U.S. seeks overhaul of liquified natural gas regulations

By EPN staff

After two decades, the U.S. Department of Transportation is updating its rules for liquefied natural gas (LNG) facilities to support a fast-growing energy export industry.   

In compliance with the president’s “Unleashing American Energy” executive order, the agency is cutting regulations and updating guidance to increase American LNG export capacity, expedite new infrastructure projects and support small-scale market suppliers. 

The Pipeline and Hazardous Materials Safety Administration (PHMSA), within the DOT, recently collected public comment about regulations covering LNG facilities.

Why it matters

Since 2004, the last time these regulations were updated, the LNG export industry has grown substantially. In 2024, the U.S. exported the greatest volume of LNG of any nation, according to the DOE.

This year, DOT analysts expect the U.S. will export 5 trillion billion cubic feet (BCF) for the year. Eight new LNG terminals are under construction, and plans for an additional 12 have been approved.

A recent study by S&P Global estimated that export capacity will “double over the next 5 years, driving an average of half a million jobs per year and representing an incremental $1.3 trillion dollar boost to the economy through 2040.”

Congress, the Government Accountability Office and those within the industry have called upon the DOT to revise regulations in light of new technology and best practices learned over the past two decades.

The bigger picture

Natural gas is the cleanest burning fossil fuel, producing half as much carbon dioxide when burned as coal. Natural gas surpassed coal as the main source of U.S. energy in 2016.

The U.S. has been a net exporter of natural gas since 2017, driven in part by increases in U.S. natural gas production and LNG export terminal capacity. Exports to Europe in 2023 rose as countries reduced their consumption of Russian natural gas.

Liquifying natural gas enables U.S. exporters to ship the product overseas, as natural gas is 600 times smaller in volume than it is in its gaseous state and ideal for transportation when pipelines are not available. At LNG facilities, natural gas is cooled to 260 degrees below zero for export by ship or imported, heated to a gas state and transferred to pipelines to power plants and industrial consumers.

The export of US LNG also enables other countries to reduce their reliance on coal.

Additional details

In addition to updating regulations over LNG facilities, the PHMSA is revising rules governing natural gas pipelines and transportation of petroleum-based fuels to support American energy development.

“Increased U.S. energy production is creating heightened demands on pipeline infrastructure and export facilities, making the safety and reliability of our energy transportation network more critical than ever,” said PHMSA Acting Administrator Ben Kochman.