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DOT Adopts Policy for Licensing Deepwater Ports for Oil and Gas Exports

Thursday, May 07, 2015
Sandler, Travis & Rosenberg Trade Report

The Department of Transportation’s Maritime Administration has adopted a new policy establishing an administrative process to accept, evaluate and process license applications for the construction and operation of offshore deepwater port facilities that propose to export oil or natural gas. This policy is consistent with the existing policy for the review of import applications. MARAD notes that a deepwater port license does not, by itself, convey an authorization to export crude oil or natural gas, which generally must be obtained from the Department of Commerce or Department of Energy, respectively.

Under the new policy, any proposed deepwater port involving the export of oil or natural gas from domestic sources within the U.S. (including refined products) will require the submission of an export-specific comprehensive license application conforming to all established and applicable deepwater port licensing requirements and regulations.

MARAD states that the considerable technical, operational and environmental differences between import and export operations for oil or natural gas projects are such that any licensed deepwater port facility operator, or any proponent of a deepwater port that has an application in process, that proposes to convert from import to export operations must submit a new license application (including application fee) and conform to all licensing requirements and regulations in effect at such time of application. For licensed deepwater ports, an application to convert from import operations to export operations will require the following at a minimum: (1) approval from the Department of Energy or other approval authority to export oil or natural gas to free trade and/or non-free trade agreement countries, (2) a new or supplemental environmental impact statement or environmental assessment that assesses the environmental impacts of the proposed change in operations, and (3) a revised operations manual that fully describes the proposed change in port operations. For deepwater ports that already have a license to import oil or natural gas, if the application to convert to export operations is approved, the licensee must surrender the existing license and MARAD will issue a new license with conditions appropriate to all intended activities.

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