Senator aims to tie LNG export plan to Ukraine aid

WASHINGTON — Sen. John Barrasso is hoping to use a Ukraine aid package to leverage his plan for boosting proposals to export natural gas to countries that are part of the North Atlantic Treaty Organization.

Barrasso, R-Wyo., said he will offer his proposal as an amendment to a Ukraine aid package when it is considered by the Senate Foreign Relations Committee on Tuesday.

The move comes as mostly Republican lawmakers make calls for the United States to move more swiftly on proposals to liquefy American natural gas and ship it overseas. That logic held up even before Russia’s invasion of the Crimean peninsula in Ukraine, the lawmakers say, but the crisis has added urgency to the argument.

“As long as Ukraine and our NATO allies are overly dependent on Russian gas, Vladimir Putin will be able to hold them and their economies hostage,” Barrasso said. “Congress should respond by giving Ukraine as well as our NATO allies an alternative supply of natural gas.”

In a letter to House and Senate leaders, the ambassadors of Poland, Hungary, the Czech Republic and Slovakia last week argued for expedited liquefied natural gas permits to central and eastern Europe.

Although federal law generally allows natural gas exports to countries that have free-trade agreements with the U.S., the scrutiny is higher for non-free-trade partners, even those that are American allies. In those cases, the Energy Department must authorize natural gas exports unless it determines they are not “consistent with the public interest.”

Battleground: Stakes are high for LNG export plan

The Energy Department has so far approved six such non-free-trade-agreement export licenses, but another two dozen are pending review, and regulators are considering them on a case-by-case basis, following an order set in 2012, based largely on when the applications were filed. Many of the export proposals don’t have specified destinations yet or even inked contracts to sell the gas overseas, and the Energy Department’s review process does not hinge on the countries that would receive those shipments.

Last week, Russia announced that it would end discounts on natural gas shipments to Kiev, stoking the calls for the United States to use its natural gas to thwart Putin’s power.

“Russia has repeatedly used its supply of natural gas to pressure Ukraine economically and politically,” said Rep. Ed Royce, R-Calif. The option “to help counter this threat” is “reducing our current impediments to exports of American gas to the Ukraine,” Royce said.

Speaking with David Gregory on NBC’s “Meet the Press,” Rep. Peter King, R-N.Y., on Sunday stressed that boosting U.S. exports of LNG will help American allies in Europe.

“We have enough to supply so many countries in the world, and we should right now start lifting restrictions; we should begin the exporting as quickly as we possibly can,” King said. “That’s not going to work in the short term, but it can relieve some of the pressure, and it can help each country set their long-term policy to realize they are not going to be bound to Russia for their natural gas.”

Skeptics note that the U.S. government doesn’t dictate what countries and companies will get American gas; those decisions are made by private energy and utility firms that sign decades-long contracts governing the transactions.

And, critics observe that even if the Energy Department approved every LNG export application in its queue, it would take years — and many billions of dollars — to construct the facilities capable of chill ing natural gas to -260 degrees and transforming it into a liquid. Overseas receiving terminals also would have to be constructed to regasify the fossil fuel.

“Surging natural gas into Europe to respond to a crisis requires that there be infrastructure in place that can accommodate that surge,” said Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations. “That means having a bunch of unused — or partly used — European natural gas import terminals that can suddenly absorb newly arrived U.S. supplies.”

Analysis ahead: Energy chief suggests more natural gas export studies are possible

The House of Representatives overwhelmingly passed its Ukraine aid package — carrying $1 billion in U.S. loan guarantees — on Thursday, but it did not include any language on LNG exports.

Barrasso is hoping to convince a majority of the Foreign Relations members that U.S. aid should mean natural gas as well as loan guarantees.

He is expected to offer two amendments on the subjects, including one proposal that would effectively put the 28 NATO countries including Ukraine on equal footing with America’s free-trade partners, by requiring the Energy Department to approve applications to export natural gas to the NATO members. Another proposal could require LNG export approvals for a broader range of countries.

“If members are willing to provide American taxpayer dollars for Ukraine to pay its Russian gas bill, Congress should work to ensure that Ukraine has the opportunity to buy U.S natural gas,” Barrasso said, adding that his proposals would allow the United States “to be a strategic energy supplier to our allies.”

Letter From Visegrad Group Ambassadors Re Natural Gas Exports