House Republicans and Democrats sparred at a Tuesday hearing over the potential domestic and international impacts of expanding liquefied natural gas (LNG) exports by making it easier to ship the fuel to the 159 countries in the World Trade Organization (WTO).
Republicans on the House Energy and Commerce Committee’s subcommittee on energy and power insisted that American natural gas would help allies in Eastern Europe who largely depend on Russia for their energy. It would also benefit the U.S. economy and employment by increasing the demand for natural gas, while not increasing domestic prices.
Democrats on the panel said there would be little immediate international impact, and once the export terminals are built, there’s little change the natural gas would go to Eastern Europe. Meanwhile, natural gas prices would increase domestically.
“Not only would it be beneficial to our allies in Europe who find themselves dependent on expensive natural gas from Russia, it would also be beneficial for our own economy, because of the low cost of natural gas, the expansion of infrastructure for bringing the gas to market, it’s going to create a lot of jobs,” Rep. Ed Whitfield (R-Ky.), the subcommittee chairman, said in his opening remarks.
“Despite all of these benefits, the current process for approving LNG exports is very slow,” Whitfield said.
Rep. Bobby Rush (Ill.), the panel’s top Democrat, was not buying it, saying opponents of expanded exports, “primarily from inside the U.S. manufacturing sector, disagree with those conclusions, and argue that exporting LNG will raise natural gas prices within the U.S., harm American manufacturing and LNG-intensive industries and also hurt the natural gas consumer.”
Lawmakers held the hearing Tuesday to consider a bill proposed by Rep. Cory Gardner (R-Colo.) to speed federal approvals for natural gas exports to WTO countries.
Currently, the Department of Energy (DOE) must approve export applications for countries other than the 20 with which the United States has a free-trade agreement. DOE cannot deny such applications for free-trade countries.
DOE has so far given conditional approval to seven non-free-trade export projects, and 24 more are awaiting review. Paula Gant, DOE’s deputy assistant secretary for oil and gas, said recent approvals have taken only two to three months.
But that isn’t fast enough for the Republicans at Tuesday’s hearing. They want WTO countries to be treated the same as those with free trade agreements.
Rep. Fred Upton (R-Mich.) agreed with the benefits his colleagues predicted. While he admitted that the first exports of LNG to these countries would be years away, he felt it was nonetheless important.
{mosads}“It will indeed send a message, the right message, and a very powerful signal. The U.S. will be well positioned as a global energy superpower,” Upton said. “Increasing exports would also result in the flow of billions of dollars to the United States economy.”
“These countries need to free themselves from the extortion of Russian energy markets,” Rep. John Shimkus (R-Ill.) said, referring to European countries that depend on Russia for energy.
Though Rush did not completely dismiss the proposal at hand, he cautioned that if Congress does change the approval process, “I believe that it is imperative that we do so in a matter that is reasonable, that is safe and that is truly in the public interest.”
The public interest was a common concern for Democrats, who were troubled by the fact that by removing DOE review from export approvals, Gardner’s bill would also remove any evaluation of whether such exports would be in the public interest, and would remove public input from the process.
“We need to carefully consider the impact of LNG exports on natural gas prices, and the impact of higher prices on consumers and manufacturers. And we also have to look at the impact of LNG exports on global carbon emissions,” said Rep. Henry Waxman (D-Calif.). “I’m not opposed to DOE considering applications for additional LNG exports, but I want those reviews to be thorough.”
While Gant thoroughly explained DOE’s process for considering applications, she said the Obama administration had not taken a position on Gardner’s proposal.
Gant lent support to backers of Gardner’s bill, saying that DOE analysis has found that increased natural gas exports are not likely to significantly increase U.S. prices.