UPDATE 1-Faster U.S. LNG export permits a step closer as DOE bill clears House panel

Wed Apr 30, 2014 1:07pm EDT

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(Adds details about vote, comments from lawmakers)

By Ayesha Rascoe

WASHINGTON, April 30 (Reuters) - The U.S. House energy committee has approved legislation to limit the length of review time for liquefied natural gas export applications, in a compromise aimed at attracting bipartisan support for speeding up U.S. gas shipments overseas.

The bill, passed by a vote of 33 to 18, would require the Department of Energy to issue a decision on applications 90 days after the close of their public comment periods.

Backers of speeding up the reviews argue that doing so would improve energy security for U.S. allies in Europe and Ukraine, which now rely heavily on Russian gas.

More than half of the more than 20 pending applications have been past their comment periods for more than three months. The measure would set a deadline for the DOE to weigh in on these projects 90 days after the bill is passed into law.

Companies would still need approval from the Federal Energy Regulatory Commission before they could begin construction of a LNG project.

The legislation is likely to pass the Republican-controlled House but faces an uncertain future in the Senate, where Democrats hold the majority.

Only five of 24 Democrats on the House panel voted for the bill, citing concerns about providing adequate time for application reviews.

The version of the bill passed out of the committee was a compromise between its Republican sponsor, Congressman Cory Gardner, and Democrats from natural gas producing states.

Gardner's original bill would have automatically permitted LNG exports to any member of the World Trade Organization, essentially eliminating the need for Energy Department review.

But this raised concerns from even those Democrats who were generally supportive of shipping U.S. gas abroad.

"This is an effort to improve the bill, so we can at least keep the Energy Department in the loop," said Congressman Gene Green, a Democrat from Texas.

After the 90-day clock on LNG applications runs out, the bill would allow applicants to take legal action against the department if it has not issued a decision.

Concerns about diversifying fuel sources in Europe and Ukraine have escalated since Russian forces seized control of the Crimean peninsula. Moscow has in years past cut gas supplies during regional disputes.

Democrats who opposed Gardner's measure said it could lead to flawed reviews of pending applications and not do much to get LNG overseas more quickly.

"There's not much point in preserving the public interest determination if the review is going to be so truncated that there is not an opportunity to weigh the pros and cons," said Congressman Henry Waxman, the top Democrat on the committee.

At a separate hearing on Wednesday, an Energy Department official said the department was reviewing applications as quickly as possible.

"These are all very complex, sensitive, complicated evaluations  where we have to balance a myriad of sometimes conflicting interests," said Christopher Smith, deputy assistant secretary for fossil energy. "The department has established a reliable track record of moving through the queue." (Reporting by Ayesha Rascoe; Additional reporting by Timothy Gardner; Editing by Ros Krasny, Jeffrey Benkoe and Sofina Mirza-Reid)

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