The Department of Energy on Aug. 31 approved a five-year term for New Fortress Energy’s Fast LNG 1 project to export gas produced in the U.S. to countries without free trade agreements (FTAs).
The LNG facility recently started operations in Altamira, Mexico, and will receive U.S.-produced gas via pipeline to export. It announced its first exports in August, having already won approval to ship gas to countries with FTAs.
The authorization comes after a court stayed the Biden administration’s pause on such approvals, announced earlier this year, and while DOE works on a related study on the environmental impacts of LNG exports. (See Federal Judge Stays Biden’s LNG Export Application Pause.)
“This important authorization cements NFE’s position as a leading global vertically integrated gas to power company and enhances the marketability of our FLNG 1 asset,” CEO Wes Edens said in a statement Sept. 3. “NFE is now able to freely supply cheaper and cleaner natural gas to underserved markets across the world and further our goal of accelerating the world’s energy transition.”
DOE approved the facility to ship 145 Bcf/year of U.S.-produced LNG. The gas will flow into Mexico over the Valley Crossing Pipeline, which runs south from Texas, and potentially other cross-border pipelines that have yet to be completed.
The exports to non-FTA countries give NFE more flexibility with the facility, DOE said.
“These re-exports can diversify global LNG supplies and improve energy security for U.S. allies and trading partners,” the department said. “Based on this administrative record, DOE has determined that it has not been shown that NFE Altamira-proposed re-exports of LNG to non-FTA countries will be inconsistent with the public interest over the authorization period.”
DOE’s approval is in effect for five years, until Aug. 30, 2029, but NFE wants to keep exporting gas until 2050. The department will reevaluate its approval once the company formally asks for a new end date.
So far, DOE has approved 46.45 Bcfd of natural gas exports, which includes 6.71 Bcfd of gas shipped to Canada and Mexico before being exported overseas.
North America’s export capacity is on pace to double by 2028, from 11.4 Bcfd to 24.4 Bcfd, the Energy Information Administration said Sept. 3.
The U.S. is home to 9.7 Bcfd of projects under construction, with Canada building 2.5 Bcfd and Mexico 0.8 Bcfd. The Canadian facilities would export gas produced there, but the Mexican facilities are seeking to export gas initially produced in the U.S.
In approving NFE’s application, DOE said it would monitor market developments closely as the impact of successive authorizations of LNG exports continues to unfold.
“DOE also acknowledges that proposals to re-export U.S.-sourced natural gas in the form of LNG from Mexico or Canada to non-FTA countries raise public interest considerations that are not present for domestic exports of LNG,” DOE said. “In the case of re-exports, the U.S. economy does not receive a significant portion of the benefits DOE has recognized for LNG exported directly from the United States, particularly with respect to the jobs and infrastructure investment associated with construction and operation of liquefaction facilities.”
Foreign LNG export facilities are also not subject to U.S. environmental laws, which could lead to long-term issues if local laws are laxer, DOE added.
The export application was opposed by environmentalists, with Sierra Club protesting and Food & Water Watch releasing a statement blasting the approval.
“It’s ridiculous that the Department of Energy would issue this license despite the administration’s ongoing, incomplete public interest review of such exports,” said Mitch Jones, managing director of advocacy and policy. “The department is under no obligation to approve these ill-advised proposals, now or ever. As the disastrous impacts of increased fossil fuel development become more and more obvious here and around the globe, the notion of expanded LNG exports should be dismissed out of hand.”
