Houston Democrat brokers deal to advance US gas export bill

WASHINGTON — Legislation to fast track U.S. natural gas exports moved one step closer to House passage on Wednesday, after modifications brokered by a Houston Democrat.

On a mostly party line vote of 33-18, the Energy and Commerce Committee approved the bill that would force the Energy Department to make a decision on applications to sell natural gas overseas within 90 days. That would, for the first time, impose a deadline on the Energy Department’s currently open-ended process of determining whether proposed exports to most nations are in the public interest.

Proponents of sending more U.S. gas overseas — including energy companies and their allies on Capitol Hill — say those reviews are taking too long, contributing to a backlog of 24 export applications at the Energy Department and threatening the nation’s opportunity to supply Asian countries.

Dozens of projects have been proposed along U.S. coastlines to chill natural gas, transforming it into a liquid that can be transported around the globe.

Deadline for action

As originally drafted by Rep. Cory Gardner, R-Colo., the bill would have given near-automatic Energy Department approval to applications to sell natural gas to World Trade Organization nations. But under the compromise reached by Gardner and Rep. Gene Green, D-Houston, the department would have a 90-day deadline.

Green said the agency currently takes about two and a half years.

The bill would ensure that “90 days after the closing of the comment period, they have to make a decision,” he said. “It could be yes or no, but they have to make a decision.”

For most pending applications — on which public comment periods have closed — the clock starts after the measure’s enactment. Proposed exports to nations that have free-trade agreements with the United States still would be near-automatically approved, under a separate amendment adopted Wednesday. And the bill would not change environmental and facility reviews by the Federal Energy Regulatory Commission.

Helping allies

Although House Republican leaders are expected to bring the measure to the floor later this month and passage is almost guaranteed, it probably won’t gain traction in the Democrat-controlled Senate, where there are similar proposals already.

Bill supporters said the legislation is needed to speed U.S. natural gas shipments to allies overseas and help weaken Russia’s stranglehold as a major European energy supplier.

But critics said the move to accelerate Energy Department export permits would not put U.S. gas in Europe’s hands any sooner. Companies involved in the planned export projects are aiming their sights on Asia, where gas can fetch several times what it does inside the United States.

Beyond that, there are big logistical, regulatory and economic obstacles to the projects, which can take years and billions of dollars to build.

No matter how many applications the Energy Department approves, “there are not going to be hundreds of LNG terminals built on the coast of the United States,” said Rep. Joe Barton, R-Texas. “There will be one to two on the East Coast, one or two on the West Coast, and maybe two or three on the Gulf Coast.”

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Even so, the market should dictate the winners and losers, suggested Rep. Mike Doyle, D-Pa.

“We know full well that most of these facilities will never be built,” Doyle said, “but each deserves a fair shot at [the Energy Department].”

Still, even some lawmakers who support exports — and Gardner’s bill — urged caution. Green said he is concerned that if the U.S. swings the export door wide open, the global price of natural gas will rise, an issue that utilities and manufacturers also have raised.

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“I fear we are exporting away the competitive advantage of low prices that we need to spur our domestic manufacturing base, Rep. Paul Tonko, D-N.Y. said.

At the same time, Tonko and Rep. Anna Eshoo, D-Calif., said, broad LNG exports could strain domestic stockpiles of natural gas, translating into higher prices for electricity and home heating whenever domestic demand climbs.

Tonko said the cold weather this year — and the resulting climb in natural gas costs — caused electricity prices to triple in New York’s Capital region.

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