Jun 29, 2017

Trump touts natural gas exports Obama approved

President Trump won't admit it, but he's taking credit for something President Obama did. In a speech at the Energy Department Thursday, Trump is expected to tout America's oil and natural gas boom, and in particular how his administration is green lighting exports of liquified natural gas (LNG), which has been a presidential talking point for the last few months.

But it was actually the Obama administration that approved nearly all of the LNG poised to be exported, and Trump is so far just reiterating what his predecessor did.

Why it matters: The Trump administration has displayed a lot of positive rhetoric about LNG exports, but so far it hasn't made any explicit policy changes to how the federal government reviews applications for LNG. An Energy Department spokeswoman declined on Wednesday to say whether Trump will make any related policy announcements in his speech Thursday.

How it works: Under current law, countries that do have free-trade agreements with the U.S. get a near automatic approval from the federal government to receive U.S. LNG. Applications seeking to export to countries that aren't free-trade partners with the U.S. must go through a two-step review process to show such exports are in the U.S. national interest. The Energy Department has approved additional LNG export applications under Trump, continuing what Obama did.

What's already done: Under Obama, the Energy Department rejiggered the way federal reviews are done to speed up — not slow down — the whole process, to the chagrin of some environmental groups. In 2014, the Energy Department cut down the process, which also involves the Federal Energy Regulatory Commission, from three steps to two.

What more could be done: Rhetoric encouraging countries, like China, to import LNG from the U.S. has been the main thing Trump is doing so far. To really change things, Trump could do one of the following things:

  1. Push Congress to change the 1938 law governing exports of LNG, which is unlikely given lawmakers' unwillingness to change most long-standing laws.
  2. Further condense the federal review process.
  3. Strike more free-trade deals, which seems unlikely given his positions on current trade deals.

To be sure: Obama took credit for things his predecessor did too. In 2011, he was touting increased offshore oil and natural gas production, even though a top official in his administration at the time said such increases were due to policies his predecessor, George W. Bush, put in place that increased access to federal waters.

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