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Senate Committee Passes Two Energy Bills, Including End to Crude Oil Export Ban

Although two comprehensive energy bills passed the muster of the Senate Energy and Natural Resources Committee on Thursday, the more controversial one -- which would lift the ban on U.S. crude oil exports, among other things -- only cleared the hurdle along party lines, and both bills face amendments and uncertain futures in the Senate.

The committee passed the more controversial bill -- officially, the Offshore Production and Energizing National Security (OPENS) Act of 2015 -- on a 12-10 vote. A spokesman for the committee told NGI on Friday that at one point it looked as if Sen. Joe Manchin (D-WV) might surprise everyone by breaking party ranks and voting for the bill, but he ultimately sided with his fellow Democrats.

Under the OPENS Act, "any domestic crude oil or condensate (other than crude oil stored in the Strategic Petroleum Reserve) may be exported without a federal license to countries not subject to sanctions by the United States." Lifting the ban has been a long-term goal of the committee's chairman, Sen. Lisa Murkowski (R-AK).

The OPENS Act also calls for, among other things, the secretary of the Department of the Interior (DOI) to make available for leasing any unleased acreage within the Outer Continental Shelf (OCS) planning area in the Gulf of Mexico (GOM) "considered to have the largest undiscovered, technically recoverable oil and gas resources." The DOI secretary would also be required to include any state's subdivision of an OCS planning area in the GOM if that state's governor requested that it be made available for leasing.

OCS planning areas in the GOM estimated to contain more than 2.5 billion bbl of oil or 7.5 Tcf of natural gas would also be made available for leasing. The bill also calls for the DOI secretary to implement the proposed 2017-2022 OCS Oil & Gas Leasing Program, with Lease Sale Nos. 300-302 in the eastern GOM to take place during fiscal years 2018-2020, respectively.

In the Alaskan OCS, the OPENS Act calls for the DOI secretary to establish a "Nearshore Beaufort Sea Planning Area," which would include that portion of the Beaufort Planning Area located within three nautical miles of the seaward boundary of Alaska. Lease sales would be conducted in this new area, plus the Cook Inlet Planning Area, during fiscal years 2018-2020.

The South Atlantic Planning area, which includes the offshore in Georgia, North Carolina, South Carolina and Virginia, would also be open to leasing -- one sale during fiscal 2021, followed by two lease sales in fiscal 2022.

Randall Luthi, president of the National Ocean Industries Association (NOIA), said the OPENS Act would "strengthen America's energy and national security, improve our national economy, and benefit consumers across the country.

"Over 85% of our federal offshore acreage is off limits to oil and natural gas development.  Opening access to these areas will result in hundreds of thousands of new American jobs, billions of dollars in new private investment and millions more barrels per day of oil and natural gas production, not to mention new revenue to the government."

In a statement, Murkowski said the OPENS Act would "ensure that the State of Alaska and coastal communities supporting development will receive a substantial share of the revenues from production to compensate for impacts from development."

Meanwhile, the less controversial bill, the Energy Policy Modernization Act of 2015, passed the committee by a vote of 18-4 (see Daily GPIJuly 23). It calls for the secretary of the Department of Energy (DOE) to issue a final decision on any application to export liquefied natural gas (LNG) to non-FTA countries within 45 days of the Federal Energy Regulatory Commission or the Maritime Administration concluding their review under the National Environmental Policy Act.

The bill would also give the U.S. Court of Appeals for the District of Columbia Circuit, or the circuit in which an LNG facility would be located, original and exclusive jurisdiction over any civil action brought by an LNG export applicant if the DOE secretary doesn't meet the deadline.

Other provisions would require public disclosure of LNG export destinations, and for the Energy Information Administration to collaborate with their counterparts in Canada and Mexico on improving the collection of cross-border energy data, and make periodic reports to Congress.

Marty Durbin, CEO of America's Natural Gas Alliance, said the Energy Policy Modernization Act will "provide greater certainty for natural gas infrastructure permitting and for LNG export approvals will better allow our nation to take advantage of the many opportunities associated with our abundant natural gas resource."

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