Sens. Cruz, Cassidy Question Lack of Movement on LNG Export Facility Permitting by Federal Agencies

WASHINGTON, D.C. – U.S. Sens. Ted Cruz (R-Texas) and Bill Cassidy (R-La.) sent a letter to the U.S. Department of Energy (DOE) urging for an extension of time to Delfin LNG LLC’s approval to export liquefied natural gas (LNG) to European and Asian countries due to inaction on the Delfin project by other federal agencies. The senators’ letter follows the Biden administration’s deference to the radical climate lobby, instituting a pause on all pending non-Free Trade Agreement (FTA) export permit applications.

In the letter, the senators wrote, “Delfin has a very strong case that it has met both criteria for an extension per DOE’s policy. Construction of the project has already begun, and there were extenuating circumstances beyond Delfin’s control that caused significant delays in the export date. … Delfin’s project is also critical to the natural gas needs of our allies. Delfin has already secured long-term contracts with five LNG off-takers for a total revenue stream of $19 billion.”

Read the full letter here or below.

BACKGROUND:

• In April 2024, Sen. Cruz helped secure a major investment for the Texas energy industry. Following Sen. Cruz’s probe into lengthy delays in reaching decisions on applications for deepwater ports by the Department of Transportation’s Maritime Administration (MARAD) for exporting oil and natural gas, MARAD granted the license to construct the deepwater portfor Houston’s Enterprise Products’ Sea Port Oil Terminal (SPOT).
• Congress established a legal timeline of 356 days for an approval or denial of such licenses. To skirt this 356-day timeline, MARAD has asked applicants for additional information, often paused the clock, and has not resumed it in many situations. As a result, the average project approval time has ballooned to approximately 1,000 days, which is close to triple the mandatory time limit.
• According to MARAD, the Delfin LNG project application was deemed complete on June 29, 2015. On March 13, 2017, MARAD issued its Record of Decision approving the project with certain conditions, but has still not issued the license, meaning this and other projects that would allow the production and export of substantial amounts of oil and gas every single day to America’s allies and help provide good-paying jobs for hard-working energy workers have remained stalled.
• There can be additional delays to the granting of licenses, such as completing an “Environmental Justice engagement plan” or other burdens under the National Environmental Policy Act (NEPA). For example, the SPOT project was delayed by several months after MARAD asked the applicant to re-publish for public comment a draft Environmental Impact Statement in Vietnamese. The uncertainty over whether and when MARAD will approve these plans (or move the goalposts) makes planning and investment difficult for applicants, thus reducing job growth and hurting allies seeking to import U.S. energy.
• In January 2024, Sens. Cruz and Cassidy led a group of 25 Republican colleagues in blasting the Biden administration for pausing all pending applications to export liquified natural gas (LNG) to non-Free Trade Agreement countries (FTA) at the behest of the radical climate lobby. The letter to President Biden and Department of Energy Secretary Jennifer Granholm was sent in response to the administration’s announcement to suddenly re-evaluate the criteria to approve LNG export permits.
• In December 2023, Sen. Cruz successfully fought to include language in last year’s National Defense Authorization Act that would increase transparency and expedite deepwater port licenses by MARAD.

Dear Secretary Granholm,

We write to request your appropriate and timely consideration of Delfin LNG LLC’s (Delfin) application for an extension of their current approval to export LNG to a non-FTA country (Ref. Docket Nos. 13-129-LNG; 13-147-LNG.). The export authorization under the current Department of Energy (DOE) license is valid until June 1, 2024. According to DOE’s policy statement, “Policy Statement on Export Commencement Deadlines in Authorizations to Export Natural Gas to Non-Free Trade Agreement Countries,” Delfin LNG LLC must file for an extension within 90 days of June 1, 2024.

As Deputy Secretary David Turk testified last month before the Senate Energy and Natural Resources Committee, DOE does not consider the current moratorium or pause on the issuance of new LNG export licenses to apply to extensions of existing projects. Delfin’s Floating LNG Project is the only LNG export project requiring an extension this year, as well as the only offshore Floating LNG (FLNG) project.

Delfin has a very strong case that it has met both criteria for an extension per DOE’s policy. Construction of the project has already begun, and there were extenuating circumstances beyond Delfin’s control that caused significant delays in the export date, including MARAD’s failure to follow the deadlines in the Deepwater Port Act and new NEPA requirements in the Fiscal Responsibility Act. However, should DOE conclude that the start-of-construction criteria has not been met, Delfin requests a conditional extension that allows Delfin nine months to make Final Investment Decision on the project. This conditional extension should alleviate any remaining DOE concerns about the project proving real progress towards actual export capability thereby reducing and helping to eliminate “LNG export authorization overhang.”

Delfin’s project is also critical to the natural gas needs of our allies. Delfin has already secured long-term contracts with five LNG off-takers for a total revenue stream of $19 billion. Delfin’s single largest customer is Centrica LNG, whose parent company is the largest energy supplier in the United Kingdom. Over 15 years, Centrica LNG committed to purchase one million tonnes per annum of LNG.

By granting this extension and allowing proven and newly deployed technologies the time to fully mature, DOE will both foster innovative FLNG technology and prevent stranded assets. We look forward to your action on this request as soon as possible.

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