Federal Government Grants First LNG Export License After Moratorium Overruled

A decision in January to pause approval of new licenses for exporting LNG to countries that are not U.S. trade partners was blocked by a federal court in July.

An LNG tanker is guided by tug boats at the Cheniere Sabine Pass LNG export unit in Cameron Parish, Louisiana, on April 14, 2022. Marcy de Luna/Reuters

The federal government on Sept. 3 granted the first license to export liquefied natural gas (LNG) since a federal court blocked its temporary moratorium on new LNG export licenses in July.

The U.S. Department of Energy (DOE) approved a five-year term for New Fortress Energy to export U.S.-sourced natural gas from its offshore plant in Altamira, Mexico, to non-free trade agreement countries.

This will allow New Fortress to export up to 1.4 million tonnes per annum of LNG from its LNG assets to countries without free trade agreements with the United States, according to a company statement.

“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,” New Fortress CEO Wes Edens said.

The DOE did not immediately respond to a request for comment.

The federal government in January halted the approval of new licenses for exporting LNG to countries that are not trade partners of the United States.

The temporary freeze was meant to allow the DOE to scrutinize the underlying economic and environmental analyses underlying some LNG export authorizations, including a review of their effect on greenhouse gas emissions, the economy, and national security.

A federal court blocked the moratorium in July, saying that the pause was “completely without reason or logic.” The DOE has filed an appeal over the court ruling.

DOE Urged to ‘Follow Through’ on Commitment

Some advocacy groups have expressed disappointment over the DOE’s decision to grant a new LNG export license after the federal court lifted the pause.

Allie Rosenbluth, U.S. program manager at advocacy group Oil Change International, said in a statement that the DOE has “broken its own commitment” to pause approvals for LNG export projects.

“The Department of Energy’s decision to approve the New Fortress LNG Terminal is deeply concerning,” Rosenbluth stated.

Rosenbluth called on the government to “follow through” on the commitment it made in recognition “that its current guidance doesn’t adequately consider the risks LNG exports pose to the climate, environment, and public health and safety.”

Mitch Jones, managing director of policy and litigation at Food & Water Watch, described the DOE’s decision to grant approvals while the federal government’s public interest review of LNG exports was still ongoing as “ridiculous.”

“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,” Jones said in a press release.

Concerns Over LNG Export Freeze

More than 150 Republican lawmakers had previously pushed back against the moratorium, arguing that the pause was “economically and strategically dangerous and unnecessary.”

Earlier in March, a group of states, led by Louisiana, mounted a legal challenge to the moratorium. They argued that the LNG export ban threatens the energy security of U.S. allies, puts infrastructure projects in the United States at risk, and deprives states of valuable LNG export revenue.

“The LNG Export Ban implicates an issue of profound national importance,” the coalition of 16 states wrote in the complaint. “LNG exports account for billions of dollars to the economy and thousands of jobs. They also raise serious questions of national security.”

The states also argued that the temporary moratorium violated the Administrative Procedure Act, the Congressional Review Act, and the U.S. Constitution.

Louisiana was joined by Alabama, Alaska, Arkansas, Florida, Georgia, Kansas, Mississippi, Montana, Nebraska, Oklahoma, South Carolina, Texas, Utah, West Virginia, and Wyoming in the legal action.

A federal judge at the U.S. District Court for the Western District of Louisiana sided with the coalition of states in July.

Tom Ozimek contributed to this report.