The Department of Energy in Washington has announced an order that removes barriers for the use of liquefied natural gas (LNG) as marine fuel to power vessels. The order issued by DOE modifies a prior order issued to JAX LNG under the previous administration that asserted new oversight for the use of LNG to power marine vessels, also known as LNG bunkering.
“Today’s action is a significant step in reducing regulatory burdens and helping this important segment of the LNG market continue to grow,” said Tala Goudarzi, Principal Deputy Assistant Secretary of the Office of Fossil Energy and Carbon Management.
JAX LNG is a small-scale coastal LNG facility located at Dames Point near Jacksonville, Florida that dispenses LNG as fuel to ships, including cruise ships, car carriers, petroleum tankers, and container ships.
By issuing an Order on Rehearing, DOE is modifying an order originally issued in December 2024. The modified order clarifies that DOE is withdrawing the exercise of its jurisdiction under the Natural Gas Act (NGA) for ship-to-ship transfers of LNG for marine fuel use at a U.S. port, in U.S. waters, or in international waters. The only bunkering-related activity that will continue to be considered an export is when there are ship-to-ship transfers of U.S. LNG when the receiving ship is located in the territorial sea of a foreign country, including foreign ports. DOE has left unchanged its authorization to JAX to export LNG via ISO container.
The use of LNG for marine fuel has increased in recent years and is expected to continue to increase amid more stringent emissions regulations for shipping. According to the IEA’s January 2025 Quarterly Gas Report, based on the current order book for vessels, the number of LNG-fueled ships is expected to almost double and reach over 1,200 vessels by 2028.
(Photo from Jacksonville Port Authority)