE Docket No. 15-78-LNG, 80 FR 
51793 (Aug. 26, 2015); Port Arthur LNG, LLC, FE Docket No. 15-96-
LNG, 80 FR 51795 (Aug. 26, 2015); Corpus Christi Liquefaction, LLC, 
FE Docket No. 15-97-LNG, 80 FR 51790 (Aug. 26, 2015); Rio Grande 
LNG, LLC, FE Docket No. 15-190-LNG, 81 FR 46318 (July 19, 2016); 
Eagle LNG Partners Jacksonville, LLC, FE Docket No. 16-15-LNG, 81 FR 
43192 (July 1, 2016); Venture Global Plaquemines LNG, LLC, FE Docket 
No. 16-28-LNG, 81 FR 39603 (June 8, 2016); Driftwood LNG, LLC, FE 
Docket No. 16-144-LNG, 82 FR 3760 (Jan. 12, 2017); Fourchon LNG, 
LLC, FE Docket No. 17-105-LNG, 82 FR 49201 (Oct. 24, 2017); 
Galveston Bay LNG, LLC, FE Docket No. 17-167-LNG, 83 FR 4473 (Jan. 
31, 2018); Freeport LNG Expansion, L.P. and FLNG Liquefaction 4, 
LLC, FE Docket No. 18-26-LNG, 83 FR 23909 (May 23, 2018).
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    Comments may be submitted using one of the following supplemental 
methods:
    (1) Submitting the comments using the online form at https://fossil.energy.gov/app/docketindex/docket/index/10;
    (2) Mailing an original and three paper copies of the filing to the 
Office of Regulation and International Engagement at the address listed 
in ADDRESSES; or
    (3) Hand delivering an original and three paper copies of the 
filing to the Office of Regulation and International Engagement at the 
address listed in ADDRESSES.
    For administrative efficiency, DOE/FE prefers comments to be filed 
electronically using the online form (method 1). All comments must 
include a reference to the ``2018 LNG Export Study'' in the title line.
    The 2018 LNG Export Study is available for inspection and copying 
in the Division of Natural Gas Regulation docket room, Room 3E-042, 
1000 Independence Avenue SW, Washington, DC 20585. The docket room is 
open between the hours of 8:00 a.m. and 4:30 p.m., Monday through 
Friday, except Federal holidays. The Study and any comments filed in 
response to this Notice will be available electronically at the 
following DOE/FE website: https://fossil.energy.gov/app/docketindex/docket/index/10.

    Issued in Washington, DC, on June 7, 2018.
Amy Sweeney,
Director, Division of Natural Gas Regulation, Office of Fossil Energy.
[FR Doc. 2018-12621 Filed 6-11-18; 8:45 am]
 BILLING CODE 6450-01-P