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Understanding the Role of Liquefied Natural Gas; Part 2

Posted: February 26, 2012

This week's article is the second of a three-part series discussing liquified natural gas

Who Regulates US LNG Facilities?

The US Department of Energy (DOE) has statutory authority under the Natural Gas Act to license the import or export of LNG. Prior to granting a license, DOE must consider several issues including energy security, impact on domestic gross product, domestic need for the project and whether the project is in the public’s interest.
Proposed LNG facilities must also seek authorization from the Federal Energy Regulatory Commission (FERC) as the lead agency in the US that approves the physical construction and operation of LNG terminals. FERC works closely with the US Coast Guard, States, and local communities to evaluate the environmental, safety and security aspects of proposed and operating LNG terminals and tankers. In addition the US Coast Guard is responsible for insuring the safety of marine operations at LNG terminals and on tankers in US coastal waters. The US Department of Transportation is also involved with the regulation of LNG tanker operations. Other federal agencies such as the US EPA, US Fish and Wildlife Service, Army Corps of Engineers and the National Oceanic and Atmospheric Administration also play a role in regulating LNG facilities.

How much LNG does the US currently import and export?

According to the US Energy Information Administration (US EIA), the US imported 432 billion cubic feet (Bcf) of natural gas in the form of LNG in 2010. This amounts to 1.79% of the total natural gas consumed in the US. The leading sources of these imports were Trinidad and Tobago, Egypt, Qatar and Nigeria. Other countries like Yemen, Norway and Peru also sent LNG to the US during 2010.
The US currently exports LNG globally from a terminal located in Kenai, Alaska. In 2010, exports totaled 65 Bcf with the majority of this production going to Japan. The United Kingdom, South Korea, Spain, Brazil and India also imported US LNG during 2010. Small volumes of LNG were exported to China starting in 2011.

Next week:  LNG future and impacts of LNG export

written by Dave Messersmith, Penn State Extension Educator, Wayne County, and Marcellus Education Team