Multiple presidential administrations stretching back to the Gerald Ford administration have failed to follow the principal law governing natural gas and other energy exports requiring rules restricting sending American natural gas abroad, creating huge uncertainty for the future of natural gas exports and exposing the U.S. government to lawsuits, Senator Edward J. Markey explained in a letter to the Obama administration.
The Energy Policy and Conservation Act of 1975 (EPCA) required that rules be created and issued to prohibit both crude oil and natural gas exports but only the government standards for crude oil exports were ever released by the Commerce Department. The Department of Energy has issued separate regulations under a preexisting statute – the Natural Gas Act of 1938 – to authorize the export of natural gas but those regulations do not satisfy the requirement of the 1975 law.
By not creating the rules for natural gas, the authority of DOE to approve natural gas exports is cast in doubt, and the government could potentially be sued by a company or organization harmed by the increased prices that will come from sending domestic natural gas abroad.
Since May of 2011, DOE approved seven licenses to export liquefied natural gas at six export facilities and has for years approved exports through pipelines to Canada and Mexico. The total amount approved by DOE through these terminals and pipelines has now far exceeded the level that DOE’s own study said would increase domestic natural gas prices by more than 50 percent.
Press Release, June 18, 2014