DOE Changes LNG Export Destination Reporting Requirement; Proposes Interpretive Rule

The U.S. Department of Energy (“DOE”) announced yesterday that it has issued a policy statement under which it is discontinuing its practice, adopted in 2016, of including an “end use” reporting provision in orders authorizing the export of domestically produced natural gas, including LNG. Currently, many export authorization holders are required to track and report the country (or countries) of destination into which their exported LNG or natural gas was “received for end use.” DOE will revert to its prior practice of requiring authorization holders to report, in relevant part, the country (or countries) into which the exported LNG or natural gas “was actually delivered.” The policy statement affects only future export authorizations issued by DOE. However, concurrently with the issuance of this policy statement, DOE is issuing a blanket order removing the end use provision from applicable existing export authorizations issued from February 2016 to present.

DOE is also proposing an interpretive rule to clarify certain DOE regulations governing the export of natural gas, including LNG. DOE is proposing to clarify the types of contracts and purchase agreements associated with the export of natural gas that DOE considers to be “relevant” for purposes of its regulations. DOE’s regulations also impose a “continuing obligation” on authorization holders to notify DOE “as soon as practicable” of any prospective or actual changes to the information submitted during the application process upon which the authorization was issued, including “the terms and conditions of any applicable contracts.” In the proposed interpretative rule, DOE is seeking to clarify the phrase “as soon as practicable” to mean within 30 days of the execution of the contracts. Comments on the proposed interpretive rule are due by January 19, 2019.