Senators get mixed advice on gas exports

 

Senators received a mix bag of advice from administration officials and energy experts on whether giving the green light to natural gas exports would send an effective message to Russia, following Moscow's annexation of Crimea.

While the Senate Energy and Natural Resources Committee hearing was intended to focus on job creation through boosting natural gas exports, it inevitably moved on to Ukraine and the potential for exports to loosen Russia's grip on the surrounding region.

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The debate came down to a question asked by Sen. Lisa Murkowski (R-Alaska) on "how significant a signal" would be sent through accelerated permitting by the Energy Department, "as opposed to actual gas" sent overseas.

"I have said it is about the signal that is sent, and about the U.S. role, our leadership role from the geopolitical perspective that is as instrumental as anything," Murkowski added.

The chief of the Energy Department's statistics shop, Adam Sieminski, said the approval of export facilities like Sabine Pass in Louisiana, the one terminal in the U.S. out of seven approved facilities that is closest to exporting natural gas, has already had an impact on other contracts.

"Companies have indicated that they feel they have had more successful opportunities to negotiate with larger gas suppliers for better contract terms than they would have had, had the facility in Louisiana not already been under construction," Sieminski said.

One energy and national security expert went so far as to say fast-tracked approval of natural gas exports would not help at home or abroad, but instead "embolden Russia."

"Since U.S. exports of oil and natural gas would have no impact on Russia's market position in the short to medium term, there is a danger that inflating the rhetoric on exports would actuarially embolden Russia, which will recognize this as an empty threat, to act even more recklessly," said Edward Chow, senior fellow at the Center for Strategic and International Studies.

Another witness from the Brookings Institution disagreed, calling claims that U.S. natural gas exports would go only to higher-priced markets in Asia, "simplistic."

Lithuanian Energy Minister Jaroslav Neverovic urged the lawmakers to act if President Obama doesn't use his authority to approve all applications for natural gas exports to non-Free Trade Agreement countries.

"It is an absolutely important signal you can send," Neverovic said. "Any signal which is sent to the market ... could help Europe's position be much stronger, and we don't have to attach ourselves to long-term agreements knowing there would be gas in the market."

In her first hearing as chairwoman of the Senate Energy Committee, Sen. Mary Landrieu (D-La.) voiced her support for exports to Ukraine, adding that she hopes the Senate can find a way forward for proposed bills seeking to expedite approvals.

But she drew a line in the sand on how far she would push the issue as head of the committee.

"While there is a lot of criticism going around from one side to the administration, I would like to go on record saying for my colleagues, and this is not Sen. Murkowski, but others on the Republican side: Put your money where your mouth is," Landrieu said.

"You want to help? Then let's step up with some initiative and funding for Ukraine and not just blame somebody else just because permits are moving slowly."