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62 percent coal and 8 percent natural gas.
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In both China and India, electric generation
capacity is expected to increase substantially in coming years. For Japan, the largest importer of
LNG in the world, electric generation from fossil fuels was 74 percent of total generation in 2011
and has increased in the years following the Fukushima disaster—most recently to 85 percent in
2014.
366
In Europe, use of fossil fuels is slightly less than in the Asian nations noted above but
still significant, comprising 62 percent of electric generation in the United Kingdom and around
half for Spain for 2014, respectively.
367
The conclusions of the LCA GHG Report, combined with the observation that many
LNG-importing nations rely heavily on fossil fuels for electric generation, suggests that exports
of U.S. LNG may decrease global GHG emissions, although there is substantial uncertainty on
this point as indicated above. In any event, the record does not support the conclusion that U.S.
LNG exports will increase global GHG emissions in a material or predictable way. Therefore,
while we share the commenters’ strong concern about GHG emissions as a general matter, based
on the current record evidence, we do not see a reason to conclude that U.S. LNG exports will
significantly exacerbate global GHG emissions.
D.
Other Considerations
Our decision is not premised on an uncritical acceptance of the general conclusion of the
2014 and 2015 LNG Export Studies of net economic benefits from LNG exports. Both of those
365
U.S. Energy Information Administration, India Analysis Brief (last updated June 14, 2016), available at
http://www.eia.gov/beta/international/analysis.cfm?iso=IND.
366
U.S. Energy Information Administration, Japan Analysis Brief (last updated Feb. 2, 2017), available at:
http://www.eia.gov/beta/international/analysis.cfm?iso=JPN; see also
http://www.eia.gov/beta/international/data/browser/index.cfm#/?vo=0&v=H&start=1980&end=2014.
367
EIA, International Energy Statistics, available at:
http://www.eia.gov/beta/international/. To evaluate the effect that U.S. LNG exports may have on the mix of fuels
used for electric generation in Western Europe also requires consideration of the role of the European Trading
System (ETS). The ETS places a cap on GHG emissions. Therefore, where the cap is a binding constraint, the ETS
ultimately may ensure that the availability of U.S.-exported LNG will not affect aggregate emissions.
160
Studies and many public comments identify significant uncertainties and even potential negative
impacts from LNG exports. The economic impacts of higher natural gas prices and potential
increases in natural gas price volatility are two of the factors that we view most seriously. Yet
we also have taken into account factors that could mitigate such impacts, such as the current
oversupply situation and data indicating that the natural gas industry would increase natural gas
supply in response to increasing exports. Further, we note that it is far from certain that all or
even most of the proposed LNG export projects will ever be realized because of the time,
difficulty, and expense of commercializing, financing, and constructing LNG export terminals,
as well as the uncertainties inherent in the global market demand for LNG. On balance, we find
that the potential negative impacts of Delfin’s proposed exports are outweighed by the likely net
economic benefits and by other non-economic or indirect benefits.
More generally, DOE/FE continues to subscribe to the principle set forth in our 1984
Policy Guidelines
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that, under most circumstances, the market is the most efficient means of
allocating natural gas supplies. However, agency intervention may be necessary to protect the
public in the event there is insufficient domestic natural gas for domestic use. There may be
other circumstances as well that cannot be foreseen that would require agency action.
369
Given
these possibilities, DOE/FE recognizes the need to monitor market developments closely as the
impact of successive authorizations of LNG exports unfolds.
368
49 Fed. Reg. at 6684 (Feb. 22, 1984).
369
Some commenters previously asked DOE to clarify the circumstances under which the agency
would exercise its authority to revoke (in whole or in part) previously issued LNG export authorizations. We cannot
precisely identify all the circumstances under which such action would be taken. We reiterate our observation in
Sabine Pass that: “In the event of any unforeseen developments of such significant consequence as to put the public
interest at risk, DOE/FE is fully authorized to take action as necessary to protect the public interest. Specifically,
DOE/FE is authorized by section 3(a) of the Natural Gas Act … to make a supplemental order as necessary or
appropriate to protect the public interest. Additionally, DOE is authorized by section 16 of the Natural Gas Act ‘to
perform any and all acts and to prescribe, issue, make, amend, and rescind such orders, rules, and regulations as it
may find necessary or appropriate’ to carry out its responsibilities.” Sabine Pass, DOE/FE Order No. 2961, at 33
n.45 (quoting 15 U.S.C. § 717o).
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E.
Conclusion
We have reviewed the evidence in the record and relevant precedent in earlier non-FTA
export decisions and have not found an adequate basis to conclude that Delfin’s proposed exports
of LNG to non-FTA countries will be inconsistent with the public interest. We further find that
the intervenor-protestors in this proceeding—V4EI, Sierra Club, and APGA—have failed to
overcome the statutory presumption that the proposed export authorization is consistent with the
public interest. For these reasons, we are authorizing Delfin’s proposed exports to non-FTA
countries subject to the limitations and conditions described in this Order.
In deciding whether to grant a final non-FTA export authorization, we consider in our
decision-making the cumulative impacts of the total volume of all final non-FTA export
authorizations. With the issuance of this Order, DOE/FE has now issued final non-FTA
authorizations in a cumulative volume of exports totaling 21.0 Bcf/d of natural gas, or 7.67
trillion cubic feet per year, for the 26 final authorizations issued to date—Sabine Pass
Liquefaction, LLC (2.2 Bcf/d),
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Carib Energy (USA) LLC (0.04 Bcf/d),
371
Cameron LNG,
LLC (1.7 Bcf/d),
372
FLEX I (1.4 Bcf/d),
373
FLEX II (0.4 Bcf/d),
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Dominion Cove Point LNG,
370
Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961-A, FE Docket No. 10-111-LNG, Final Opinion and
Order Granting Long-Term Authorization to Export Liquefied Natural Gas From Sabine Pass LNG Terminal to
Non-Free Trade Agreement Nations (Aug. 7, 2012).
371
Carib Energy (USA) LLC, DOE/FE Order No. 3487, FE Docket No. 11-141-LNG, Final Order Granting Long-
Term, Multi-Contract Authorization to Export Liquefied Natural Gas in ISO Containers by Vessel to Non-Free
Trade Agreement Nations in Central America, South America, or the Caribbean (Sept. 10, 2014).
372
Cameron LNG, LLC, DOE/FE Order No. 3391-A, FE Docket No. 11-162-LNG, Final Opinion and Order
Granting Long-Term Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the Cameron
LNG Terminal in Cameron Parish, Louisiana, to Non-Free Trade Agreement Nations (Sept. 10, 2014).
373
Freeport LNG Expansion, L.P., et al., DOE/FE Order No. 3282-C, FE Docket No. 10-161-LNG, Final Opinion
and Order Granting Long-Term Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the
Freeport LNG Terminal on Quintana Island, Texas, to Non-Free Trade Agreement Nations (Nov. 14, 2014) (FLEX I
Final Order).
374
Freeport LNG Expansion, L.P., et al., DOE/FE Order No. 3357-B, FE Docket No. 11-161-LNG, Final Opinion
and Order Granting Long-Term Multi-Contract Authorization to Export Liquefied Natural Gas by Vessel from the
Freeport LNG Terminal on Quintana Island, Texas, to Non-Free Trade Agreement Nations (Nov. 14, 2014) (FLEX
II Final Order).
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