In a move to garner support from wary Democrats, lawmakers supporting natural gas exports are changing the focus of the debate, pitting the U.S. against rivals such as Russia and Iran and downplaying concerns that exports could be detrimental for consumers and domestic manufacturing.
Though Russia and Iran have long been the big players in natural gas in the Eastern Hemisphere, the recent domestic energy boom in the United States has opened a vast opportunity for the nation, one that could undermine Russia and Iran's vice grip on the region's energy supplies and strengthen U.S. ties to allies such as Japan and India, according to supporters.
Japan relies on Russia, the Middle East, and North Africa for 42 percent of its natural gas supplies, regions that are no strangers to using their energy resources as a political chip. Europe, too, has experienced gas supply disruptions in recent years as a result of disagreements with Russia.
That could all change – while also shaving the U.S. trade deficit and creating jobs – according to supporters of liquified natural gas (LNG) exports, if the Department of Energy eliminated the bureaucratic hoops companies have to jump through in order to export natural gas, at least for close allies of the U.S.
The issue was front and center again at the House Subcommittee on Energy and Power hearing Tuesday where Rep. Mike Turner, R-Ohio, introduced the Expedited LNG for American Allies Act, the sister bill of legislation backed by Sen. John Barrasso, R-Wyo., earlier this year.
"As energy security continues to play an important role in global relationships and dialogue, increased U.S. natural gas production stands to benefit our strategic allies abroad," Turner said in prepared remarks before the committee. "Many foreign leaders and officials have expressed to me the need to diversify energy resources away from one source or from unstable regions."
Permits for shipments to free-trade agreement countries are essentially automatically approved by the DOE, but exports to non-free trade agreement countries – including friendly nations such as Japan – require the DOE to determine if the exports are in the national interest.
Decisions on about 20 export permits to such countries have been stalled for months as policymakers hash out the ripple effects of large-scale natural gas exports, including potentially higher prices for both consumers and industries that rely on natural gas as a major feedstock.
While supporters are working hard to cement the bipartisan support needed to pass legislation allowing the DOE to expedite approval of certain natural gas export permits, there's still a long way to go when it comes to gaining more traction for the bill in both chambers, Rep. Lee Terry, R-Neb., told The Hill. "I don't think we're there yet," he said.
Nevertheless, with or without congressional support, industry experts expect the DOE to approve as many as three export permits by the end of the year. But that's only the start of the whole process; it takes several years and millions of dollars to build liquefaction plants, leading credit-rating agency Moody's to predict that U.S. LNG exports will be "minor" during this decade.
Still, the future opportunities for the United States when it comes to natural gas exports – economically and diplomatically – are vast, Turner said: "Increasing natural gas exports would not only help reduce our trade deficit and create jobs for American workers, but also help our key allies diversify their energy resources, bolster their energy and national security, and strengthen our strategic alliances."