Natural gas fight is key to Keystone vote

The fate of a bipartisan energy efficiency bill and a vote on the Keystone XL pipeline has boiled down to a fight over whether to make it easier to export liquefied natural gas.

Liquefied natural gas exports have taken on new prominence in Congress because of Russia’s threats to stop gas exports to Ukraine and the European Union.

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Republicans argue exporting U.S. natural gas will reduce Russian President Vladimir Putin’s leverage over Europe and bolster Ukraine’s ability to stand up to his pressure. They also argue that it would be good for the U.S. economy.

Democrats, however, argue allowing more exports could raise energy costs in the U.S. and hurt the economy and jobs. 

Sen. Debbie Stabenow (Mich.), the vice chairwoman of the Senate Democratic Policy and Communications Center, is leading the Democratic charge. She argues Sen. John Barrasso’s (R-Wyo.) amendment would increase exports at the expense of manufacturers in Michigan who are benefiting from cheap energy prices.

Republican and Democratic negotiators have been working for more than a week to move energy efficiency legislation, which would also allow a vote on Keystone. Much of the battle has been a procedural fight over how many amendments Republicans will be allowed to offer. 

But members of both parties now say a prospective deal on moving the energy efficiency bill depends on solving the natural gas fight, and what to do with Barrasso’s amendment. 

The amendment would make it possible to export liquefied gas to all members of the World Trade Organization without first filing an application to the Department of Energy. Right now, companies without the Energy Department’s permission may only export natural gas to countries that have free trade deals with the U.S.

Stabenow, Republican negotiators say, is taking the point for Senate Majority Leader Harry Reid (D-Nev.) in trying to find an agreement.

And she is digging in.

“It would throw [exports] open to all [World Trade Organization] countries with no review, like by the Department of Energy, and we know that would impact American jobs, manufacturing, consumer heating prices,” she said Thursday. “Right now, we have an advantage in this country where businesses from other countries are coming here because we have low natural gas prices. It would be foolish to lose that advantage right at the beginning of a real renaissance in American manufacturing.”

The Barrasso amendment would be unlikely to immediately change the international market for natural gas. 

To date, the Department of Energy has conditionally approved natural gas applications for seven facilities to export to non-Free Trade Agreement countries, such as those in Europe, where liquefied natural gas is otherwise restricted. Those seven facilities won't be ready to export until roughly 2018.

It’s unclear whether Barrasso has the votes to move his bill, though Sen. Mary Landrieu (D-La.) said she could back it. 

“There are some of us that aren’t reluctant to vote on it,” she said, when asked about increasing gas exports.

Lawmakers appeared at a stalemate on Thursday, though some Republicans offered hope that Democrats might allow a vote on a version of Barrasso’s bill.

“We are concerned about a number of members who are concerned about the LNG amendment,” said Sen. John Hoeven (R-N.D.). “If there a version of that Barrasso bill that we could seek and if we could break through on that one then we might actually get to something.”

“We had a meeting this morning with a number of members from both sides of the aisle to see if there was some middle ground on [liquefied natural gas] exports that could enable us to crack through,” he continued. “If we could balance with some members there like Debbie Stabenow, we might have a shot to still get to a deal.”

Hoeven indicated that one path might be to strip down some of the language in Barrasso's natural gas amendment to mirror Sen. Mark Udall's (D-Colo.) legislation on exports.

A senior GOP aide pushed back on the negotiators’ claims that the energy efficiency bill could advance once agreement is reached on scheduling natural gas amendments.

The aide said that, as of Thursday evening, Senate Democrats had not yet agreed to vote on an amendment sponsored by Sens. Joe Manchin (D-W.Va.) and Hoeven that would effectively block the Obama administration’s proposal to limit carbon emissions from new power plants.  

A senior Democratic aide said Reid could reach a deal with the bill’s sponsors to allow votes on several Republican amendments, but the process would have to be negotiated in advance so Republicans don’t flood the floor with amendments designed to fuel 30-second attack ads.

Reid has said throughout the week that the bill might die on the floor because Republicans keep changing their conditions for allowing it to reach a final vote. 

Senate Republican Leader Mitch McConnell (Ky.) said Reid cannot expect the bill to advance if he doesn’t allow Republicans free hand to pick at least five amendments to offer.

The GOP aide insisted Reid would not agree to votes on other amendments if Republicans drop their demand to vote on Barrasso’s natural gas measure.

Sen. Rob Portman (R-Ohio), one of the underlying energy efficiency bill’s core sponsors, said he met with Shaheen on Thursday to talk about the next steps, focusing on which amendments would be allowed.

 “We're continuing to work with members on their concerns about amendments,” Portman said.

While little was resolved going into the weekend, Portman said agreements on amendments could be made all within a day, wrapping everything up in time for a possible vote Monday on ending debate on the measure.

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