Action on Many Fronts

The crisis in Ukraine has led representatives and senators of both political parties to consider what the United States could do to increase security throughout the region.

One specific idea that seems to be at the top of many lists is for the United States to expedite the process whereby the U.S. Department of Energy grants licenses for the export of natural gas as a commodity.

Under current law, liquified natural gas (LNG) exports are automatically deemed in the “public interest” if the gas is destined to nations with which America has a free trade agreement (FTA) that includes natural gas. Exports to non-FTA nations (such as Ukraine and the rest of Europe) are now subject to exhaustive individual public interest examinations that are costly and time consuming.

The Obama administration could unilaterally speed up the non-FTA LNG application process. If that does not occur, Congress could enact legislation to change the status quo and is considering doing so.

Given the sudden heightened interest in the LNG export issue, we anticipate providing a brief report to you every day or two for the remainder of this week (at least).

Ukraine Package Could Include LNG “Policy Statement”

As you know, the House of Representatives passed a bill to provide emergency assistance in the form of loan guarantees to Ukraine on March 6. The bill, limited only to that single issue, did not include an LNG provision.

Attention turns to the Senate, as the Foreign Relations Committee is scheduled to consider the Ukrainian assistance package at a committee markup today. Sen. John Barrasso (R-WY) has announced his intent to offer a slightly expanded version of S. 192, the “Expedited LNG for America’s Allies Act” (to include Ukraine), as an amendment to the bill and in a news release, Barrasso said that his amendment “will focus on allowing the United States to export liquefied natural gas (LNG) to Ukraine and members of the North Atlantic Treaty Organization.”

This morning’s issue of Environment and Energy Daily (E&E Publishing) quotes Sen. Bob Corker (R-TN) the Ranking Republican on Foreign Relations as saying that the Senate Ukraine aid package will likely include a “policy statement” with regard to LNG. Corker said, “[actually] dealing with [the LNG issue] is a lot more complicated—I think people understand that—than just passing a bill in a few days on Ukraine… There are WTO issues that need to be dealt with and others…But I’m certainly supportive of us having an LNG policy that supports our other efforts.”

V-4 Ambassadors Write to Congressional Leaders

Ambassadors from Hungary, Poland, Slovakia and the Czech Republic (members of the Visegrád Group, or V-4 for short) sent a joint letter to House and Senate leaders on March 6 that was widely discussed on Capitol Hill and in the news media. A key portion from the letter was quoted in Sen. Barrosso’s press release and reads as follows:

“Gas-to-gas competition in our region is a vital aspect of national security and a key U.S. interest in the region. It is for this reason that we now ask for your support…The presence of US natural gas would be much welcome in Central and Eastern Europe, and Congressional action to expedite LNG exports to America’s allies would come at a critically important time for the region. Energy security is not only a day-to-day issue for millions of citizens in our region, but it is one of the most important security challenges that America’s allies face in Central and Eastern Europe today. ”

LNG Bill Introduced in House

H.R. 6, the “Domestic Prosperity and Global Freedom Act,” was introduced on March 6, by Rep. Cory Gardner (R-CO) and 23 of his House colleagues. This bill would require DOE to grant LNG export licenses to World Trade Organization (WTO) member nations on the same expedited basis as is currently provided to FTA-agreement countries. As of Monday (March 10), the bill had attracted 29 cosponsors.

Upon introduction, H.R. 6 was referred to the Energy and Commerce Committee. Full committee chair Rep. Fred Upton (R-MI), Energy and Power Subcommittee chair Rep. Ed Whitfield (R-KY), and Rep. Mike Turner, (R-OH) the primary House sponsor of the “Expedited LNG for America’s Allies Act” (H.R. 580) and the “American Job Creation and Strategic Alliances LNG Act” (H.R. 4139) are among the original cosponsors. Note: Very low bill numbers, such as H.R. 6 are not assigned randomly but are reserved for the use of the leadership. Assignment of this number is a signal that the bill is a priority for House Speaker John Boehner (R-OH).

Senate Democrats Introduce “Polar Opposite” Bills

Two major LNG bills were introduced in the United States Senate last week:

  • S. 2083 was introduced on March 5, by Sens. Mark Udall (D-CO) and Mark Begich (D-AK). It was referred to the Senate Committee on Banking, Housing, and Urban Affairs.
  • S. 2088 was introduced by Sen. Edward Markey (D-MA) on March 6. Markey’s bill has no cosponsors and was also referred to the Banking Committee.

The Udall-Begich bill is very similar to H.R. 6, which is described above. It would expedite applications for LNG export licenses to WTO nations.

The Markey bill, on the other hand, would not expedite, but rather slow such applications even further. In a news release, Markey, who chairs the Foreign Relations subcommittee with jurisdiction over international energy security, said that he “opposes efforts to expedite new natural gas exports, the calls for which have increased during the crisis in Ukraine.”

There are some important political dynamics to note here. Both Sens. Udall and Begich are up for re-election in November and the races are expected to be close. Begich, a former mayor of Anchorage, is serving his first term in a very “red” (Republican) state. Mark Udall, also in his first term, hails from a “toss up” state, but his likely opponent in the November election is Republican Rep. Cory Gardner. The races in Colorado and Alaska are among the handful that could determine Senate control in 2015 and beyond.

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