WASHINGTON — The controversy surrounding exports of U.S. natural gas hasn’t disappeared, but recent congressional votes suggest the tide may be turning on the issue, as the Energy Department authorizes more companies to sell the fossil fuel overseas.
On Thursday, the House of Representatives voted 142-276 to reject a plan from Rep. Peter DeFazio, D-Ore., that would block exports of natural gas produced on public lands. That was a greater margin of support for the foreign energy sales than during three similar votes last year.
DeFazio said the foreign sales threaten a resurgence in domestic manufacturing, as companies move operations back to the United States to take advantage of cheap power supplies and feedstocks from surging U.S. natural gas production.
Most experts believe that by expanding the marketplace for natural gas harvested inside the U.S., exports could cause the domestic price to rise — but opinions vary widely on just how much.
“We have manufacturing companies bringing production back to the U.S. because of our plentiful natural gas and saying it is to our advantage, our energy is cheaper here, our feed stocks are cheaper here,” DeFazio said on the House floor. “If we begin to export in great volume the raw material, the feed stock, the natural gas through a liquefied process, then suddenly it will be we are in the international market. It means a dramatic run-up in natural gas prices. We will lose our competitive advantage for domestic manufacturing.”
But Rep. Michael Turner, R-Ohio, said the idea of hoarding U.S. natural gas is “ill-conceived.”
“Increasing natural gas exports would provide our allies with an alternative and reliable source of energy, helping to strengthen our economic and geo-political partnerships,” Turner said. “Restraining U.S. natural gas exports would only hurt our abilities to bolster strategic partnerships and create jobs right here at home.”
Ultimately, 56 Democrats joined 220 Republicans in voting against DeFazio’s plan, while 140 Democrats and 2 Republicans — Jeff Fortenberry of Nebraska and Walter Jones of North Carolina — voted for it. (See the full vote tally here).
The vote revealed a slight uptick in the number of lawmakers who either support energy exports — or at least don’t want to ban them outright.
Bill Cooper, the president of the Center for Liquefied Natural Gas, said the wider margin “demonstrates growing momentum in Congress for liquefied natural gas exports.”
“With the defeat of this amendment, the House of Representatives (reaffirmed) its commitment to free trade,” Cooper said.
The most recent tally also may reflect changes in the House membership since last year and the narrower wording of DeFazio’s proposal — which only would have restricted exports of natural gas extracted from public lands. Previous measures have applied to oil carried through the proposed Keystone XL pipeline or both oil and gas.
Also, in the year since the previous 2012 votes on energy exports, the notion of foreign sales of U.S. fossil fuel has gone from mostly hypothetical to real.
The Energy Department has approved four applications to sell natural gas to countries that do not have free-trade agreements with the United States, and last week it increased the amount authorized for sale from the Freeport LNG facility planned in Quintana Island, Texas.
Here’s how those previous votes broke down:
- On Feb. 15, 2012, the House voted 173-254 to reject an amendment from then-Rep. Ed Markey, D-Mass., that would block oil carried by the Keystone XL pipeline and resulting fuel products made from it from being exported. Twenty-four Democrats joined 230 Republicans in voting against the measure.
- On June 21, 2012, the House voted 161-256 to reject a Markey amendment that would bar the export of oil and gas produced under new leases covered by an underlying bill. Thirty-one Democrats joined 225 Republicans in voting against the proposal.
- On July 25, 2012, the House voted 158-262 to reject a Markey amendment that would bar companies from exporting any gas resources produced from leases sold that would be sold under the underlying legislation. Thirty Democrats joined 232 Republicans in voting against the amendment.
Critics of expanded gas exports — like DeFazio — worry that the United States is moving too quickly to authorize foreign sales of liquefied natural gas, without a clear understanding of how that might affect domestic prices. The recent Energy Department decisions have been predicated on a third-party study that concluded in 2012 that broader natural gas exports would have net economic benefits for the United States, but some large natural gas users have been skeptical.
On Thursday, America’s Energy Advantage, a coalition including the Dow Chemical Co., other manufacturers and gas distribution firms, released a memorandum for policymakers that highlights the high stakes.
“Unchecked LNG exports will cause domestic gas prices to spike, harming consumers, manufacturers and adversely impacting the economy,” the analysis said, citing a raft of studies that predict higher electricity prices and energy costs if export levels tip above six billion cubic feet per day.
The group also faulted the Energy Department’s reliance on the 2012 third-party exports study, saying its data is outdated now.
“The natural gas marketplace has evolved so rapidly that the conclusions made in the Department of Energy’s commissioned report by NERA Economic Consulting have been rendered obsolete,” America’s Energy Advantage said. “Nearly every respected energy market analysis has forecast natural gas demand – domestically and internationally – to dramatically exceed DOE projections.”