Policy: Environment & Energy

White House embraces natural gas exports

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The White House endorsed expanding liquefied natural gas exports to Europe on Wednesday as part of a broad call for the continent to diversify its energy resources.

"The situation in Ukraine proves the need to reinforce energy security in Europe and we are considering new collaborative efforts to achieve this goal. We welcome the prospect of U.S. LNG exports in the future since additional global supplies will benefit Europe and other strategic partners," the White House said in announcing U.S. and European Union cooperation on a range of issues.

The proclamation comes as Capitol Hill pressure is building on the Obama administration to speed up new export approvals as possible relief for Ukraine and other Central and Eastern European nations that rely on Russia for natural gas.

Republicans and some Democrats say the Energy Department is moving too slowly on export decisions regarding nations that lack a free-trade agreement with the United States. Such deals must be in the public interest, and therefore face stricter review. The Department of Energy has approved seven such projects, with 24 pending.

Still, some Democrats oppose expediting exports, as they're worried it would raise domestic energy costs for consumers and manufacturers. They also argue expanding exports would do little to help Ukraine because U.S. export terminals aren't up and running, and Ukraine has no way to import tanker-carried supplies.

Sen. John Barrasso, R-Wyo., said those Democrats are becoming fewer in number. He told the Washington Examiner that some Democrats who had previously not taken a stance on the issue have told him privately that they're on board with sending more natural gas abroad if it means reducing Russian President Vladimir Putin's influence in his backyard.

"There are a couple that have approached me individually — they'll speak for themselves. But yes, there are additional Democrats that have come to me in support of this," Barrasso said, who added that he believed more than 60 senators support expanding natural gas exports.

Sen. Tim Kaine, D-Va., told the Examiner that Democrats have three differing opinions on natural gas: that it should be exported like any other commodity; that it shouldn't be exported at all; and that it should be exported "in strategic, limited ways for national security purposes," the view to which he ascribes.

"I think many are open that," Kaine said of the strategic argument, while adding, "This is something that is not an offbeat thought or just a thought by people who have been kind of traditionally aligned with the oil and gas industry."

That appeared to be the tack the Obama administration was taking as well, as the White House noted it had an interest in promoting "competitive, transparent, secure and sustainable international energy markets."

Witnesses at a Senate Energy and Natural Resources Committee hearing said that the signal of potential U.S. natural gas exports would be enough to eat at the dominance of Russia, which derives half its revenues from oil and gas, in European energy markets.

Adam Sieminski, U.S. Energy Information Administration chief, said that the first federally approved export terminal at the Sabine Pass in Louisiana already has allowed companies to negotiate more favorable terms with large natural gas suppliers.

"The possibility that the U.S. could enter the global market ... I think already has had some impact on the psychology of long-term contracts," he said at the Tuesday hearing.

The White House statement wasn't focused entirely on exports, though. It also noted it would work to encourage "the sustainable development of unconventional energy resources" -- a nod to shale gas produced by hydraulic fracturing, or fracking -- as well as expanding renewable energy and energy-efficiency opportunities.

David Goldwyn, a former State Department employee who in 2010 established a program now known as the Unconventional Gas Technical Engagement Program to boost shale gas development abroad, said Tuesday that more must be done to encourage European gas infrastructure integration.

But promoting fracking is a trickier proposition, witnesses at the Senate hearing said. That's because many European nations have or are considering bans or restrictions on fracking.

"Our European allies are the ones with leverage," said Edward Chow, a senior fellow at the Center for Strategic and International Studies. "Not us."

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