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POLITICS: PennAve

Natural gas exports will have to wait until September

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The Senate Energy and Natural Resources Committee won't tackle legislation on liquefied natural gas exports before lawmakers depart for their August recess this week.

Chairwoman Mary Landrieu, D-La., and ranking member Lisa Murkowski, R-Alaska, with their respective caucuses, weren't able to reach an agreement on the varying proposals lawmakers have filed to expedite natural gas export approvals. With the November midterm elections nearing — in which Landrieu's seat is up for grabs — the prospects of striking a deal are looking shaky.

"Our reality is we're running out of calendar, and we saw this coming. But you've got really only a couple weeks in September, which is tough because we've got a lot of things that we want to do," Murkowski told the Washington Examiner. "Who knows what's going to happen in the world scene when we're out in August, and September? I like to think this is an important enough issue that we can figure out a way to move it."

A Landrieu aide, however, chalked it up to "getting to the silly season" with a midterm election nearing in which Senate control hangs in the balance. The natural gas export issue in particular has served as a proxy battle for re-election campaigns for Landrieu and Sen. Mark Udall, D-Colo., who has competed with challenger GOP Rep. Cory Gardner on the issue with nearly identical bills.

The aide said lawmakers are largely arguing over whether the Energy Department should have 30, 45 or 60 days to rule on applications to export natural gas to nations that lack a free-trade agreement with the United States. Such deals require more scrutiny because they must be deemed in the public interest.

"That's what we're really debating," the aide told the Examiner.

Some Democrats aren't on board with shipping natural gas overseas. Some cite concerns that doing so will raise natural gas prices, undercutting a competitive advantage for manufacturers. Worries about drinking water contamination associated with hydraulic fracturing, or fracking, also have arisen, as export supporters have said sending more natural gas abroad would raise prices enough to incentivize new drilling.

Still, many Democrats have joined Republicans to support natural gas exports, as Russia's dominance of Europe's supplies and its resulting influence in Ukraine have served as fodder for export backers. They, with some Obama administration officials, say approving more U.S. exports can give buyers leverage against Russia, which derives half its budget from oil and gas revenue — though some Democrats find those suggestions dubious, noting U.S. natural gas wouldn't head to Europe.

But there are several legislative proposals out there that claim to solve the geopolitical problem, each with their own constituencies.

"We're asking for markups now as soon as we can get it, and I'm open to whatever amendments are offered," Sen. John Hoeven, R-N.D., told the Examiner.

The Department of Energy already has proposed some changes to how it processes applications.

Responding to calls from industry groups and lawmakers, it suggested in May letting project developers who already had begun the Federal Energy Regulatory Commission filing process to jump to the front of the Energy Department's queue. Until then, the agency had issued conditional approvals for projects based on when developers had filed applications, irrespective of whether they were likely to get built. It has approved seven, with 26 pending.

"I think we've taken a good step forward on a significant part of the process," the Landrieu aide said.

Some Republicans, chiefly those in the House, and industry groups have argued that the change does little to clarify the DOE's role because it still would have the right to reject projects.

“A timely decision, even a conditional decision, sends a clear message to the customers that applicants are on track for ultimate operations of the facilities proposed,” said Bill Cooper, president of the Center for Liquefied Natural Gas. “Conversely, continued delays in issuing decisions cause uncertainty, costing applicants significant sums of money because of lost time, either in securing customers or setting definitive construction schedules."

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