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Senate Energy Leader-Elect Cautious on LNG Exports

Sen. Ron Wyden (D-OR), the incoming chairman of the Senate Energy and Natural Resources Committee, believes the nation should take a careful approach to exporting liquefied natural gas (LNG), and endorses sharing federal revenues to develop offshore oil and natural gas with coastal states.

"I think we ought to look before we leap" with respect to approving LNG exports, Wyden said during a recent interview with the televised Platts Energy Week. This is a "[dramatic] set of changes we've seen in our county. It wasn't very long ago that we were having big battles over the question of constructing import facilities. Now virtually overnight we're talking about changing that; we're talking about exporting."

Congress is "in the dark" on the issue of LNG exports, "so I have asked the administration [namely Energy Secretary Steven Chu] to outline the factors that he intends to use in making decisions with respect to natural gas exports. When I get the info, we'll go from there," Wyden said (see NGI, Oct. 29). He noted that he did not want approval of LNG exports to push up prices in the United States.

"I believe in a smart trade policy, especially with respect to energy," Wyden said.

He made clear that he is bullish on natural gas. "First of all, I'm a jobs guy," and if the correct decisions are made, natural gas "could be absolutely key to growing jobs" in the nation.

Wyden stopped short of saying he supports opening the East and West Coasts to drilling, proposals which are currently blocked by the Obama administration, but he indicated that the committee would look at expanding offshore drilling into new areas that the administration has already approved.

He believes the Senate energy panel under his leadership may have a solution to end the debate over allowing coastal states to share some of the revenues the federal government gets from offshore oil and gas development. In the committee over the past couple of years, "there's been a pretty stark division on this revenue-sharing issue. I think there's a chance to develop a third path in between those who want no revenue sharing and those who want more revenue sharing."

The third path would involve the stitching together of a new national coalition of "resource-dependent communities...that have federal land that adjoin federal waters, and [that are] interested in policies that promote job creation, and help to protect their land, air and water," he said.

"Certainly there is a sense of there's more to come," said Wyden when asked about BP plc's recent settlement with the federal government. The producer earlier this month agreed to pay more than $4.5 billion in fines to settle criminal claims related to the Macondo well blowout in April 2010, which destroyed the Deepwater Horizon platform and killed 11 men (see NGI, Nov. 19).

There's a "fair amount of evidence" that had the Minerals Management Service, the forerunner of the Bureau of Ocean Energy Management, "done its job, this may have been...prevented," Wyden said.

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