US House bill would speed LNG exports to counter Russia

06 March 2014 21:44 Source:ICIS News

WASHINGTON (ICIS)--Legislation introduced in the US House on Thursday would require immediate approval of all export license applications for liquefied natural gas (LNG), citing the need to speed energy supplies to Ukraine and oppose Russia.

Representative Cory Gardner (Republican-Colorado) introduced HR-6, the “Domestic Prosperity and Global Freedom Act”, “to expedite the export of US liquefied natural gas to our global allies, including Ukraine and other Eastern European nations currently at the mercy of Russian energy supplies”.

The bill provides that all pending applications for LNG export licenses “be granted without delay” by the Department of Energy (DOE).

The legislation also would modify the standard of review for future LNG export applications.

Under current law, LNG export facilities shipping gas to countries that do not have a free trade agreement (FTA) with the US are subject to an additional level of review by DOE.

The bill would eliminate that extra level of scrutiny and give the same review process for LNG exports to any member nation of the World Trade Organization (WTO).

Gardner, along with 22 other House Republicans and one Democrat as cosponsors, contends that DOE’s approval process for LNG exports has been needlessly slow.

“To date, this administration has only approved six export applications and 24 applications are still awaiting action,” he said.

He said that expediting LNG exports would not only create jobs in the US but “also serve our national security interests as an aggressive Russian regime looks to expand power in former Soviet Union countries”.

House Energy and Commerce Committee chairman Fred Upton (Republican-Michigan), a cosponsor, said that “The turmoil in Ukraine underscores the problem with DOE’s unnecessarily sluggish LNG export approval process”.

Passing the bill, he said, would “ensure that the lifeline of US gas supplies will be available to our allies, and that we will stand firm to Putin and supplant Russia’s influence”.

The introduction of HR-6 came as the White House announced a series of restrictions aimed at Russian and Ukrainian officials said to have played a role in what the administration regards as a Russian invasion of Ukraine and the Crimea.

Also on Thursday, the House overwhelmingly passed an emergency financial aid package for Ukraine, authorising up to $1bn in loan guarantees.

That speedy action on financing assistance suggests that the House might move with equal speed on the new LNG exports measure.

There has been some unease among US petrochemical producers and downstream chemical manufacturers over prospects for significantly increased exports of LNG, fearing that such trade could drive natgas prices higher in the US.

US chemicals manufacturers are almost wholly dependent on natgas and natural gas liquids as a feedstock and energy fuel.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By Joe Kamalick