U.S. Government Accountability Office Issues Report on LNG Exports

GAO Report on Natural Gas Exports: Updated Guidance and Regulations Could Improve Facility Permitting Processes

In 2019, about 39% of U.S. natural gas exports went through export facilities—in which the gas is liquefied and loaded onto ships for transport. Multiple federal agencies regulate export facility design. Federal guidance says that agencies should review regulations every 3-5 years and, if needed, adopt current technical standards for safety and environmental protection.

But some regulations haven’t been updated. For example, one agency requires export facilities to comply with a 1994 fire extinguisher standard that includes some obsolete extinguisher types. We recommended that agencies establish a process to regularly update regulations.

What GAO Found

Federal agencies have incorporated most but not all key collaboration practices in the permitting processes for export facilities for liquefied natural gas (LNG). GAO has identified seven key practices that can help sustain collaboration among federal agencies, including reviewing and updating written guidance and agreements. The Maritime Administration (MARAD) and the U.S. Coast Guard (Coast Guard), which jointly lead the permitting process for LNG export facilities in federal waters, have incorporated all seven key practices. The Federal Energy Regulatory Commission (FERC), which leads the permitting process for LNG export facilities located on land or in state waters (facilities in both places are referred to as onshore facilities), has incorporated six of the key practices. However, FERC does not regularly review and update its interagency agreements, which outline agencies’ roles and responsibilities in the onshore permitting process, because it does not have a process to do so. Establishing a process to regularly review and update FERC’s agreements with other agencies would help FERC ensure that, in the near term, other agencies clearly understand and consistently implement the permitting process and, for the longer term, the agreements address policy changes that may affect the process.

FERC’s, the Pipeline and Hazardous Materials Safety Administration’s (PHMSA), and the Coast Guard’s regulations for permitting LNG export facilities do not incorporate all current technical standards. For example, FERC’s regulations cite an outdated 1984 earthquake standard, PHMSA’s regulations cite outdated fire safety standards from 2001, and the Coast Guard’s regulations cite an outdated 1994 standard for fire extinguishers. Guidance from the Office of Management and Budget states that agencies should conduct a standards-specific review of regulations that cite technical standards every 3 to 5 years and update the regulations with updated standards, if necessary. However, FERC, PHMSA, and the Coast Guard have not recently conducted such a review and FERC and PHMSA do not have processes in place to regularly do so. The Coast Guard has a process for conducting such reviews but it does not specify how frequently the reviews should occur. Without processes to conduct a standards-specific review of regulations every 3 to 5 years, the agencies cannot be assured that the regulations remain effective at ensuring safety.

See the full GAO report in our Library of Technical Reports & Research Papers.

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