Congress has teed up liquefied natural gas exports as its next big energy debate in a legislature that looks poised to tackle a number of energy and environment issues over the next two years.
The Senate is debating a Department of Homeland Security funding bill that could take a while, if the three weeks it took to pass the Keystone XL pipeline legislation is any indication. The chamber’s open amendment process revealed a pent-up desire to address energy issues, which had not been the focus of a substantive floor debate since 2007.
Legislation to speed exports of liquefied natural gas has been waiting since last Congress, which has shown bipartisan support for an expansion.
The House has passed legislation putting a deadline on Energy Department reviews of exports to nations that lack a free-trade agreement with the United States. The bill would require a decision within 30 days after the completion of a federal environmental review for siting, building and operating projects such as export terminals.
The House bill, which passed 277-133, drew a quarter of House Democrats. Senate support also comes from both sides of the aisle.
The potential geopolitical benefits, namely helping to break Russian President Vladimir Putin’s European energy chokehold by freeing up more global supplies, helped the subject pick up steam with Democrats. The United States, the world’s top natural gas producer, also has a glut of the fuel. That’s why New Mexico Democratic Sens. Martin Heinrich and Tom Udall are co-sponsoring a bill from Sen. John Barrasso, R-Wyo. Sending more natural gas overseas, they say, would allow prices to rise a bit and encourage new drilling.
The Energy Department has said it could comply with the Barrasso bill, which would cap reviews at 45 days.
“We believe this is a solution we will be able to comply with,” Christopher Smith, assistant secretary for fossil energy at the Energy Department, said at a recent Senate Energy and Natural Resources Committee hearing. Under law, exports to non-free trade nations face greater federal scrutiny to determine whether those deals are in the public interest.
That cut against what the White House had said. It told the Washington Examiner that it doesn’t “believe additional legislation is necessary.”
The Energy Department has approved five export applicants, totaling 5.38 billion cubic feet per day. It also has given “conditional” approval to another 4.82 bcfd. The agency ended conditional approvals last year, which industry groups said has improved the processing of more shovel-ready proposals because the agency no longer evaluates applications on a first-come, first-serve basis.
Barrasso and Sen. John Hoeven, R-N.D., have been working with Energy Secretary Ernest Moniz on the legislation. That, combined with Smith’s comments, led Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski to comment that there’s an apparent disconnect between the agency and the White House.
“I think the White House anymore is just, ‘anything that comes out of the Senate, we must veto.’ They’re not even looking at it. So I think that the White House should probably check in with the folks that are doing the work on the ground,” the Alaska Republican told reporters.
But export opponents in Congress have urged caution. If a bill gets to the floor, Democrats wary of exports might seek to limit the amount the Energy Department can allow.
Detractors have warned that exporting too much natural gas could cause prices to spike, potentially undercutting a competitive advantage for U.S. manufacturers. Some have pushed to limit the amount of exports to a certain percentage of daily U.S. natural gas production. Many of those proposals have hovered around 10 percent of daily output.
“I just think this moment will be looked back at as a time where Americans will say, ‘What were you thinking?’ when we have what I call America’s second chance at manufacturing. But we’re going to give it away,” Sen. Angus King, I-Maine, said at the Senate Energy and Natural Resources hearing.
Export backers say time is of the essence.
Supporters point out that the U.S. is just one of many players coming online to satisfy the global natural gas market, so exports would be restrained even without a regulatory ceiling. Marty Durbin, chief executive of America’s Natural Gas Alliance, said the world market probably could handle exports worth 9 percent of U.S. daily production.
Despite saying it didn’t think legislation was needed, the White House has sounded conciliatory on the concept of expanding natural gas exports. It has named the potential benefits to European allies in light of Russia’s incursions into Ukraine.
Congressional proponents have pointed to those same geopolitical gains. They also have pointed to analyses, including one commissioned by the U.S. Energy Information Administration, that exports would help the economy, though it would raise domestic prices marginally.
Hoeven, a co-sponsor of the Senate bill, said he envisioned the legislation would go to the floor as a standalone measure.
Murkowski, who has said she wants to work on a comprehensive energy bill this year, didn’t commit to bring up the bill by itself. But she didn’t rule it out, either.
“Anything is possible,” she said.
