LNG Permitting Certainty and Transparency Act
Floor Speech
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Mr. PALLONE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to this legislation which is simply unnecessary. The Department of Energy currently conducts a public interest review of all applications to export liquefied natural gas to a country without a free trade agreement with the United States.
To date, DOE has approved four such applications to export LNG and has issued conditional approvals to four additional applications. DOE has approved all applications that have completed their required NEPA review, and so there is no backlog or delay at the DOE to speak of.
With these permits alone, we have the ability to become one of the largest exporters of natural gas in the world, and so legislation to impose an arbitrary 30-day deadline on DOE, as suggested by the underlying bill, is simply unnecessary.
With regard to exporting natural gas, we should keep in mind that low domestic natural gas prices can provide an important competitive advantage to U.S. manufacturing, and simple economics tells us that additional demand due to unrestricted exports can raise domestic natural gas prices, so we should think twice about giving away this advantage for short-term export profits when we are trying hard to rebuild our long-term manufacturing base.
We should also remember that the bill will not result in LNG exports to Europe for some time, if at all. Although one LNG export terminal is set to begin full operation later this year, all other terminals remain under construction or are in the planning process.
DOE's conditional approval for those facilities allows them to continue moving forward, but this legislation won't help speed up their construction or affect how quickly they can actually operate, so passing this bill today will not magically send LNG from the proposed terminals tomorrow.
When the United States actually begins to export significant quantities of LNG, it will most likely go to Asia, not Europe. The export terminals most likely to get constructed have already signed long-term contracts to supply LNG to various customers, and those destinations are primarily in Asia.
Mr. Speaker, I oppose this bill because I don't believe the phantom LNG export backlog is one of the pressing issues facing ordinary Americans, and I don't believe that expediting this type of infrastructure is what our country needs most.
I believe our country should be encouraging the use of renewable energy resources like wind and solar power. We should be investing in increased energy efficiency and a smart grid. We should be trying to find ways to make our energy infrastructure more resilient and capable of withstanding extreme weather events, like Hurricane Sandy.
These are the types of clean energy solutions that America should be investing in, the type that will enhance our energy security, reduce carbon emissions, and lower overall energy costs to customers.
Unfortunately, this bill doesn't achieve any of these goals. In fact, the 30-day deadline in the bill could have counterproductive results. If DOE is forced to make a decision before they have determined if the project is in the public interest, it may have no choice but to deny the application, and that outcome certainly doesn't benefit anyone, especially the applicants.
This is the third time this month that the Republican majority has brought secondhand energy legislation to the floor, legislation that passed the House last Congress. Like the two bills before it, H.R. 351 would also serve no real purpose.
I just hope that we can begin soon to look at new energy legislation that will move America forward in developing a clean energy infrastructure. In the meantime, I would urge my colleagues to vote against this bill, and I reserve the balance of my time.
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Mr. PALLONE. Mr. Speaker, I yield myself such time as I may consume.
I have heard my colleagues suggest that there is a delay in the DOE's approval of LNG export applications.
For instance, on Monday night at the Rules Committee, Mr. Johnson indicated that the DOE has approved only five out of 38 applications since 2010. Even if the gentleman from Ohio is correct in his assertion, the fact is that the five applications approved by the Obama administration since 2010 are five more than were approved by the Reagan administration or by either Bush administration. In fact, it is five more than were approved by the Clinton, Carter, Ford, or Nixon administration. In 2011, the DOE approved the first LNG export application for the Cheniere Sabine Pass facility. That facility is set to become operational at the end of this year. That was the DOE's first approval to export LNG since the 1960s.
The dramatic growth of natural gas production and supply in the United States was considered impossible a decade ago, so the DOE commissioned a study to help it decide how to address additional applications. After establishing a transparent and systematic system for reviewing and authorizing LNG export applications, the DOE began to rapidly issue decisions. The record demonstrates that the DOE has moved aggressively to authorize LNG exports, granting three additional final authorizations and four conditional approvals since August of 2013.
To date, the DOE has approved the export of enough LNG to make the United States the world leader in LNG exports. All other pending applications are still under review at FERC, not at the DOE, so it is important to understand that this bill does not change the FERC review process--the site approvals, the environmental approvals. I would also remind my colleagues that the DOE automatically deems LNG exports to free trade agreement countries to be in the public interest.
Before the DOE can issue a decision on the pending applications, both FERC approval and construction will need to be completed. That could take months or, more likely, years, but this bill will not affect that timeline, which will be the critical factor in how much more gas can be exported. That is why I want to emphasize that this bill is unnecessary and will not materially change the LNG export situation anytime soon.
I reserve the balance of my time.
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Mr. PALLONE. Mr. Speaker, I yield myself such time as I may consume.
Under the current approval process for LNG exports, the Department of Energy has a tool to protect American consumers, and that tool is the public interest determination. The DOE has the ability to weigh the benefits and costs of additional LNG exports, including the impact of increased domestic natural gas prices on consumers, who use gas to heat and cool their homes and to turn on the lights. Rigid deadlines, as suggested in this legislation, could prevent the DOE from conducting a meaningful public interest review, and that means that the DOE might not be able to ensure that high levels of LNG exports do not harm American consumers by raising the costs of electricity or home heating or cooling.
I think consumers, Mr. Speaker, have reason to be concerned. Experts at the nonpartisan U.S. Energy Information Administration examined this issue, and here is what they found:
In the scenarios with additional gas exports, consumers will consume less and pay more on both their natural gas and electricity bills.
Furthermore, the EIA calculated that high levels of LNG exports could mean increased residential, commercial, and industrial consumer energy costs of $7 billion to $14 billion per year between 2020 and 2040.
Make no mistake. American consumers will foot that bill. Recent experience with gasoline and propane exports also offers cautionary tales. The Midwest and Northeast experienced sharp propane price spikes and shortages last winter. Significant increases in propane exports were a key factor in the skyrocketing prices that hurt consumers.
Just yesterday, the Center for American Progress released an analysis on the potential impact of expanded
LNG exports on consumers. They found that, in 2020, residential consumers would pay 4.3 percent more for natural gas per year, and those in the Midwest--in States like Arkansas, Louisiana, and Texas--would be the hardest hit by price increases. By 2040, consumers in the mid-Atlantic States would pay 10 percent more for natural gas per year.
These figures are not insignificant. We need to make sure that LNG exports do not hurt consumers. Right now, the DOE has the ability to do that. So, before we disregard any meaningful public interest review and allow the unrestricted exporting of LNG, let's be sure that our constituents won't be left footing the bill.
I reserve the balance of my time.
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Mr. PALLONE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, in closing, as the ranking member of the Energy and Commerce Committee, I am committed to developing sound energy policy, and that policy surely includes consideration of the role that natural gas can play in our energy mix.
Our energy picture is changing every year. The latest development is low oil prices, but we have other developments in recent years, including rapidly increasing domestic production of oil and natural gas and a welcomed increase in wind and solar electricity production.
We are becoming more efficient, but our energy infrastructure is becoming outdated. We need to look at the ways we produce and use energy, but we also need to look at the ways that we move, transmit, and store energy.
We need to innovate in the energy space, but we also need to maintain reliability and lower energy bills. We need to look at all our energy issues through the lens of climate change and public health.
Mr. Speaker, I think there are legitimate questions about whether we want to send our natural gas to other countries. That might help our trade balance, but it would have negative impacts on our domestic manufacturing sector.
I don't claim that I have all the answers. I know that we looked at some of these issues last Congress, but I don't agree that a clear consensus emerged. In any event, this is a new
Congress with scores of new Members who have never looked at this issue before.
I think we should take these issues back to the Energy and Commerce Committee and let the committee and its 12 new members do its job. Let us look at the facts again as they are today, not last year or last Congress. I think if we were to do that, we would see that even if this legislation was once necessary, it isn't anymore.
DOE has modernized its process and any backlog that once existed isn't an issue at this point. DOE and the administration have opened the way for LNG exports, but I think it continues to be necessary for us to assess whether approving an application for additional export is in the public interest because becoming the world's largest exporter of natural gas is not something we should do lightly, unadvisedly, or without the latest facts.
This January, we have spent much of our time bringing bills from last Congress to the floor and rushing them through to the Senate, which is still considering the Keystone legislation we passed the first week of this year.
I think we might well have served ourselves and the American people better by sitting down together in the Energy and Commerce Committee and working carefully on an energy policy aimed at the future rather than at an energy policy aimed at the past.
I am going to vote ``no'' on this legislation, and I encourage my colleagues to oppose it as well.
I yield back the balance of my time.
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