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POLITICS: PennAve

Ukraine a talking point for both backers and detractors of natural gas exports

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Energy Department,National Security,PennAve,Energy and Environment,Foreign Policy,Zack Colman,Natural Gas,Ukraine

Advocates and opponents of expanding U.S. natural gas exports are using the crisis in Ukraine to plead their cases as debate over the issue reaches a fever pitch on Capitol Hill.

The House Energy and Commerce Committee is giving its blessing to a bill being introduced Thursday by Rep. Cory Gardner, R-Colo., who is running for Senate.

Gardner said his bill to expedite natural gas exports "serves our national security interests as an aggressive Russian regime looks to expand power in former Soviet Union countries. By acting to speed up export approvals, we can help our allies in the region and across the globe while creating jobs and economic opportunity here in Colorado."

It comes as Republicans and centrist Democrats in both the House and the Senate are amplifying calls to speed natural gas export approvals to give Ukraine relief from Russia. Gazprom, Russia's state-owned energy firm, supplies most of the Ukraine's energy, and Russian President Vladimir Putin wields his natural gas supplies as a diplomatic stick in Central and Eastern Europe.

The Ukraine situation has proven a talking point for Republicans and centrist Democrats who are displeased with the pace of Energy Department approvals for natural gas exports to nations that lack a free-trade agreement with the U.S. The DOE must find such exports in the public interest — it has green-lighted six projects, with 24 pending.

House Speaker John Boehner, R-Ohio, reiterated that point Thursday, as did Sen. John Barrasso, R-Wyo., on Wednesday, touting his bill to expedite natural gas exports to NATO allies and Japan at the GOP leadership press conference. Even Sen. Mark Udall, D-Colo., the incumbent facing a challenge from Gardner, came out Tuesday in support of sending more natural gas abroad to assist Ukraine.

The calls, however, belie some of the logistical and economic realities.

Only one export terminal will be ready earlier than 2017, as converting import facilities to export costs billions of dollars and takes several years. Building them from scratch, as some in the Pacific Northwest would require, takes even longer.

And even then, suppliers are not striking contracts with Ukraine. The U.S. would have its most significant price advantage with Asia, and tanker-carried natural gas would prove costlier than fuel coming via pipeline in Europe.

"The hard fact of the matter is that [liquefied natural gas] exports to central Europe are not economically viable," said America's Energy Advantage, a coalition of manufacturing companies that have urged restraint on exports.

Some U.S. manufacturers have warned that exporting too much would increase domestic prices, undoing the competitive advantage for cheap natural gas the shale gas boom has awarded them.

But experts say not every project would get built even if DOE approved all of them. That's because other global suppliers are coming online, squeezing the amount of U.S. natural gas the market could handle.

That hasn't stood in the way of some Democrats who want to pre-empt the possibility of export expansion. A pair of Ohio congressmen -- Democrat Tim Ryan and Republican Bill Johnson -- wrote to Energy Secretary Ernest Moniz on Thursday about such lawmakers.

They told Moniz that they're "particularly concerned with public statements from lawmakers who have previously been opposed to LNG exports, and have made threats to hold up a Department of Energy nomination until they were assured of a delay in the approval process" — an apparent allusion to Sen. Debbie Stabenow, D-Mich., who has threatened to hold up the nomination of Christopher Smith to lead the DOE's Office of Fossil Energy.

Stabenow's state is home to Midland, Mich.-based Dow Chemical, one of the more prominent companies stressing caution on natural gas exports. She too has questioned whether shipping natural gas abroad is a good idea.

And Sen. Ed Markey, D-Mass., who also is wary of granting more exports, introduced a bill Thursday that he said would raise the bar for DOE to approve exports. He said it would force the department to first assume sending natural gas abroad is not in the public interest, rather than supposing it is as current law dictates.

“Using this crisis as an excuse to rapidly and massively expand exports of America’s natural gas won’t help Ukraine now. What massively exporting America’s natural gas will do is undercut American manufacturers trying to create jobs. It will raise costs for consumers already paying high energy bills," Markey said.

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