This new interest in exporting natural gas has also produced renewed interest in the laws and regulations governing the export of other fossil fuels, including crude oil and coal. The regulations further provide that BIS will issue licenses for certain crude oil exports that fall under one of the listed exemptions, including (i) exports from Alaska's Cook Inlet; (ii) exports to Canada for consumption or use therein; (iii) exports in connection with refining or exchange of strategic petroleum reserve oil; (iv) exports of heavy California crude oil up to an average volume not to exceed 25,000 barrels per day; (v) exports that are consistent with certain international agreements; (vi) exports that are consistent with findings made by the President under certain statutes; and (vii) exports of foreign origin crude oil where, based on satisfactory written documentation, the exporter can demonstrate that the oil is not of U.S. origin and has not been commingled with oil of U.S. origin. These exports do not require a license from BIS. However, in 1977 the Federal Power Commission was dissolved and its responsibilities were transferred to the Department of Energy (DOE) as well as the Federal Energy Regulatory Commission (FERC), an independent agency operating within DOE, pursuant to the Department of Energy Organization Act. Natural gas exporting responsibilities are handled by the Office of Fossil Energy within DOE. Export Facility Authorization

The previous section of this report discusses federal authorization of the export of natural resources, not the construction and operation of export facilities. If an oil pipeline crosses the border with Canada or Mexico, the border crossing facility must be authorized by the federal government. Thus, it seems unlikely that licensing procedures could constitute a subsidy under WTO rules, even if they lead to restrictions on exports. Articles XX and XIII—General Exceptions

Article XX of the GATT provides for certain exceptions that a member country may invoke if it is found to be in violation of any GATT obligations. While there is currently no WTO case law on the use of Article XXI of the GATT 1994, some scholars have speculated that, in the future, a WTO panel or the Appellate Body may decline to defer to a WTO member's judgment that its use of Article XXI is appropriate and, instead, may subject a member's use of the exception to scrutiny. The bills would amend Section 3 of the NGA to provide that expedited approval of LNG exports would be granted to four different categories of foreign countries: (1) nations for which there is in effect a free trade agreement (FTA) requiring national treatment for trade in natural gas; (2) a member country of the North Atlantic Treaty Organization (NATO); (3) Japan, so long as the Treaty of Mutual Cooperation and Security of January 19, 1960, between Japan and the United States remains in effect; and (4) "any other foreign country if the Secretary of State, in consultation with the Secretary of Defense, determines that exportation of natural gas to that foreign country would promote the national security interests of the United States." Under international trade rules, restrictions on exports of fossil fuels could potentially be difficult to reconcile with Articles I and XI of the GATT 1994. Article XXI, the exception for essential security interests, may be cited in order to justify potential violations of GATT Articles I and XI. The United States has traditionally considered this exception to be self-judging. However, it is possible that a panel or the Appellate Body might scrutinize the United States' use of the exception. However, Article XIII potentially requires that if an otherwise GATT inconsistent measure is permitted to remain in force due to an Article XX exception, the measure must be administered in a nondiscriminatory manner. Export restrictions that treat WTO members differently would appear not to satisfy the potential nondiscriminatory requirements of Article XIII.
Recent technological developments have led to an increase in domestic production of natural gas and crude oil. As a result, there is interest among some parties in exporting liquefied natural gas (LNG) and crude oil to take advantage of international markets. This has placed new attention on the laws and regulations governing, and in many cases restricting, the export of fossil fuels.
In most cases, export of fossil fuels requires federal authorization of both the act of exporting the fuel and the facility that will be employed to export the fuel. For example, the export of natural gas is permitted by the Department of Energy's Office of Fossil Energy, while the construction and operation of the export facility must be authorized by the Federal Energy Regulatory Commission (FERC). Oil exports are restricted, but an export that falls under one of several exemptions can be authorized by the Department of Commerce's Bureau of Industry and Security. Oil pipelines that cross international borders must be permitted by the State Department. Coal exports do not require special authorization specific to the commodity; however, as with natural gas and crude oil, other generally applicable federal statutes and regulations may apply to the export of coal.
Restrictions on exports of fossil fuels could potentially have implications under international trade rules. They may possibly be inconsistent with the most favored nation requirement of Article I of the General Agreement on Tariffs and Trade 1994 (GATT 1994) if certain World Trade Organization (WTO) members are treated differently than others. Limits on exports could also potentially violate the prohibition on export restrictions contained in Article XI of the GATT 1994 if they prescribe vague and unspecified criteria for export licensing. However, an export licensing regime does not appear to constitute a "subsidy" to downstream users of fossil fuels under WTO rules.
Article XXI, the exception for essential security interests, may provide justification for potential violations of GATT Articles I and XI. The United States has traditionally considered this exception to be self-judging. However, it is possible that a panel or the Appellate Body might scrutinize the United States' use of the exception.
Article XX of the GATT provides additional exceptions that a member country may invoke if it is found to be in violation of any GATT obligations. For example, WTO members may maintain an otherwise GATT inconsistent measure if it is necessary to protect an exhaustible natural resource or necessary to protect human health or the environment. Article XIII potentially requires that if an otherwise GATT inconsistent measure is permitted to remain in force due to an Article XX exception, the measure must be administered in a nondiscriminatory manner. Export restrictions that treat WTO members differently would appear not to satisfy the potential nondiscriminatory requirements of Article XIII.