Filing of Contracts and Purchase Agreements Associated With the Export of Natural Gas, 65111-65113 [2018-27450]

Download as PDF Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules amozie on DSK3GDR082PROD with PROPOSALS1 comment process. For example, a substantive response is required when: (a) The comment causes the NRC staff to reevaluate (or reconsider) its position or conduct additional analysis; (b) The comment raises an issue serious enough to warrant a substantive response to clarify or complete the record; or (c) The comment raises a relevant issue that was not previously addressed or considered by the NRC staff. (2) The comment proposes a change or an addition to the rule, and it is apparent that the rule would be ineffective or unacceptable without incorporation of the change or addition. (3) The comment causes the NRC staff to make a change (other than editorial) to the rule. For procedural information, see the direct final rule published in the Rules and Regulations section of this issue of the Federal Register. III. Background The FOIA provides that any person has a right to request and obtain access to federal agency records, except to the extent that any portions of those records are exempt from public disclosure. The FOIA also authorizes agencies to issue regulations specifying a schedule of fees for the processing of those requests (5 U.S.C. 552(a)(4)(A)). These fees are limited to reasonable standard charges for document search, duplication, and review, which may be charged depending on the purpose for which the records are sought and the class of requestor. The NRC’s implementing FOIA regulations are found in part 9 of Title 10 of the Code of Federal Regulations (10 CFR). The NRC charges fees for the search and review of agency records in accordance with § 9.37, ‘‘Fees for search and review of agency records by NRC personnel,’’ (although as specified in § 9.39, ‘‘Search and duplication provided without charge,’’ the NRC will search for records in some instances without charge, and requests for waivers or reduction of fees can be sought as specified in § 9.41, ‘‘Requests for waiver or reduction of fees’’). Consistent with Office of Management and Budget (OMB) guidelines on fee schedules (52 FR 10012; March 27, 1987), the NRC recoups the direct costs of search and review by charging the hourly rates of the employees performing the task, plus 16 percent for fringe benefits. These OMB guidelines also provide that, where a homogenous or single class of personnel is used, agencies may establish reasonable average rates for the range of salary grades typically involved. VerDate Sep<11>2014 18:08 Dec 18, 2018 Jkt 247001 The NRC first established fees for search and review of agency records in 1987 (52 FR 49350; December 31, 1987), and last updated these fees in 2010 (75 FR 41368; July 16, 2010). Recently, as part of the agency’s biennial review of fees performed under the Chief Financial Officers Act of 1990 (31 U.S.C. 902(a)(8)), the NRC determined that the search and review rates for agency clerical staff and for professional/ managerial staff needed to be increased in order to ensure the NRC continues to recover the direct costs of these activities. Thus, based on the results of this biennial review, § 9.37(a) will be changed from a GG–7/step 6 salary rate to a GG–9/step 7 salary rate; and § 9.37(b) will be changed from a GG–13/ step 6 salary rate to a GG–14/step 7 salary rate. IV. Plain Writing The Plain Writing Act of 2010 (Pub. L. 111–274) requires Federal agencies to write documents in a clear, concise, well-organized manner that also follows other best practices appropriate to the subject or field and the intended audience. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, ‘‘Plain Language in Government Writing,’’ published June 10, 1998 (63 FR 31883). The NRC requests comment on the proposed rule with respect to clarity and effectiveness of the language used. V. Availability of Documents The NRC may post materials related to this document, including public comments, on the Federal Rulemaking website at https://www.regulations.gov under Docket ID NRC–2017–0144. The Federal Rulemaking website allows you to receive alerts when changes or additions occur in a docket folder. To subscribe: (1) Navigate to the docket folder (NRC–2017–0144); (2) click the ‘‘Sign up for Email Alerts’’ link; and (3) enter your email address and select how frequently you would like to receive emails (daily, weekly, or monthly). List of Subjects in 10 CFR Part 9 Administrative practice and procedure, Courts, Criminal penalties, Freedom of information, Government employees, Privacy, Reporting and recordkeeping requirements, Sunshine Act. For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; the Nuclear Waste Policy Act of 1982, as amended; and 5 U.S.C. PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 65111 552 and 553, the NRC is proposing the following amendments to 10 CFR part 9: PART 9—PUBLIC RECORDS 1. The authority citation for part 9 continues to read as follows: ■ Authority: Atomic Energy Act of 1954, sec. 161 (42 U.S.C. 2201); Energy Reorganization Act of 1974, sec. 201 (42 U.S.C. 5841); 44 U.S.C. 3504 note. Subpart A also issued under 31 U.S.C. 9701. Subpart B also issued under 5 U.S.C. 552a. Subpart C also issued under 5 U.S.C. 552b. 2. In § 9.37, revise paragraphs (a) and (b) to read as follows: ■ § 9.37 Fees for search and review of agency records by NRC personnel. * * * * * (a) Clerical search and review at a salary rate that is equivalent to a GG–9/ step 7, plus 16 percent fringe benefits; (b) Professional/managerial search and review at a salary rate that is equivalent to a GG–14/step 7, plus 16 percent fringe benefits; and * * * * * Dated at Rockville, Maryland, this 3rd day of December 2018. For the Nuclear Regulatory Commission. Margaret M. Doane, Executive Director for Operations. [FR Doc. 2018–27168 Filed 12–18–18; 8:45 am] BILLING CODE 7590–01–P DEPARTMENT OF ENERGY 10 CFR Part 590 Filing of Contracts and Purchase Agreements Associated With the Export of Natural Gas Office of Fossil Energy, Department of Energy. ACTION: Proposed interpretive rule. AGENCY: The Department of Energy (DOE or the Department) is proposing an interpretive rule to clarify certain DOE regulations governing the export of natural gas, including liquefied natural gas (LNG), under the Natural Gas Act (NGA). Under DOE’s regulations, any person seeking authorization to export natural gas from the United States, or to amend an existing export authorization, must provide DOE’s Office of Fossil Energy (DOE/FE) with a copy of ‘‘all relevant contracts and purchase agreements.’’ DOE is proposing this interpretive rule to clarify the types of contracts and purchase agreements associated with the export of natural gas that DOE considers to be ‘‘relevant’’ for purposes of these regulations. DOE’s SUMMARY: E:\FR\FM\19DEP1.SGM 19DEP1 amozie on DSK3GDR082PROD with PROPOSALS1 65112 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules regulations also impose a ‘‘continuing obligation’’ on authorization holders to notify DOE/FE ‘‘as soon as practicable’’ of any prospective or actual changes to the information submitted during the application process upon which the authorization was issued, including ‘‘the terms and conditions of any applicable contracts.’’ In this proposed interpretative rule, DOE is seeking to clarify the phrase ‘‘as soon as practicable’’ to mean within 30 days of the execution of the contracts. DATES: Public comment on this proposed interpretive rule will be accepted until January 18, 2019. ADDRESSES: You may submit comments using any of the following methods, although email is preferred: 1. Email: Send email to fergas@ hq.doe.gov or regulations.gov. Include ‘‘Natural Gas Contract Guidance’’ in the subject line of the email. Please include the full body of your comments in the text of the message or as an attachment. 2. Regular Mail: U.S. Department of Energy (FE–34), Office of Regulation, Analysis, and Engagement, Office of Fossil Energy, P.O. Box 44375, Washington, DC 20026–4375. 3. Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, etc.): U.S. Department of Energy (FE–34), Office of Regulation, Analysis, and Engagement, Office of Fossil Energy, Forrestal Building, Room 3E–042, 1000 Independence Avenue SW, Washington, DC 20585. Telephone: (202) 586–9478. Due to potential delays in the delivery of postal mail, we encourage respondents to submit comments electronically to ensure timely receipt. PLEASE NOTE: If submitting a filing via email, please include all related documents and attachments (e.g., exhibits) in the original email correspondence. Please do not include any active hyperlinks or password protection in any of the documents or attachments related to the filing. All electronic filings submitted to DOE must follow these guidelines to ensure that all documents are filed in a timely manner. Any hardcopy filing submitted greater in length than 50 pages must also include, at the time of the filing, a digital copy on disk of the entire submission. Docket: This notice of proposed rulemaking and any comments that DOE receives will be made available on DOE’s website at: https:// www.energy.gov/fe/services/natural-gasregulation. FOR FURTHER INFORMATION CONTACT: Amy Sweeney, U.S. Department of Energy (FE–34), Office of Regulation, Analysis, and Engagement, Office of VerDate Sep<11>2014 18:08 Dec 18, 2018 Jkt 247001 Fossil Energy, Forrestal Building, Room 3E–042, 1000 Independence Avenue SW, Washington, DC 20585, (202) 586– 2627, Email: amy.sweeney@hq.doe.gov; or Cassandra Bernstein or Charles Park, U.S. Department of Energy (GC–76), Office of the Assistant General Counsel for Electricity and Fossil Energy, Forrestal Building, Room 6D–033, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586–9793 or (202) 287– 6531, Email: cassandra.bernstein@ hq.doe.gov or charles.park@hq.doe.gov. exportation will not be consistent with the public interest.4 The Department of Energy is responsible for authorizing exports of natural gas to foreign nations pursuant to section 3 of the NGA, 15 U.S.C. 717b.1 Under section 3(c) of the NGA, exports of natural gas to countries with which the United States has entered into a free trade agreement (FTA) requiring national treatment for trade in natural gas and with which trade is not prohibited by U.S. law or policy (FTA countries) are ‘‘deemed to be consistent with the public interest.’’ Therefore, applications authorizing natural gas and LNG exports to FTA countries must be granted ‘‘without modification or delay.’’ 2 Section 3(a) of the NGA governs exports to any other country with which trade is not prohibited by U.S. law or policy (non-FTA countries). DOE has consistently interpreted section 3(a) of the NGA as creating a rebuttable presumption that a proposed export of natural gas to non-FTA countries is in the public interest.3 Accordingly, DOE conducts an informal adjudication and grants the application unless DOE finds that the proposed II. Regulatory Background DOE’s regulations implementing section 3 of the NGA are codified in 10 CFR part 590. Under those regulations, ‘‘[a]ny person seeking authorization to . . . export natural gas . . . from the United States, [seeking] to amend an existing . . . export authorization, or seeking any other requested action’’ 5 is required to provide DOE/FE with, inter alia, ‘‘a copy of all relevant contracts and purchase agreements.’’ 6 DOE’s regulations do not specify what types of ‘‘contracts and purchase agreements’’ associated with the export of natural gas are considered ‘‘relevant’’ for purposes of 10 CFR 590.202(c). DOE implements this regulatory authority as part of its long-term export authorizations for natural gas, including LNG.7 For example, in the ‘‘Terms and Conditions’’ section of DOE/FE’s longterm LNG export orders, DOE/FE states that authorization holders are required to file, or cause to be filed, ‘‘any relevant long-term commercial agreements’’ pursuant to which the authorization holder or LNG title-holder (i.e., Registrant) exports LNG ‘‘once those agreements have been executed.’’ 8 Similarly, in the ‘‘Order’’ section, DOE/ FE states that the authorization holder shall file, or cause others to file, ‘‘all executed long-term contracts’’ associated with both the long-term export of LNG and the long-term supply of natural gas to the export facility.9 DOE regulations also impose a ‘‘continuing obligation’’ on authorization holders to give DOE/FE ‘‘written notification, as soon as practicable, of any prospective or actual changes to the information submitted during the application process upon which the authorization was based, including, but not limited to, changes . . . to the terms and conditions of any 1 Authority to regulate the imports and exports of natural gas, including LNG, under section 3 of the NGA (15 U.S.C. 717b) has been delegated to the Assistant Secretary for Fossil Energy in Redelegation Order No. 00–006.02, issued on November 17, 2014. 2 15 U.S.C. 717b(c). The United States currently has FTAs requiring national treatment for trade in natural gas with Australia, Bahrain, Canada, Chile, Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, Republic of Korea, and Singapore. FTAs with Israel and Costa Rica do not require national treatment for trade in natural gas. 3 See Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 189, 203 (D.C. Cir. 2017) (‘‘We have construed [NGA section 3(a)] as containing a ‘general presumption favoring [export] authorization.’ ’’) (quoting W. Va. Pub. Serv. Comm’n v. U.S. Dep’t of Energy, 681 F.2d 847, 856 (D.C. Cir. 1982)). 4 See id. (‘‘there must be ‘an affirmative showing of inconsistency with the public interest’ to deny the application’’ under NGA section 3(a)) (quoting Panhandle Procedures & Royalty Owners Ass’n v. Econ Regulatory Admin., 822 F.2d 1105, 1111 (D.C. Cir. 1987)). 5 10 CFR 590.201(a). 6 Id. at 590.202(c). 7 For purposes of this proposal, the terms ‘‘authorization’’ and ‘‘order’’ are used interchangeably. 8 See, e.g., Eagle LNG Partners Jacksonville II LLC, DOE/FE Order No. 4078, FE Docket No. 17–79– LNG, Opinion and Order Granting Long-Term, Multi-Contract Authorization to Export Liquefied Natural Gas in ISO Containers Loaded at the Eagle Maxville Facility in Jacksonville, Florida, and Exported by Vessel to Free Trade Agreement and Non-Free Trade Agreement Nations (Sept. 15, 2017), at 43 (Terms and Conditions Para. H). 9 See id. at 46–47 (Ordering Paras. I(i), (ii)). SUPPLEMENTARY INFORMATION: I. Statutory Background II. Regulatory Background III. Proposed Regulatory Interpretations IV. Public Comment Procedures V. Approval of the Office of the Secretary I. Statutory Background PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 E:\FR\FM\19DEP1.SGM 19DEP1 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Proposed Rules applicable contracts.’’ 10 DOE regulations do not specify when submission of such written notification must be made to constitute ‘‘as soon as practicable.’’ However, in DOE/FE’s long-term export orders, DOE/FE expressly ‘‘finds that the submission of all such [long-term commercial export] agreements or contracts within 30 days of their execution . . . will be consistent with the ‘to the extent practicable’ requirement of section 590.202(b).’’ 11 Likewise, DOE/FE imposes a 30-day time period for an authorization holder to notify DOE/FE of a change in the company name, the term of any long-term contracts, and other relevant modifications.12 III. Proposed Regulatory Interpretations DOE proposes the following clarifications to provide specificity, and thereby to reduce potential confusion and regulatory burdens, concerning DOE/FE’s practice under the aforementioned regulations. As set forth above, these proposed clarifications are consistent with DOE/FE’s practice under its long-term export authorizations, and thus are intended to provide additional guidance for authorization holders in complying with existing and/or future orders. A. Proposed Interpretation of 10 CFR 590.202(c) DOE proposes to clarify the types of ‘‘contracts and purchase agreements’’ associated with the export of natural gas that are ‘‘relevant’’ for purposes of 10 CFR 590.202(c). DOE proposes to interpret the term ‘‘relevant contracts and purchase agreements’’ to include the following types of executed,13 longterm 14 binding commercial agreements associated with the export of natural gas (collectively, Executed Agreements): i. Natural gas supply agreements; ii. Terminal service agreements; iii. Purchase and sale agreements; 15 10 10 CFR 590.407. e.g., Eagle LNG Partners Jacksonville II LLC, DOE/FE Order No. 4078, at 43 (Terms and Conditions Para. H); see also id. at 46–47 (Ordering Paras. I(i), (ii), K, Q) (imposing 30-day reporting periods). 12 See id. at 48 (Ordering Para. L). 13 ‘‘Executed’’ means that all parties to a longterm commercial agreement have signed the agreement, regardless of whether conditions precedent have been met, and that such an agreement is binding upon all parties to the transaction. 14 ‘‘Long-term’’ means any Executed Agreement with a term of two years or longer. 15 ‘‘Purchase and sale agreements’’ include longterm commercial agreements covering ‘‘free on board’’ sales subsequent to a terminal service agreement. amozie on DSK3GDR082PROD with PROPOSALS1 11 See, VerDate Sep<11>2014 18:08 Dec 18, 2018 Jkt 247001 iv. Liquefaction tolling agreements, liquefaction and regasification tolling capacity agreements, and similar types of agreements; and v. Any other natural gas export contractual agreements that are associated with the first sale or transfer of natural gas at the point of export and specify the volume of natural gas under contract.16 Under DOE’s proposed interpretation, Executed Agreements may be associated with the sale, transfer, and/or export of natural gas, including LNG, prior to export.17 For example, for export facilities that operate on a tolling model, if an off-taker that holds initial title to the LNG within the storage tank of an export facility (Party A) enters into an agreement to sell the LNG to another party (Party B) prior to the LNG being loaded onto a ship, both Party A’s and Party B’s contracts would be considered ‘‘relevant’’ for purposes of 10 CFR 590.202(c). B. Proposed Interpretation of 10 CFR 590.407 DOE proposes to interpret the phrase ‘‘as soon as practicable’’ in 10 CFR 590.407 with respect to the continuing obligation of authorization holders and Registrants to provide written notification to DOE/FE of any prospective or actual changes to the information submitted during the application process. Specifically, DOE/ FE will consider a written notification of any Executed Agreement(s) filed within 30 days of its execution to have been submitted ‘‘as soon as practicable’’ under this regulation. DOE/FE believes a 30-day timeframe, absent good cause for delay, will provide a reasonably sufficient time for authorization holders to prepare and file the written notifications with DOE/FE. C. Anticipated Administrative Benefits In this proposed interpretive rule, DOE/FE is not proposing any new requirements for applicants or authorization holders under 10 CFR part 590. Rather, DOE’s intent is to reduce administrative uncertainty and minimize regulatory burdens associated 16 ‘‘Any other natural gas export contractual agreements’’ may include, but are not limited to, heads of agreement, memoranda of understanding, letters of intent, and similar types of agreements if and when they become fully binding and effective in lieu of a definitive agreement. 17 An ‘‘export’’ occurs when the LNG is delivered to the flange of the LNG export vessel. See Freeport LNG Expansion, L.P., et al., DOE/FE Order No. 3282, FE Docket No. 10–161–LNG, Order Conditionally 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, at 10 n.28 (May 17, 2003) (citation omitted). PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 65113 with the application of 10 CFR 590.202(c) and 10 CFR 509.407. IV. Public Comment Procedures Interested persons are invited to participate in this proceeding by submitting data, views, or arguments. Written comments should be submitted to the address, and in the form, indicated in the ADDRESSES section of this proposed rule. To help DOE review the comments, interested persons are asked to refer to specific proposed provisions, if possible. If you submit information that you believe to be exempt by law from public disclosure, you should submit one complete copy, as well as one copy from which the information claimed to be exempt by law from public disclosure has been deleted. DOE is responsible for the final determination with regard to disclosure or nondisclosure of the information and for treating it accordingly under the DOE Freedom of Information regulations at 10 CFR 1004.11. V. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this proposed interpretive rule. Signed in Washington, DC, on December 13, 2018. Steven E. Winberg, Assistant Secretary, Office of Fossil Energy. [FR Doc. 2018–27450 Filed 12–18–18; 8:45 am] BILLING CODE 6450–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA–2018–0787; Airspace Docket No. 18–ASW–12] RIN 2120–AA66 Proposed Establishment of Class E Airspace; Coushatta, LA Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). AGENCY: This action proposes to establish Class E airspace extending upward from 700 feet above the surface at The Red River Airport, Coushatta, LA. Controlled airspace is necessary to accommodate new standard instrument approach procedures developed at The Red River Airport, for the safety and management of instrument flight rules (IFR) operations. SUMMARY: E:\FR\FM\19DEP1.SGM 19DEP1

Agencies

[Federal Register Volume 83, Number 243 (Wednesday, December 19, 2018)]
[Proposed Rules]
[Pages 65111-65113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27450]


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DEPARTMENT OF ENERGY

10 CFR Part 590


Filing of Contracts and Purchase Agreements Associated With the 
Export of Natural Gas

AGENCY: Office of Fossil Energy, Department of Energy.

ACTION: Proposed interpretive rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Energy (DOE or the Department) is proposing 
an interpretive rule to clarify certain DOE regulations governing the 
export of natural gas, including liquefied natural gas (LNG), under the 
Natural Gas Act (NGA). Under DOE's regulations, any person seeking 
authorization to export natural gas from the United States, or to amend 
an existing export authorization, must provide DOE's Office of Fossil 
Energy (DOE/FE) with a copy of ``all relevant contracts and purchase 
agreements.'' DOE is proposing this interpretive rule to clarify the 
types of contracts and purchase agreements associated with the export 
of natural gas that DOE considers to be ``relevant'' for purposes of 
these regulations. DOE's

[[Page 65112]]

regulations also impose a ``continuing obligation'' on authorization 
holders to notify DOE/FE ``as soon as practicable'' of any prospective 
or actual changes to the information submitted during the application 
process upon which the authorization was issued, including ``the terms 
and conditions of any applicable contracts.'' In this proposed 
interpretative rule, DOE is seeking to clarify the phrase ``as soon as 
practicable'' to mean within 30 days of the execution of the contracts.

DATES: Public comment on this proposed interpretive rule will be 
accepted until January 18, 2019.

ADDRESSES: You may submit comments using any of the following methods, 
although email is preferred:
    1. Email: Send email to fergas@hq.doe.gov or regulations.gov. 
Include ``Natural Gas Contract Guidance'' in the subject line of the 
email. Please include the full body of your comments in the text of the 
message or as an attachment.
    2. Regular Mail: U.S. Department of Energy (FE-34), Office of 
Regulation, Analysis, and Engagement, Office of Fossil Energy, P.O. Box 
44375, Washington, DC 20026-4375.
    3. Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, 
etc.): U.S. Department of Energy (FE-34), Office of Regulation, 
Analysis, and Engagement, Office of Fossil Energy, Forrestal Building, 
Room 3E-042, 1000 Independence Avenue SW, Washington, DC 20585. 
Telephone: (202) 586-9478.
    Due to potential delays in the delivery of postal mail, we 
encourage respondents to submit comments electronically to ensure 
timely receipt. PLEASE NOTE: If submitting a filing via email, please 
include all related documents and attachments (e.g., exhibits) in the 
original email correspondence. Please do not include any active 
hyperlinks or password protection in any of the documents or 
attachments related to the filing. All electronic filings submitted to 
DOE must follow these guidelines to ensure that all documents are filed 
in a timely manner. Any hardcopy filing submitted greater in length 
than 50 pages must also include, at the time of the filing, a digital 
copy on disk of the entire submission.
    Docket: This notice of proposed rulemaking and any comments that 
DOE receives will be made available on DOE's website at: https://www.energy.gov/fe/services/natural-gas-regulation.

FOR FURTHER INFORMATION CONTACT: Amy Sweeney, U.S. Department of Energy 
(FE-34), Office of Regulation, Analysis, and Engagement, Office of 
Fossil Energy, Forrestal Building, Room 3E-042, 1000 Independence 
Avenue SW, Washington, DC 20585, (202) 586-2627, Email: 
amy.sweeney@hq.doe.gov; or Cassandra Bernstein or Charles Park, U.S. 
Department of Energy (GC-76), Office of the Assistant General Counsel 
for Electricity and Fossil Energy, Forrestal Building, Room 6D-033, 
1000 Independence Avenue SW, Washington, DC 20585; (202) 586-9793 or 
(202) 287-6531, Email: cassandra.bernstein@hq.doe.gov or 
charles.park@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

I. Statutory Background
II. Regulatory Background
III. Proposed Regulatory Interpretations
IV. Public Comment Procedures
V. Approval of the Office of the Secretary

I. Statutory Background

    The Department of Energy is responsible for authorizing exports of 
natural gas to foreign nations pursuant to section 3 of the NGA, 15 
U.S.C. 717b.\1\ Under section 3(c) of the NGA, exports of natural gas 
to countries with which the United States has entered into a free trade 
agreement (FTA) requiring national treatment for trade in natural gas 
and with which trade is not prohibited by U.S. law or policy (FTA 
countries) are ``deemed to be consistent with the public interest.'' 
Therefore, applications authorizing natural gas and LNG exports to FTA 
countries must be granted ``without modification or delay.'' \2\ 
Section 3(a) of the NGA governs exports to any other country with which 
trade is not prohibited by U.S. law or policy (non-FTA countries). DOE 
has consistently interpreted section 3(a) of the NGA as creating a 
rebuttable presumption that a proposed export of natural gas to non-FTA 
countries is in the public interest.\3\ Accordingly, DOE conducts an 
informal adjudication and grants the application unless DOE finds that 
the proposed exportation will not be consistent with the public 
interest.\4\
---------------------------------------------------------------------------

    \1\ Authority to regulate the imports and exports of natural 
gas, including LNG, under section 3 of the NGA (15 U.S.C. 717b) has 
been delegated to the Assistant Secretary for Fossil Energy in 
Redelegation Order No. 00-006.02, issued on November 17, 2014.
    \2\ 15 U.S.C. 717b(c). The United States currently has FTAs 
requiring national treatment for trade in natural gas with 
Australia, Bahrain, Canada, Chile, Colombia, Dominican Republic, El 
Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, 
Oman, Panama, Peru, Republic of Korea, and Singapore. FTAs with 
Israel and Costa Rica do not require national treatment for trade in 
natural gas.
    \3\ See Sierra Club v. U.S. Dep't of Energy, 867 F.3d 189, 203 
(D.C. Cir. 2017) (``We have construed [NGA section 3(a)] as 
containing a `general presumption favoring [export] authorization.' 
'') (quoting W. Va. Pub. Serv. Comm'n v. U.S. Dep't of Energy, 681 
F.2d 847, 856 (D.C. Cir. 1982)).
    \4\ See id. (``there must be `an affirmative showing of 
inconsistency with the public interest' to deny the application'' 
under NGA section 3(a)) (quoting Panhandle Procedures & Royalty 
Owners Ass'n v. Econ Regulatory Admin., 822 F.2d 1105, 1111 (D.C. 
Cir. 1987)).
---------------------------------------------------------------------------

II. Regulatory Background

    DOE's regulations implementing section 3 of the NGA are codified in 
10 CFR part 590. Under those regulations, ``[a]ny person seeking 
authorization to . . . export natural gas . . . from the United States, 
[seeking] to amend an existing . . . export authorization, or seeking 
any other requested action'' \5\ is required to provide DOE/FE with, 
inter alia, ``a copy of all relevant contracts and purchase 
agreements.'' \6\ DOE's regulations do not specify what types of 
``contracts and purchase agreements'' associated with the export of 
natural gas are considered ``relevant'' for purposes of 10 CFR 
590.202(c).
---------------------------------------------------------------------------

    \5\ 10 CFR 590.201(a).
    \6\ Id. at 590.202(c).
---------------------------------------------------------------------------

    DOE implements this regulatory authority as part of its long-term 
export authorizations for natural gas, including LNG.\7\ For example, 
in the ``Terms and Conditions'' section of DOE/FE's long-term LNG 
export orders, DOE/FE states that authorization holders are required to 
file, or cause to be filed, ``any relevant long-term commercial 
agreements'' pursuant to which the authorization holder or LNG title-
holder (i.e., Registrant) exports LNG ``once those agreements have been 
executed.'' \8\ Similarly, in the ``Order'' section, DOE/FE states that 
the authorization holder shall file, or cause others to file, ``all 
executed long-term contracts'' associated with both the long-term 
export of LNG and the long-term supply of natural gas to the export 
facility.\9\
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    \7\ For purposes of this proposal, the terms ``authorization'' 
and ``order'' are used interchangeably.
    \8\ See, e.g., Eagle LNG Partners Jacksonville II LLC, DOE/FE 
Order No. 4078, FE Docket No. 17-79-LNG, Opinion and Order Granting 
Long-Term, Multi-Contract Authorization to Export Liquefied Natural 
Gas in ISO Containers Loaded at the Eagle Maxville Facility in 
Jacksonville, Florida, and Exported by Vessel to Free Trade 
Agreement and Non-Free Trade Agreement Nations (Sept. 15, 2017), at 
43 (Terms and Conditions Para. H).
    \9\ See id. at 46-47 (Ordering Paras. I(i), (ii)).
---------------------------------------------------------------------------

    DOE regulations also impose a ``continuing obligation'' on 
authorization holders to give DOE/FE ``written notification, as soon as 
practicable, of any prospective or actual changes to the information 
submitted during the application process upon which the authorization 
was based, including, but not limited to, changes . . . to the terms 
and conditions of any

[[Page 65113]]

applicable contracts.'' \10\ DOE regulations do not specify when 
submission of such written notification must be made to constitute ``as 
soon as practicable.'' However, in DOE/FE's long-term export orders, 
DOE/FE expressly ``finds that the submission of all such [long-term 
commercial export] agreements or contracts within 30 days of their 
execution . . . will be consistent with the `to the extent practicable' 
requirement of section 590.202(b).'' \11\ Likewise, DOE/FE imposes a 
30-day time period for an authorization holder to notify DOE/FE of a 
change in the company name, the term of any long-term contracts, and 
other relevant modifications.\12\
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    \10\ 10 CFR 590.407.
    \11\ See, e.g., Eagle LNG Partners Jacksonville II LLC, DOE/FE 
Order No. 4078, at 43 (Terms and Conditions Para. H); see also id. 
at 46-47 (Ordering Paras. I(i), (ii), K, Q) (imposing 30-day 
reporting periods).
    \12\ See id. at 48 (Ordering Para. L).
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III. Proposed Regulatory Interpretations

    DOE proposes the following clarifications to provide specificity, 
and thereby to reduce potential confusion and regulatory burdens, 
concerning DOE/FE's practice under the aforementioned regulations. As 
set forth above, these proposed clarifications are consistent with DOE/
FE's practice under its long-term export authorizations, and thus are 
intended to provide additional guidance for authorization holders in 
complying with existing and/or future orders.

A. Proposed Interpretation of 10 CFR 590.202(c)

    DOE proposes to clarify the types of ``contracts and purchase 
agreements'' associated with the export of natural gas that are 
``relevant'' for purposes of 10 CFR 590.202(c). DOE proposes to 
interpret the term ``relevant contracts and purchase agreements'' to 
include the following types of executed,\13\ long-term \14\ binding 
commercial agreements associated with the export of natural gas 
(collectively, Executed Agreements):
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    \13\ ``Executed'' means that all parties to a long-term 
commercial agreement have signed the agreement, regardless of 
whether conditions precedent have been met, and that such an 
agreement is binding upon all parties to the transaction.
    \14\ ``Long-term'' means any Executed Agreement with a term of 
two years or longer.

    i. Natural gas supply agreements;
    ii. Terminal service agreements;
    iii. Purchase and sale agreements; \15\
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    \15\ ``Purchase and sale agreements'' include long-term 
commercial agreements covering ``free on board'' sales subsequent to 
a terminal service agreement.
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    iv. Liquefaction tolling agreements, liquefaction and 
regasification tolling capacity agreements, and similar types of 
agreements; and
    v. Any other natural gas export contractual agreements that are 
associated with the first sale or transfer of natural gas at the 
point of export and specify the volume of natural gas under 
contract.\16\
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    \16\ ``Any other natural gas export contractual agreements'' may 
include, but are not limited to, heads of agreement, memoranda of 
understanding, letters of intent, and similar types of agreements if 
and when they become fully binding and effective in lieu of a 
definitive agreement.

    Under DOE's proposed interpretation, Executed Agreements may be 
associated with the sale, transfer, and/or export of natural gas, 
including LNG, prior to export.\17\ For example, for export facilities 
that operate on a tolling model, if an off-taker that holds initial 
title to the LNG within the storage tank of an export facility (Party 
A) enters into an agreement to sell the LNG to another party (Party B) 
prior to the LNG being loaded onto a ship, both Party A's and Party B's 
contracts would be considered ``relevant'' for purposes of 10 CFR 
590.202(c).
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    \17\ An ``export'' occurs when the LNG is delivered to the 
flange of the LNG export vessel. See Freeport LNG Expansion, L.P., 
et al., DOE/FE Order No. 3282, FE Docket No. 10-161-LNG, Order 
Conditionally 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, at 10 n.28 (May 17, 2003) (citation omitted).
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B. Proposed Interpretation of 10 CFR 590.407

    DOE proposes to interpret the phrase ``as soon as practicable'' in 
10 CFR 590.407 with respect to the continuing obligation of 
authorization holders and Registrants to provide written notification 
to DOE/FE of any prospective or actual changes to the information 
submitted during the application process. Specifically, DOE/FE will 
consider a written notification of any Executed Agreement(s) filed 
within 30 days of its execution to have been submitted ``as soon as 
practicable'' under this regulation. DOE/FE believes a 30-day 
timeframe, absent good cause for delay, will provide a reasonably 
sufficient time for authorization holders to prepare and file the 
written notifications with DOE/FE.

C. Anticipated Administrative Benefits

    In this proposed interpretive rule, DOE/FE is not proposing any new 
requirements for applicants or authorization holders under 10 CFR part 
590. Rather, DOE's intent is to reduce administrative uncertainty and 
minimize regulatory burdens associated with the application of 10 CFR 
590.202(c) and 10 CFR 509.407.

IV. Public Comment Procedures

    Interested persons are invited to participate in this proceeding by 
submitting data, views, or arguments. Written comments should be 
submitted to the address, and in the form, indicated in the ADDRESSES 
section of this proposed rule. To help DOE review the comments, 
interested persons are asked to refer to specific proposed provisions, 
if possible.
    If you submit information that you believe to be exempt by law from 
public disclosure, you should submit one complete copy, as well as one 
copy from which the information claimed to be exempt by law from public 
disclosure has been deleted. DOE is responsible for the final 
determination with regard to disclosure or nondisclosure of the 
information and for treating it accordingly under the DOE Freedom of 
Information regulations at 10 CFR 1004.11.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this proposed 
interpretive rule.

    Signed in Washington, DC, on December 13, 2018.
Steven E. Winberg,
Assistant Secretary, Office of Fossil Energy.
[FR Doc. 2018-27450 Filed 12-18-18; 8:45 am]
BILLING CODE 6450-01-P