Democratic News

Washington, DC – Today, U.S. Senators Joe Manchin (D-WV) and Debbie Stabenow (D-MI) pressed American Ethane CEO, John Houghtaling II, about ongoing contracts between American Ethane and several Chinese companies. The Senators asked Mr. Houghtaling for more details regarding three Chinese contracts, how American Ethane will ensure business decisions are made in the national interest despite the fact that three Russian individuals have a combined 88% stake in the company and for American Ethane to submit the contracts for review by the Committee on Foreign Investment in the United States and Bureau of Industry and Security export control. 

Senator Manchin is the Ranking Member of the Senate Energy and Natural Resources Committee and Senator Stabenow sits on the Committee. As Ranking Member, Senator Manchin has repeatedly stressed the threat of China and Russia’s use of LNG as a geopolitical weapon. He has also voiced concerns about the lack of transparency surrounding the $83 billion Chinese investment in West Virginia energy production. 

The Senators said in part, “Ensuring a strong domestic supply of vital manufacturing feedstock fuels, coupled with strict oversight that determines natural gas liquid exports are in our national interest, is imperative for the security of our nation.  Massive volumes of exports to any single nation whose values do not align with ours is simply irresponsible, and we believe we must take action now to ensure we do not miss the opportunity to protect our domestic manufacturers from missed opportunities and our consumers from price spikes.”

 

Read the full letter below or click here.

 

Dear Mr. Houghtaling:

 

We understand that during the 2017 U.S.-China Business Exchange, the Nanshan Group of China signed a $25 billion, 20-year trade deal to receive liquid ethane from your company, American Ethane. Subsequently, we understand that American Ethane has also signed contracts with two more Chinese companies, Ganergy Group and Yangquan Coal Group, resulting in contracts totaling $72 billion over 20 years to export ethane from the U.S. Gulf Coast to China. We are concerned that the deals your company has entered into put at risk our domestic feedstock supply for own manufacturing industry. The U.S. Department of Commerce stated that the trade and investment deals part of the 2017 U.S.-China Business Exchange are subject to all applicable U.S. laws, including review by the Committee on Foreign Investment in the United States (CFIUS) and the Bureau of Industry and Security (BIS) export control; however, we understand that neither CFIUS nor BIS review apply to the export of natural gas liquids to ensure they are consistent with the national interest.  While we support energy exports, we do not support it at the expense of our national and economic security.

 

With the exponential growth in domestic natural gas production over the last decade, there are increasing opportunities for growth in the petrochemical industry.  In its Annual Energy Outlook 2018, the Energy Information Administration projected a near doubling of natural gas liquids production over the next thirty years, supported by an increase in global petrochemical industry demand.  The Department of Energy tells us that natural gas from the Appalachian and Permian basins will be principle drivers for growth in national production.  This growth in the petrochemical industry is expected to lead to more jobs and tax revenue and will diversify the domestic manufacturing base.   

 

Ensuring a strong domestic supply of vital manufacturing feedstock fuels, coupled with strict oversight that determines natural gas liquid exports are in our national interest, is imperative for the security of our nation.  Massive volumes of exports to any single nation whose values do not align with ours is simply irresponsible, and we believe we must take action now to ensure we do not miss the opportunity to protect our domestic manufacturers from missed opportunities and our consumers from price spikes.  

 

Therefore, we respectfully ask for a formal and prompt response to the following questions and would welcome the opportunity to meet with you or your staff to discuss them further:

 

  • Please explain what American Ethane’s three Chinese contracts entail with regards to the volumes of exports promised, the time periods of the contracts, and any ancillary agreements. 

 

  • Given that three Russian individuals have a combined 88% stake in your company, how can you ensure that your business decisions are considering the interests of the U.S. first and foremost? 

 

  • Would American Ethane voluntarily submit the three Chinese contracts for review by CFIUS and BIS export control? 

We look forward to your response. 

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