H.R. 1949 would transfer the authority to approve the export and import of natural gas from the Department of Energy (DOE) to the Federal Energy Regulatory Commission (FERC). Under current law, FERC reviews applications to construct facilities that import or export natural gas.

The bill also would deem all applications to export or import natural gas to be consistent with public interest. Under current law, DOE generally approves such authorizations unless it determines that the proposed activities are not consistent with public interest.

CBO expects that implementing H.R. 1949 would affect FERC’s workload for processing applications to export or import natural gas. Any change in FERC’s costs (which are controlled through annual appropriation acts) would be offset by fees that the commission charges. Accordingly, CBO estimates that implementing those provisions would result in a negligible net change in discretionary spending.

Using information from DOE and the natural gas industry, CBO expects that enacting H.R 1949 would cause certain facilities to begin operations sooner than under current law because the bill would shorten the review period for certain applications to export or import natural gas. CBO further expects that the faster operation of those facilities also could accelerate production of natural gas on federal lands by a small amount (less than 5 percent) in 2034 and 2035. The estimated effects on production incorporates CBO’s estimate of the time required to build new facilities and accounts for the fact that several facilities have been approved under current law and are not yet operational.

Based on CBO’s projected gas production and prices for those years, CBO estimates that offsetting receipts from royalties (which are recorded as a reduction in direct spending) would increase by about $75 million over the 2025-2035 period, net of payments to states where the natural gas production would occur.

The costs of the legislation, detailed in Table 1, fall within budget function 300 (natural resources and environment).

If FERC increases their fees to offset the costs of implementing the bill, H.R. 1949 would increase the cost of an existing mandate on public and private entities, such as electric utilities, that are required to pay those fees. CBO estimates that the incremental cost of the mandates would be small and fall well below the thresholds established in Unfunded Mandates Reform Act for intergovernmental and private-sector mandates ($103 million and $206 million in 2025, respectively, adjusted annually for inflation).

The CBO staff contacts for this estimate are Aaron Krupkin (for the Federal Energy Regulatory Commission), Lilia Ledezma (for onshore gas), and Brandon Lever (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.