Energy Transfer LP is testing the regulatory waters after a major court decision on the Biden administration’s LNG pause, requesting that the U.S. Department of Energy (DOE) “expeditiously act” on its export license application for Lake Charles LNG.
Earlier in the month, U.S. District Court Judge James Cain of the Western District of Louisiana issued a preliminary order, calling the administration’s decision to halt non-free trade agreement (FTA) permits while it reviewed the impacts on domestic prices unlawful. While DOE has yet to issue a response, Cain’s order directed the agency to restart the review of applications while it conducts studies (No. 2:24-CV-00406).
Energy Transfer sent a letter to DOE staff, asking the agency to comply with the court’s order and arguing the company’s application for its liquefied natural gas facility in Louisiana is “best suited” for an immediate decision.
“DOE’s ‘pause’ on its review of [the company’s] application has caused considerable angst among companies that have previously entered into long-term LNG offtake contracts with Lake Charles LNG, as these companies have real world needs for these committed LNG volumes,” attorney Thomas Knight wrote in the request.
Environmental opponents quickly shot back against Energy Transfer’s request, accusing the company of exaggerating the impact of the court’s order. In a release from several Louisiana environmental groups and the Sierra Club, activists noted DOE is not obligated to grant a license for Lake Charles LNG or other facilities.
“If DOE chooses to take immediate action, DOE should deny the application because the project’s extensive impacts on U.S. consumers, U.S. global strategic interest, local communities and the climate render Lake Charles LNG’s proposal contrary to the public interest,” representatives for the groups said in a statement.
Progress And Setbacks
Energy Transfer submitted a new application last August for non-FTA exports from Lake Charles LNG after DOE denied a request for an extension of its export license.
Since then, the company has increased its tentative deals to cover almost 8 million metric tons/year (mmty) of offtake from the proposed 16.45 mmty facility, according to Kpler data. Management has previously guided it could reach a final investment decision with around 12 mmty under contract.
[In the Eye of the Storm: North American LNG project developers continue to grapple with the Biden administration's pause on non-FTA permits. Has the pause given impetus to other projects? How are Mexico LNG projects advancing? Tune in to hear from LNG industry analyst Sergio Chapa in the latest episode of NGI's Hub & Flow.]
The lack of certainty on the timeline of non-FTA permits in the United States, however, has created “setbacks” in its discussions with potential customers, according to the company.
In its latest construction update to the Federal Energy Regulatory Commission, Energy Transfer reported it was still evaluating engineering, procurement and construction bids before making a decision on contractors.
The Dallas-based firm has already awarded some contracts for early work on the project and is “currently in the process of determining whether to issue notices to proceed for said projects” in light of DOE’s pause, according to the company.
Since the policy review and permit pause began in January, the development timelines for at least 17 proposed LNG projects have been impacted. That list includes at least seven proposed for the United States and Mexico that are commercially advanced, according to an NGI review of pending projects.
Those seven projects amount to a combined 9.3 Bcf/d in export capacity that previously were expected to come online around 2030.
