Basic information
Outline of the system
Imports of natural gas, whether by pipeline or as liquefied natural gas (LNG), are regulated under Section 3 of the Natural Gas Act (NGA) (15 U.S.C. 717b), which provides that "no person shall ... import any natural gas from a foreign country without first having secured an order ... authorizing it to do so." Section 3 also provides that such orders shall be issued unless, after opportunity for hearing, it is found that the proposed importation will not be consistent with the public interest. Authority over imports of natural gas rests with the Secretary of Energy. The authority to regulate natural gas imports under Section 3 of the Natural Gas Act, as amended, has been delegated to the Under Secretary for Science and Innovation pursuant to Delegation Order No. S1-DEL-S4-2022 (13 June 2022). This authority has been further re-delegated from the Under Secretary to the Assistant Secretary for Fossil Energy (now Fossil Energy and Carbon Management) under Redelegation Order No. S4-DEL-FE1-2022, issued on13 June 2022.
On 24 October 1992, the Energy Policy Act of 1992 (EPACT 92) was enacted. Section 201 of EPACT 92 amended Section 3 of the NGA by adding subsections (b) and (c), which in effect eliminates the Department of Energy's (DOE) need to make a public interest finding for natural gas imports from "a nation with which there is in effect a free trade agreement requiring national treatment for trade in natural gas," and for imports of liquefied natural gas (LNG). Pursuant to the amendment, imports of natural gas (and LNG) from countries with which the United States has a free trade agreement calling for national treatment for trade in natural gas, and LNG imports from other countries, are "deemed to be consistent with the public interest, and applications for such importation… shall be granted without modification or delay."
Currently, virtually all natural gas import applications filed with DOE are reviewed under Section 3(c) of the NGA. DOE is not required to evaluate these applications to determine whether they are "in the public interest". In these cases, the agency does not solicit public comments, or conduct a review of the application under the National Environmental Policy Act. Rather, after these import applications are reviewed for completeness and legal sufficiency, DOE prepares and issues the authorizations as requested. These applications take less time to process than cases that do not fall under Section 3(c) of the NGA.
In addition, with respect to the import or export of natural gas (including LNG), the Secretary of Energy has delegated authority to the Federal Energy Regulatory Commission (FERC) (Delegation Order No. S1-DEL-FERC-2006 (16 May 2006)) to approve or disapprove the construction and operation of particular facilities, the site at which such facilities shall be located, and, with respect to natural gas that involves the construction of new domestic facilities, the place of entry.
Product coverage
The products covered are natural gas, including liquefied natural gas (LNG), and compressed natural gas (CNG).
Nature of licensing
Automatic
If Automatic, administrative purpose
Not applicable.
Non-Automatic
If Non-Automatic, description of the notified Non-Automatic Licensing regime
Please see the response above for “Outline of the system”. Additionally, DOE imposes standard reporting requirements as part of each import authorization.
Products under restriction as to the quantity or value of imports
The licensing is not intended to restrict the quantity or value of natural gas imports.
Questions for products under restriction as to the quantity or value of imports
Not applicable.
The system applies to products originating from which country?
The system applies to goods originating from any country.
Expected duration of licensing procedure
Upon receipt of a complete application, DOE will issue an import authorization “without modification or delay,” as required by NGA section 3(c).
Legal requirements
Is the licensing statutorily required?
See response to Question 1. Licensing is statutorily required.
Does the legislation leave designation of products to be subject to licensing to administrative discretion?
Is it possible for the government to abolish the system without legislative approval?
Eligibility of applicants
Is there a system of registration of persons or firms permitted to engage in importation?
What persons or firms are eligible to apply for a licence?
All persons, firms, and institutions are eligible to apply for authorization to import natural gas. Traditionally, entities applying for such authorizations have been natural gas pipeline companies, natural gas producers, natural gas marketers, and utility companies.
Is there a registration fee?
Is there a published list of authorized importers?
Contact point for information on eligibility
Ministry/Authority
Department of Energy’s Office of Fossil Energy
Address
1000 Independence Ave., SW Washington, DC 20585
Telephone
202-586-6660
Fax
202-586-6050; 6221
Contact officer
Not applicable.
Submission of an application
Administrative body(ies) for submission of an application
Department of Energy’s Office of Fossil Energy
Documentation requirements
What information is required in applications?
Import authorization proceedings are initiated by the filing of an application. The application is not a standard form, but rather an individual document incorporating basic information about the proposed import arrangement, and exhibits required by the rules covering such applications set forth in DOE regulation (10 C.F.R. Part 590). NGA Sections 3(b) and (c) have necessitated creation of a bifurcated process in the manner in which DOE reviews applications to import natural gas. Applications that involve gas imports from nations with which the United States has a free trade agreement requiring national treatment for trade in natural gas (free trade agreement countries) and LNG imports from other countries must be granted by DOE "without modification or delay". As a result, DOE's action of issuing such import authorizations is ministerial in nature.
For applications involving gas (other than LNG) imports from nations with which the United States does not have a free trade agreement requiring national treatment for trade in natural gas, DOE must determine whether the import proposal is "in the public interest". Those applications are subject to the administrative procedures specified in 10 C.F.R. Part 590.
What documents is the importer required to supply with the application?
Window of submission of an application
How far in advance of importation must application for a licence be made?
DOE regulations (10 C.F.R. Part 590) specify that an applicant for a natural gas import authorization should apply 90 days prior to the anticipated date for start-up of the import.
Are there any limitations as to the period of the year during which application for licence can be made? If so, explain
There are no limitations as to the period of the year during which an application for authorization to import natural gas may be made.
Issuing the license
Can a licence be granted immediately on request?
An authorization to import natural gas can be granted as soon as an applicant has filed a legally sufficient application, and as soon as that application is reviewed and processed.
Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence
However, the issuance of an import authorization normally takes less than four weeks if reviewed under Section 3(c) of the NGA.
Which administrative body is responsible for approving application of licences?
Licensing applications are considered by a single administrative organ, the Office of Fossil Energy, U.S. Department of Energy and Carbon Management, the Forrestal Building, 1000 Independence Avenue, S.W., Washington D.C. 20585.
Must the applications be passed on to other organs for visa, note or approval?
Are there any other conditions attached to the issue of a licence?
No conditions are attached to an authorization to import natural gas from free trade agreement countries or authorizations to import LNG from any country.
Fees and other administrative charges
Is there any licensing fee or administrative charge?
A filing fee.
What is the amount of the fee or charge?
A filing fee of US$ 50.00 is charged for each application.
Is there any deposit or advance payment required associated with the issue of licences?
There is no deposit or advance payment requirement associated with the issuance of an order to import natural gas.
Amount or rate?
Is it refundable?
What is the period of retention?
What is the purpose of this requirement?
Refusal of an application
Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria?
There are no circumstances under which an import authorization can be refused, as long as an applicant has submitted a legally sufficient application. Information which must be contained in the application is specified in 10 C.F.R. 590.202.
Are the reasons for any refusal given to applicants?
Have applicants a right of appeal in the event of refusal to issue a licence?
If so, to what bodies and under what procedures?
Importation
Are there any limitations as to the period of year during which importation may be made?
There are no limitations as to the period of the year during which an application for authorization to import natural gas may be made.
What documents are required upon actual importation?
DOE's application procedures are described at the following website: http://energy.gov/fecm/how-obtain-authorization-import-andor-export-natu...
Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
Each import authorization order requires natural gas importers to report sales information monthly to DOE. Information reported includes volume, price, names of sellers and buyers, and other details of the import transactions on Form FE-746R.
Conditions of licensing
What is the period of validity of a licence? Can the validity be extended? How?
The duration of a natural gas import authorization usually is specified in the Opinion and Order issued by DOE, and depends upon the particular circumstances of the import arrangement. An import authorization can be extended upon application to DOE.
Is there any penalty for the non-utilization of a licence or a portion of a licence?
There is no penalty for non-utilization of an order to import natural gas.
Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Authorizations to import natural gas are not transferable between importers without approval.
Foreign Exchange
Is foreign exchange automatically provided by the banking authorities for goods to be imported?
Not applicable.
Is a licence required as a condition to obtaining foreign exchange?
Not applicable.
Is foreign exchange always available to cover licences issued?
Not applicable.
What formalities must be fulfilled for obtaining the foreign exchange?
Not applicable.