SB1035 would prohibit exporting natural gas produced or refined in the United States to any foreign country if the gas is intended to be re-exported through a foreign LNG terminal.
The prohibition is enacted 'notwithstanding any other provision of law,' giving it sweeping reach. The bill grounds the measure in findings about corruption and national security concerns in Mexico, arguing that such exports are not in the United States' interests.If enacted, the statute would require exporters to rethink supply chains and could affect energy trade with international partners, potentially altering how gas is routed and sold internationally.
At a Glance
What It Does
The bill bars exports of gas produced or refined in the United States to a foreign country if the gas is intended to be re-exported through a foreign LNG terminal (per NGA definition). It applies notwithstanding other laws, creating a broad export-control baseline for this scenario.
Who It Affects
US natural gas producers and exporters, LNG terminals, traders and brokers engaged in international gas sales, and foreign buyers relying on US-sourced gas.
Why It Matters
It signals a strategic shift to constrain gas exports tied to perceived governance and national-security risks, with potential spillovers for domestic prices, US-MEX trade relations, and international energy markets.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
SB1035 targets a narrow slice of the gas export landscape: it prohibits exporting natural gas produced or refined in the United States to any foreign country if the intent is to forward that gas to a foreign LNG terminal. This creates a formal barrier for deals that would route gas from US production to foreign export infrastructures, even if an export license exists under current rules.
The prohibition sits in Section 2 and is expressly stated to prevail over other laws, meaning it overrides conflicting statutory regimes as introduced.
The bill’s findings (Section 1) frame the policy choice as a national-security and anti-corruption measure. The text cites concerns about corruption in Mexico, regulatory autonomy and antitrust vulnerabilities, and other governance issues, arguing that exporting energy to or through jurisdictions with these vulnerabilities threatens US interests.
It also highlights Pemex-related corruption concerns and governance reforms that could affect trade disputes and enforcement of trade standards under agreements with the US, Mexico, and Canada.Practically, the prohibition would require exporters, shippers, and LNG terminals to assess whether a contemplated sale would involve gas that will be exported through a foreign LNG terminal, and to avoid structuring transactions to circumvent the ban. The text does not specify penalties or enforcement mechanisms, so initial expectations would focus on regulatory interpretation, license reviews, and compliance programs rather than penalties.
The policy leans on broad export-control logic, raising questions about how it interacts with existing export regimes and international commitments.
The Five Things You Need to Know
The bill imposes a blanket prohibition on exporting US-produced natural gas to any foreign country if the gas is intended for re-export through a foreign LNG terminal.
The prohibition is stated to take effect notwithstanding any other provision of law, giving it sweeping supervisory power over export activity.
Foundations for the ban are anchored in findings about national security and corruption concerns related to Mexico.
The bill cross-references the Natural Gas Act framework when defining what constitutes a foreign LNG terminal.
There are no explicit penalties or enforcement mechanisms spelled out in the text as introduced.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Findings supporting the policy
Section 1 compiles a series of findings that frame the policy response. It argues that exporting US-produced natural gas to markets with governance and regulatory concerns presents national security and economic risks. The findings draw on perceptions of corruption in Mexico, concerns about regulatory autonomy, and reported issues in energy sectors that could affect fair enforcement and trade disputes under US-Mexico-Canada Agreement dynamics. The section emphasizes the potential impact of governance reforms and anti-competitive practices on energy markets and security.
Prohibition on exports of natural gas
Section 2 Establishes a blanket prohibition: no person shall export any natural gas produced or refined in the United States to a foreign country with the intent of further exporting that gas through a foreign LNG terminal. The prohibition is cast as applicable notwithstanding any other provision of law, and it references the LNG-terminal definition as used in the Natural Gas Act. The text does not specify penalties, leaving questions about enforcement pathways to regulators and potential future amendments.
This bill is one of many.
Codify tracks hundreds of bills on Energy across all five countries.
Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- U.S. national security policymakers and agencies (e.g., energy and foreign policy offices) gain a tool to limit exports linked to perceived compliance and governance risks.
- Domestic energy consumers and energy-intensive industries could benefit from more predictable or stabilized domestic gas supply dynamics if exports are constrained.
- Regulators and compliance professionals gain a clearer framework for screening export transactions and enforcing the prohibition.
- U.S. policymakers prioritizing energy independence and sanctions-style export controls gain statutory backing for a restrictive export posture.
Who Bears the Cost
- U.S. LNG exporters and traders lose access to certain international sale opportunities tied to re-export routes through foreign terminals.
- LNG terminals and associated infrastructure that depended on export volumes may experience reduced demand, implicating capital planning and revenue projections.
- Foreign buyers and partner economies reliant on U.S. gas exports could face supply volatility or price shifts due to constrained access to US-produced gas.
- Some US producers and brokers may incur higher compliance costs in screening and structuring transactions to meet the prohibition.
Key Issues
The Core Tension
The central dilemma is whether restricting exports to address governance and security concerns justifies potential disruptions to energy markets, domestic prices, and long-standing international trade relationships.
The bill’s core tension lies in balancing national security and governance concerns with the economic implications of restricting energy exports. The findings lean into perceived risks in partner markets, while the prohibition creates a direct constraint on a large, liquid export commodity.
Without defined penalties or a detailed enforcement regime in the text, practical implementation will hinge on how agencies interpret the measure, resolve ambiguities about intent in complex trade arrangements, and align with existing international commitments. The result could be a delicate policy balance: strengthening security and governance safeguards while potentially constraining trade flexibility, supplier diversification, and price formation in domestic and international gas markets.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.