House passes bill to speed up natural gas exports

WASHINGTON — The House voted Wednesday to force the Obama administration to accelerate its scrutiny of dozens of proposed natural gas export projects, responding to energy companies’ clamor to sell the fossil fuel to Japan, Thailand and other countries.

The measure, which passed 266-150, represents a bid to hasten federal regulatory reviews of the multibillion-dollar projects needed to transform natural gas into a liquid that can be loaded into tankers and shipped overseas. Although the Energy Department has issued seven licenses to broadly export liquefied natural gas to countries that do not have free-trade agreements with the United States, some two dozen more proposals are pending.

The legislation would impose a 30-day deadline for the Energy Department to rule on those applications, with the clock starting after the bill is enacted or the required environmental reviews of the construction plans are finished.

That’s a big change from the original version of the bill, sponsored by Rep. Cory Gardner, R-Colo., which would have deemed many pending natural gas export applications automatically approved.

Rep. Gene Green, D-Houston, helped broker the compromise that preserved some Energy Department review of the export proposals while imposing the deadline for its action. The effect was to guarantee Green’s “aye” vote and lure other Democratic support. Ultimately, 46 Democrats joined 220 Republicans in voting for the modified legislation Wednesday.

“I wasn’t an original cosponsor, but through our committee process, we have worked it out, Green said. “We achieved bipartisan support in the committee because we were working together. I think that is what the American people want Congress to do.”

The measure now heads to the Senate, where it dovetails with a similar measure imposing a slightly more generous 45-day deadline on the Energy Department’s export reviews.

Bill Cooper, president of the Center for Liquefied Natural gas, said Green’s involvement was “critical” in making the legislation “more palatable to a wider group of policymakers both on the House side and the Senate side.”

“For Mr. Green to be on board, I think, hopefully paves the way for some other Democrats to vote for this bill,” Cooper said ahead of the House vote. “As ugly as the process can be, and as difficult as it has been to move legislation through this Congress . . . it’s nice to see there’s been a genuine effort to reach a bipartisan compromise here and hopefully (get) something that can pass the Senate and be signed into law.”

Bill backers touted the potential of U.S. natural gas — or even the threat of it entering the world market — to blunt Russia’s negotiating power as a major supplier of the fossil fuel.

Gardner said the United States can use natural gas instead of military troops to push back against Russia’s aggression and help allies overseas.

“The very passage of this legislation, the signal that we are serious about (liquefied natural gas) exports, would immediately reduce Russia’s negotiating leverage even before the first molecule of LNG shipment actually goes out,” Gardner said.

Rep. Charles Boustany, D-La., said further delays also risk squandering “a unique opportunity” to create and sustain jobs in the U.S. tied to natural gas production as well as building the export terminals.

The Energy Department had been reviewing the export applications on a case-by-case basis, based largely on the order they were first filed with the government. Under a recently proposed change, the Energy Department will consider the applications only after the proposed physical projects have cleared required environmental reviews, generally conducted during vetting by the Federal Energy Regulatory Commission.

But export advocates say that is still no guarantee that will speed up reviews, even for the most commercially mature projects.

The existing process is too “burdensome,” said Rep. Ruben Hinojosa, D-Texas. The bill “will cut the red tape…and it will provide future applicants with a much more reasonable process.”

Critics warned against any rush to export the natural resource that is helping to fuel domestic manufacturing jobs and raised fears that U.S. gas production won’t be able to supply the foreign market and keep pace with surging domestic demand.

Rep. Henry Waxman, D-Calif., said the measure would “short-circuit” the Energy Department review process designed to “carefully consider” those pricing and supply questions.

Rep. Paul Tonko, D-N.Y., reminded lawmakers of the spikes in natural gas prices during the polar vortex this winter.

Although the factors behind those price spikes are complex and varied — including infrastructure constraints, and not necessarily production limits — Tonko said they offered “”a small taste of what happens if there is an unexpected event that increases domestic demand when ready supplies are low and exports have increased.”

Tonko warned that broad natural gas exports also risk jeopardizing a domestic manufacturing renaissance driven in part by low-prices for the fossil fuel used both for electricity that powers plants and as a chemical building block for other materials.

“We have seen 12 consecutive months of growth in the manufacturing sector and a growing trend of the reshoring of jobs back to the United States,” Tonko observed. “Why would we want to turn that trend around?”

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