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Policy: Environment & Energy

House committee OKs natural gas export bill

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Energy Department,Russia,PennAve,Energy and Environment,Zack Colman,Natural Gas,Europe,Ukraine,Trade,Cory Gardner

The House Energy and Commerce Committee passed a pared-back bill to expedite approvals of natural gas exports, setting up an eventual vote on the House floor.

Five Democrats joined Republicans in a 33-18 vote to approve Colorado Republican Rep. Cory Gardner's bill. But it's hardly recognizable compared with the bill Gardner took to the committee.

The committee passed an amended measure that requires the Energy Department to rule on existing applications for exports to nations that lack a free-trade agreement with the U.S. within 90 days. The original version would have automatically approved all 24 pending natural gas export proposals, and would have extended a less stringent review process to World Trade Organization members rather than just countries with free-trade agreements.

The move was a "compromise" to get Democratic support, said Charlotte Baker, a committee spokeswoman for the majority. Republican leadership has hoped passing the bill would give Gardner a boost in his race to unseat Sen. Mark Udall, D-Colo. The incumbent Udall is sponsoring similar legislation to the original Gardner bill in the upper chamber.

Republicans and some Democrats have said the Energy Department is processing export applications to nations that lack a free-trade agreement with the U.S. too slowly — so far it has given seven the green light, amounting to 9.3 billion cubic feet per day of exports. Such projects must be deemed in the public interest, and therefore invite more scrutiny.

But Rep. Anna Eshoo, D-Calif., said the Gardner bill moved the approval process along too fast for an issue that has evolved relatively quickly.

"I think this is riddled with problems. It's not a clear-cut case — it's being presented as one," she said before the vote.

Supporters of Gardner's bill said the legislation would clear a logjam at Energy and provide relief to European allies.

"The number one foreign policy request from our allies in Europe is H.R. 6," Rep. John Shimkus, R-Ill., referring to the bill number, said before the vote.

Officials from several Central and Eastern European countries have increasingly lobbied lawmakers and the Obama administration to speed approvals in the wake of Russia's incursion into Ukraine, as they have stressed that over-reliance on Russia's natural gas supplies have put them in a tight spot.

While Ukraine might not receive any natural gas from the U.S. — it lacks an import facility, and U.S. natural gas is unlikely to be competitive with piped gas from elsewhere in the region — export backers, including Obama administration officials, argue supplies coming onto the market will give buyers leverage to negotiate better contracts with Russian state-owned utility Gazprom.

But some Democrats said they were concerned that exports would raise prices for domestic manufacturers — an issue that some, such as Midland, Mich.-based Dow Chemical, have consistently raised.

Rep. Jerry McNerney, D-Calif., said the U.S. Energy Information Administration noted a high-export scenario could raise natural gas costs on manufacturers between 5 percent and 27 percent, which he said would threaten productivity.

Industry experts, however, don't anticipate that all export projects in the Energy Department's queue will get built. International competitors will begin to come online by the end of the decade, which will tame investment in the U.S. because the global market can handle only so much liquefied natural gas.

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