Washington, D.C. – Senate Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore., today emphasized the importance of updating the Department of Energy’s application process for liquefied natural gas exports to reflect the country’s new bounty of natural gas, and to ensure the United States gains the greatest benefit from this strategic national asset.
Wyden, who also chairs the Senate Finance Committee on International Trade and supports expanding U.S. trade opportunities, has called for a natural gas policy that allows exports, but also prioritizes national security and protects against price shocks for domestic consumers.
“The reality is we are dealing from a position of strength with respect to energy,” Wyden said. “Our country should not be wedded to this either/or choice between no exports and no limits on exports. Done right, there ought to be a way to get the trade benefits to exporters and trading partners while maintaining the domestic, economic and energy security benefits to our country.”
At the forum Tuesday, Dr. Charles Ebinger, director of the Brookings Institution’s Energy Security Initiative, said there is need for greater clarity on the approval process for applications to export natural gas to countries that do not have free-trade agreements with the United States. Federal law calls for automatic approval of export applications to countries that have free-trade agreements with the United States, but requires a DOE determination that exporting natural gas to countries without an agreement with the United States is in the public’s best interest.
“If you read the language, it is so broad, it can include things like impact on balance of payments, impacts on energy security,” Ebinger said. “There are so many different criteria, and quite honestly, some of which I think you could legitimately argue might even be in conflict with each other.”
Current natural gas export policy is based on the 1938 Natural Gas Act, which was passed long before the current revolution in natural gas unlocked newly accessible reserves of shale gas.
“We’ve got this natural gas advantage, the rest of the world wants it,” Wyden said. “So much of the legal architecture that we’re using today, really is, to a great extent, years and years old. I’m looking at how this country can have it all. I want to see how we find a path, working in a bipartisan way, as Senator Murkowski and I have indicated, that we can really reap the fruits of a policy where we are in the advantage.”
The DOE announced last week that it had conditionally approved an application by Freeport LNG Expansion, to export domestic liquefied natural gas to countries without a free-trade agreement. The agency indicated that it had taken into account the economic, energy security, and environmental impacts in making its decision to approve the second application for such an export license.
Wyden also welcomed testimony from John Mohlis, Executive Secretary for the Oregon Building and Construction Trades Council, who discussed the proposed Jordan Cove LNG project in Oregon.
Today’s discussion marked the second in a series of three natural gas forums and brought together representatives from several interested stakeholders, including Cheniere Energy, Sempra Energy, the Energy Policy Forum, the American Chemistry Council, as well as the DOE and the Energy Information Administration. The third forum will be held Thursday and will examine the current best practices within the industry and environmental concerns regarding extraction of natural gas from shale.