Republicans may try to speed gas exports, Keystone approval

House Republicans are considering legislation that would force the Department of Energy to hurry its approval process for liquefied natural gas export facilities, Majority Whip Kevin McCarthy said Monday in Houston.

Growing numbers of Republican officials are saying U.S. natural gas can be a powerful geopolitical tool to combat Russia, led by President Vladimir Putin. Russia is a dominant source of the fuel in Europe.
“What Putin has done with Russia to control Europe through energy — America has a way to deal with it,” McCarthy said.

McCarthy also said Republicans may try to push legislation to force approval of the Keystone XL pipeline, which would link Canadian oil sands with the U.S pipeline network. He did not describe specific measures in either case during a meeting with energy reporters at the Houston Chronicle editorial offices.

The California Republican visited Houston at the invitation of U.S. Rep. Kevin Brady, R-The Woodlands. McCarthy said he was visiting with local officials and business leaders.

McCarthy also was scheduled to attend the Houston Livestock Show and Rodeo on Monday night.

The Department of Energy has a backlog of two dozen projects awaiting permission to export liquefied natural gas to countries that don’t have free trade agreements with the U.S. Those permits are critical to the viability of the projects, which typically don’t make economic sense unless they can export beyond free trade nations.

Shale boom

Before the shale boom led to a surge in natural gas production, U.S. companies had focused on building import facilities, expecting that shortages would boost demand. Now they want to build plants – in some cases on the same sites as existing import terminals – to liquefy gas for transport by tanker.

As it stands, six projects have approval to export beyond free trade countries, but none is yet in operation.

McCarthy said he and his GOP colleagues don’t want to force the Energy Department to ignore the criteria it must follow as it evaluates the projects, but Republican lawmakers think that work can be done more quickly.

House Speaker John Boehner of Ohio and other Republicans have latched on to the idea of expediting U.S. natural gas exports to Europe as a way to counter the influence of Russia, which is becoming increasingly aggressive toward neighboring Ukraine as it eyes semi-autonomous Crimea.

Russia recently announced it had ended discounts on natural gas exports to Ukraine and in the past it has cut off or reduced supplies there.

Skeptics about issue

But skeptics about the value of natural gas as a diplomatic tool argue that even if all the export facilities received permits today, it would still take billions of dollars and years of construction for them to come online.

And they note that Europe’s natural gas infrastructure mostly is designed to receive gas from Russian pipelines – not U.S. tankers.

Furthermore, once the government allows companies to export gas, it lacks authority to tell them where to send it. Many of the projects taking shape are counting on Asian nations to be their primary or only customers.

McCarthy argued, however, that even if natural gas exports wouldn’t immediately play a role in Eastern Europe geopolitics, expediting the infra-structure development could make natural gas a winning diplomatic hand in the future.

“We can’t be over there today, but we could start building now,” he said.

“If you’ve got these permits sitting in there, let’s get them out. Let’s not wait a long time.”

Some U.S. industries that use natural gas as a fuel and raw material are less enthusiastic about exporting natural gas because they fear the relatively low domestic price would rise.

Two-year hiatus

The Energy Department took a two-year hiatus on LNG export approvals to study their economic impact, resuming the approval process last year. The reviews since then have taken one to three months.

McCarthy also suggested House Republicans would try to pass legislation forcing the Obama administration to approve the Keystone XL pipeline, which could turn up political heat on Senate Democrats facing tough re-election bids in states that went for Republican nominee Mitt Romney in the 2012 presidential election.

A Washington Post-ABC News poll published last week found strong public support for the pipeline, especially among Republicans.