U.S. lawmakers mull speedier gas exports to help Ukraine, Europe

WASHINGTON Tue Mar 25, 2014 4:32pm EDT

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WASHINGTON (Reuters) - The U.S. shale gas boom should be used to counteract Russian influence in Europe and on Ukraine, a key senator said on Tuesday, as lawmakers weighed changes to export policy to take into account a shifting geopolitical landscape.

European worries about the security of energy supplies have skyrocketed since Russian forces seized control of the Crimean peninsula from Ukraine this month. Moscow has in years past cut gas supplies during regional disputes.

The Ukrainian crisis has led to intense scrutiny of export rules for U.S. liquefied natural gas. The regulations require the Department of Energy to grant permission for natural gas exports to all but a handful of countries, such as Canada, which have free trade agreements with the United States.

Hearings before the Senate and House energy committees on Tuesday focused on whether speeding up the Obama administration's review of two dozen pending export applications could help U.S. allies reduce their dependence on Russia for natural gas.

The export projects, once approved, would take several years to construct and actually ship gas.

"The last thing (Russian President Vladimir) Putin and his cronies want is competition from the United States of America in the energy race," Senate Energy Committee Chairwoman Mary Landrieu said at a hearing on Tuesday.

The hearing was the Louisiana Democrat's first as head of the Senate panel, after taking over in February from Oregon's Ron Wyden.

The session came a day after the Energy Department's sixth approval of LNG exports from a U.S. plant in the past 10 months.

The DOE has kept up a steady pace of approvals since May, and it was unclear whether recent rhetoric about the Ukrainian situation was affecting its timetable.

Opponents of unlimited U.S. gas exports have argued that shipping too much could cause prices to rise in the United States, hampering economic growth.

AUTOMATIC APPROVALS

The House Energy Committee considered a measure Tuesday, known as H.R. 6, that would allow U.S. natural gas exports to be made without government approval to any of the more than 159 countries that belong to the World Trade Organization.

While the administration has not officially taken a position on the measure, Deputy Assistant Secretary for Oil and Natural Gas Paula Gant told lawmakers the bill would essentially eliminate the need for Energy Department review.

She stressed that the department is considering applications as quickly as possible, even though export boosters are clamoring for more action.

"DOE understands the significance of this issue, as well as the importance of getting these decisions right," Gant said.

The top Democrat on the House panel, California's Henry Waxman, said he had concerns about the bill.

"Rubber-stamping unlimited LNG exports without any determination that they are in the public interest could have serious unintended consequences," Waxman said.

Among the opponents of unfettered U.S. exports, a coalition of industrial companies, led by Dow Chemical Co, has disputed claims that speeding up export approvals would help Ukraine or U.S. allies. They argue that substantial U.S. gas exports remain years away and that much of the exportable gas has been committed to countries like India.

Supporters of the bill argued that even with Energy Department approval, not all of the projects would be built. Companies would still have to secure investors for the multi-million-dollar plants, as well as permits from the Federal Energy Regulatory Commission.

At the Senate hearing, Lithuania's energy minister, Jaroslav Neverovic, urged lawmakers to allow allies such as his Baltic country to bypass the lengthy federal review process by designating shipments to those countries as being in the national interest.

"It would strengthen buyers so that we don't have to attach ourselves to these long-term (Russian) contracts because there will be gas in the market," Neverovic said.

Russia is Lithuania's sole supplier of natural gas. The country pays one of the highest prices for gas in Europe, due to disagreements with Gazprom, Russia's state-owned gas company.

(Reporting by Ayesha Rascoe; Editing by Ros Krasny, Steve Orlofsky, Lisa Shumaker, Jonathan Oatis and Meredith Mazzilli)

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Comments (16)
tmc wrote:
Yep, lot’s of promises and even laws to get what they want, then change those laws later to get even more. The USCA cannot be trusted at all. Corporations are not subject to law, and neither are there political puppets.

Mar 25, 2014 8:03am EDT  --  Report as abuse
JamesChirico wrote:
This is a horse pulling an empty cart. Before you can export the excess natural gas, it has to be liquified. There are only a few plants operating in the US, not close to the amount needed to help European supply. Even on a fast track approval, it will be years before we can up LNG production to export enough to replace Russian supply. It would be better to have a tax write off like an investment tax credit for new LNG plants than any other measure. We as a country are better off using LNG to power our motor fleets anyway being cheaper than diesel and gasoline.

Mar 25, 2014 8:07am EDT  --  Report as abuse
IDQ wrote:
This is another attempt by the Obama administration to artificially raise the price of fossil fuels to make it apparent that natural gas is not a reliable source so that wind and alternative energy subsidies can be continued. If the claim is that it contributes to green house gasses then why does it matter where it is consumed. Why not consume it domestically.

Mar 25, 2014 8:09am EDT  --  Report as abuse
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