* Industry divided on the amount of LNG exports allowed
* Chairman Wyden says time for a fresh look at policy
* Environmentalists want more regulation of natgas output
By Ayesha Rascoe
WASHINGTON, Feb 12 U.S. natural gas policy, from
hydraulic fracturing to exports, came under the microscope on
Tuesday as environmental and industry groups presented their
views on the issue to Congress and divided along mostly familiar
On a day U.S. President Barack Obama is set to lay out his
agenda in the annual State of the Union address, the Senate
Energy Committee examined the implications of a shale gas
revolution that has upended the American energy outlook.
Technological breakthroughs in the drilling technique known
as hydraulic fracturing, or fracking, have unlocked massive
reserves of U.S. shale natural gas in recent years.
The dramatic change in the energy landscape has sparked
debates over the environmental impacts of rapidly expanding
shale gas development and how much of the nation's gas should be
allowed to be shipped abroad.
In his first hearing as chairman of Senate energy committee,
Democratic Senator Ron Wyden of Oregon lauded the growth in
natural gas production, but stressed the need for adequate
regulation and urged a thorough review of gas export guidelines.
"It is clearly time for a fresh look at our current policies
and to start thinking about how to update those policies to
reflect a very new reality," Wyden said.
Booming shale gas output has opened the door to substantial
LNG exports. More than a dozen companies are lined up waiting
for approval to send gas abroad.
The issue has divided lawmakers and manufacturers however,
with some raising concerns that copious exports will hurt
certain energy intensive domestic industries that recently have
used low gas prices to gain a competitive advantage.
"Unchecked LNG export licensing can cause demand shocks, and
the resulting price volatility can have substantial adverse
impacts on U.S. manufacturing and competitiveness," Andrew
Liveris, chief executive of Dow Chemical, said in
Dow, one of the most vocal critics of unfettered exports,
left the National Association of Manufacturers over its
opposition to any bans on gas exports.
While stressing the belief that LNG exports should be
governed by free trade, a NAM official said at the hearing that
policy should not favor exports or domestic gas use.
"If the United States went down the path of export
restrictions, even more countries would quickly follow suit and
could easily limit U.S. access to other key natural resources or
inputs that are not readily available in the United States,"
NAM's Ross Eisenberg said in prepared testimony.
The shale gas bonanza has also spurred a backlash from
environmentalists and some communities near drilling sites, who
complain that fracking is a threat to public health.
Fracking, is a drilling technique that involves the
injection of water, sand and chemicals underground at high
pressure to extract fuel.
Frances Beinecke, head of the Natural Resources Defense
Council, said the government should repeal exemptions for oil
and gas industry in various environmental laws. Currently,
fracking is mostly exempt from federal regulation.
"Now shale gas production is expanding with supersonic speed
without having in place even the basic environmental and public
health requirements that apply to other industries," Beinecke
said in prepared testimony.
The NRDC opposes expanded fracking until "effective
safeguards" are in imposed. Oil and gas drillers dispute the
notion that fracking poses a threat to the environment and argue
that states are best placed to regulate drilling.