Russia-China gas deal fuels U.S. export push

Lawmakers who want the United States to export more natural gas called a 30-year, $400 billion deal for China to buy energy from Russia’s state-owned gas supplier a wake up call for Washington.

Sen. John Hoeven (R-N.D.) said he worried the deal would strengthen Russia amid the crisis in Ukraine and urged his colleagues to approve more gas exports from the U.S.

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“This gives Russia another option. It strengthens their hand vis-à-vis what they decide to do in Eastern Europe,” Hoeven said. “And it makes it even more imperative that we advance our legislation to allow exports of LNG (liquefied natural gas) to Europe so that they have alternative sources.”

The deal inked this week provided Russia with an economic lifeline and raised fears Moscow could cut off gas supplies to its neighbors to strong-arm them into supporting Putin’s policies.

Hoeven and other lawmakers, though, say the only response is for the U.S. to boost its own LNG exports, which they say would weaken Russia’s energy influence while helping American allies.

China’s deal with Russian-firm Gazprom is only helping them make the case, they say.

Hoeven said the Gazprom agreement shows more than ever that exports from the United States would hurt Russia.

“Clearly, our providing LNG to Europe and working with Europe for them to develop other sources of energy supply weakens Putin’s hand,” he said.

Rep. Cory Gardner (R-Colo.) said the Russia-China agreement shows that the United States needs to export gas to remain competitive economically.

“As the United States buries our energy development in bureaucracy, the world is moving beyond us,” Gardner warned. “So I think it’s just one more sign that we have to move forward in as expeditious a fashion as possible to remain competitive at the global level and to give our allies an additional option.”

Gardner has sponsored legislation to speed up the process for approving permits for LNG export terminals, a plan that has earned nearly unanimous Republican support and backing from some Democrats as well.

The Department of Energy (DOE) must review every application to export LNG to countries with which the United States does not have a free trade agreement.

Gardner’s bill would streamline the process and set a timeline.

In the contiguous United States, LNG exports only go to Canada and Mexico. Seven overseas export facilities have attained DOE’s conditional approval, and a Louisiana facility could export gas by 2016.

Sen. Mark Udall (D-Colo.), whom Gardner is challenging in the 2014 midterms, has also introduced a similar bill. His office said Russia’s mammoth gas deal provided a new urgency to pass LNG legislation.

“This underscores why Sen. Udall has been saying Colorado and our nation's natural gas resources need to be exported — and why the Department of Energy must fast-track its approval of LNG terminals,” Udall spokesman Alex McCarthy said.

Colorado is the fourth largest producer of natural gas in the U.S.

But environmental groups such as the Sierra Club and 350.org have opposed exporting LNG.

They say it would increase the demand for hydraulic fracturing, or fracking, a controversial drilling practice they say is harmful to groundwater.

Both groups have urged the Obama administration to weigh heavily the effects of increase fracking in review export applications.

America’s Natural Gas Alliance (ANGA) supports expanding exports and the group’s president, Marty Durbin, said LNG would be a useful tool for U.S. diplomacy.

“Russia has an enormous resource in energy. They always have,” Durbin said. “And they’re going to continue to use it both to their economic benefit and their strategic benefit, and it would be short-sighted of the U.S. not to do the same.”

Sen. Lisa Murkowski (Alaska), the top Republican on the Energy and Natural Resources Committee, agreed.

The U.S. has become the largest producer of natural gas in recent years, and that’s already showing international implications, said Robert Dillion, a spokesman for Murkowski.

“It also shows the geopolitical impact of increased U.S. natural gas production,” said Dillion. “Russia is diversifying, looking for new markets as resistance to reliance on Russian gas grows in Europe.”