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Senate Committee Takes Up LNG Permitting Bill

The Senate Energy and Natural Resources Committee on Thursday held its first hearing on a bill that would require the Department of Energy to make decisions on liquefied natural gas (LNG) export applications within 45 days after environmental review documents are published, and the debate was strikingly similar to one held in the House prior to passage of a nearly identical bill a day earlier (see Daily GPI, Jan. 28).

The Senate version of the LNG Permitting Certainty and Transparency Act (S 33), introduced earlier this month by Sens. John Barrasso (R-WV) and Martin Heinrich (D-NM), would allow 15 more days for LNG export application decisions than the companion bill (HR 351) approved by the House Wednesday (see Daily GPI, Jan. 7). It would also provide for expedited judicial review of legal challenges to LNG export projects. Both versions would require LNG exporters to disclose the countries where gas is to be exported.

The bill, Barrasso said, is a bipartisan compromise, co-sponsored by five Democrats and a total of seven Republicans.

"Study after study has shown that LNG exports will create good-paying jobs all across America," Barrasso said Thursday. "Good-paying jobs in states like Oregon, West Virginia, Colorado, New Mexico, and Wyoming. LNG exports will also reduce our nation's trade deficit which currently stands at $39 billion. They will even help President Obama fulfill his goal of doubling our nation’s exports,which he set five years ago this week."

But, as had happened in the House, Senators opposed to the legislation disputed its job-creating capability and argued that it would inevitably raise natural gas costs for American consumers.

"I have been to factories and looked in the eyes of people who have lost their jobs to Asia, to other parts of the world -- to Mexico -- and they looked at me and said 'how did you let them ship my jobs away?' We have no advantage on wages, we have no advantage on labor protections, we have no advantage on environmental protection; we have today an advantage on energy costs," said Sen. Angus King (D-ME). "I cannot understand this discussion that will inevitably lead to higher energy costs."

King suggested amending the bill to limit exports to 9% of domestic gas production.

Committee Chairman Lisa Murkowski (R-AK) said she fully supports the bill. Her state has been providing LNG to Japanese markets since 1969 from a terminal on the Kenai Peninsula. The proposed Alaska LNG project, which would export to countries with which the United States has free trade agreements, would continue to be eligible for conditional authorizations from DOE, according to DOE Assistant Secretary for Fossil Energy Christopher Smith.

"We have held the right to do conditional authorization for projects coming out of Alaska. This bill doesn't change that," Smith told the committee. "We can do conditional authorizations for both (Alaska) projects. As we read the law as currently written, it doesn't make any distinction between the Lower 48 and Alaska in terms of the time limit imposed on DOE."

DOE last year authorized the Alaska LNG project to export to FTA countries, but the project awaits a non-FTA license (see Daily GPINov. 21, 2014Nov. 19, 2014).

The 45-day decision limit is “workable” for DOE, Smith said.

In testimony before the committee, representatives of the America's Natural Gas Alliance and National Association of Manufacturers said they support the legislation. The U.S. Chamber of Commerce and American Petroleum Institute also have voiced their support for the bill.

Paul Cicio, president of Industrial Energy Consumers of America, said his organization opposes S 33. By requiring a 45-day decision deadline, the bill "short circuits the thoughtful intent of the NGA [Natural Gas Act] and the public interest determination, which could in turn negatively impact 72 million natural gas consumers and 145 million users of electricity, and the price they will pay for heating and cooling in the future," Cicio told the committee. 

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