House Ways & Means LNG Hearing

The Trade Subcommittee of the House Ways and Means Committee held an oversight hearing today on the “Trade Implications of U.S. Energy Policy and the Export of Liquefied Natural Gas (LNG).” Four witnesses appeared in person to testify:

  • Matthew J. Klaben for the National Association of Manufacturers.
  • Judy Hawley, Port of Corpus Christi, Texas.
  • Daniel Weiss, Center for American Progress.
  • Sarah O. Ladislaw, Center for Strategic and International Studies. Written Statement.

Klaben, Hawley, and Ladislaw were generally supportive of actions to expedite the authorization of LNG export licenses and Weiss was strongly opposed. In his written statement, Klaben said:

The DOE licensing process has become a regulatory choke point for LNG export applicants; at DOE’s current pace, some of the applications in the queue could be waiting until 2016 or later before they can move to the next step in the multi-year permitting process. As we look at demands growing in Europe, Asia, and elsewhere, we believe this process is far too slow and contrary to our long tradition as an exporting nation and to our international obligations.”

Hawley’s statement also includes a very useful quote:

If the United States fails to take advantage of this opportunity, international natural gas suppliers will focus their efforts on increasing production at other worldwide sites in places such as Canada, East Africa, and Australia. Once the large infrastructure costs are undertaken to expand LNG production at those sites and long-term supply contracts are executed, the window of opportunity for the U.S. to reap the associated economic and job growth will be closed.

Weiss, former political director for the Sierra Club, said that the existing LNG export approval process should actually be slowed down rather than increased, noting:

The approval of additional LNG export applications should occur only if they do not cause electricity price spikes that would harm families and business budgets, or impair the recent manufacturing renaissance. And such exports must help reduce—rather than increase—climate pollution. The cheapest, fastest, most economically beneficial method to meet energy needs in the U.S. or Ukraine is to launch massive energy efficiency programs to capture fugitive methane, plug leaky pipes, reduce building energy use, and reduce other sources of waste.”

Laidslaw’s key quote was this:

By taking itself out of the LNG import picture, the United States has freed up supplies of LNG to go elsewhere—and traditional U.S. suppliers are increasingly servicing other markets. The shale gas supplies from the Marcellus alone equal the entire natural gas export capacity of Qatar, the world’s second largest natural gas exporter in 2012. New natural gas production is also backing out traditional Canadian pipeline imports to the United States, which has in turn spurred plans for several LNG export projects from Canada. This surge in production is a positive development for global gas consumers because the anticipation of extra supplies has given previously captive natural gas buyers additional leverage in negotiations for long-term gas supply contracts.”

Pursuing U.S. LNG exports can help foster our broader foreign policy goals. LNG exports are consistent with a long-standing U.S. energy and trade policies of promoting freer markets and a diversity of supply, which in turn will help make energy markets more competitive, diverse, and stable.

The hearing was webcast and can be accessed by following this link: http://bit.ly/R3r0yT.