USA: Subcommittee Examines Barriers to LNG Exports

The Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), continued its look into opportunities to expand U.S. energy exports with a hearing focused on regulatory, market, and legal barriers to the export of American coal and natural gas.

America is entering a new age of energy abundance thanks to technological innovations and is now poised to become a leading global energy supplier. However, regulatory hurdles, outdated policies, and litigious environmental activists are preventing important energy export opportunities that could help create jobs, strengthen the economy, and improve America’s trade balance.

“The reality is that market forces will determine the amount and to what extent we export our energy from the U.S. Policies that delay or prevent energy exports are detrimental to energy producing states like Kentucky, and they hurt the nation as a whole,” said Whitfield. “Instead of arbitrary and irrational barriers placed on U.S. exports by the federal government, the U.S. can be a global energy leader by exporting affordable and reliable energy to poverty stricken countries that would otherwise have no electricity. I have concerns that the approval process for these export projects is not a balanced one as it clearly should be, especially in light of the opportunities before us.”

The panel heard from government and industry witnesses about a range of barriers and obstacles present for the export of coal and Liquefied Natural Gas (LNG), including Department of Energy delays in approving new LNG export licenses, LNG infrastructure permitting delays at the Federal Energy Regulatory Commission, and delayed permitting of new coal export facilities resulting from red tape and litigation stemming from the National Environmental Policy Act.

Christopher Smith, Acting Assistant Secretary for Fossil Energy at DOE, gave an overview of the agency’s licensing review process for approving LNG licenses to countries that do not have a Free Trade Agreement as required by the Natural Gas Act. Currently, DOE has approved two such licenses but 18 more applications remain pending at the department. Smith said DOE is evaluating each license on a “case-by-case basis” to determine if it is in the public interest. Referencing a study commissioned by DOE, Smith asserted that LNG exports were found to be overall “beneficial to the U.S. economy.”

Lucian Pugliaresi, President of the Energy Policy Research Foundation, explained how DOE’s “slow and uncertain regulatory approval process” could have unintended economic consequences, stating, “In an attempt to carefully evaluate petitioners concerns that LNG exports do not harm the public interest, the slow approval process may actually harm economic growth by creating opportunities for more costly supplies from competitors to gain access to markets that would have been available to U.S. producers.”

“The private sector has made rapid progress in unlocking our energy abundance. What the American people now need is a regulatory process that can keep up with this evolving energy landscape,” said full committee Chairman Fred Upton (R-MI).