Debate Over LNG and Coal Exports Continues in House Committee
Increased coal and liquefied natural gas exports were portrayed as both a threat to the environment and sustainable U.S. prosperity, and a huge economic opportunity the U.S. must seize now, at a June 18 House Energy and Commerce Subcommittee hearing on energy export barriers. The U.S. has the potential to become the “preeminent supplier” of energy, and “help take the power back from [Organization of the Petroleum Exporting Countries],” said Committee Chairman Fred Upton, R-Mich. “All that’s missing is the additional infrastructure to make additional exports possible.” Part of the hearing, held by the Energy and Power Subcommittee, focused on barriers to liquefied natural gas exports: the Department of Energy has only granted two permits to export LNG to countries the U.S. does not have a free trade agreement with. There are 20 permits to export LNG to non-FTA countries pending.
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DOE is continuing to process the pending applications on a “case-by-case basis,” following an order of precedence determined by the Department, said DOE Principal Deputy Assistant Secretary Christopher Smith (read his written testimony here). Pending DOE applications that received approval from the Federal Energy Regulatory Commission by Dec. 5, 2012 will be reviewed first; then pending DOE applications without FERC approval, and finally future DOE applications.
President of the trade group Center for Liquefied Natural Gas, however, argued in his testimony that DOE’s order of precedence is illegal. It was created as an amendment to the federal regulations governing DOE, and should therefore be subject to the “same notice and comment requirements as the original rules,” said Bill Cooper in his written testimony (here). “Notice of the queue was not published in the Federal Register with an opportunity for the public to comment. The failure to provide notice and comment renders the queue void.”
Lawmakers and industry have taken issue with DOE’s LNG approval process before. In an April House Committee hearing, stakeholders argued continued restrictions on LNG exports could put the U.S. at risk of World Trade Organization sanctions (see 13042614). Another House hearing in March also debated DOE’s licensing policy (see 13032013).
Coal Exports Depicted as Stark Choice Between Sustainability, Prosperity
Coal industry representatives at the hearing said barriers to increasing coal exports come not from any federal queue, but instead burdensome environmental regulations threatening to derail export projects. The “cumulative, programmatic” environmental reviews groups are pushing for in the three coal expansion projects discussed at the hearing -- in Oregon and Washington -- would be “contrary to the law and would create a very dangerous precedent that could be used to block exports,” said Ross Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers, in written testimony (here). “The agencies involved could be laying the foundation for similar exercises for virtually every infrastructure project within the United States that would transport and export cargo of any kind.”
Seattle Mayor Mike McGinn, however, argued that such a review is necessary to evaluate all the potentials with the coal projects. He said Seattle residents were deeply concerned and engaged in the issue of expanded coal processing facilities there (read his written testimony here). The projects will increase traffic, harming local residents, business and tribal lands, and create more health risks. The projects are not small, either. Terminals at Cherry Point and Longview could export 110 million tons of coal each year, equivalent to the gas burned by everyone on the entire western seaboard plus Colorado, Montana, Idaho, Alaska, Nevada, New Mexico, Arizona and most of Texas, McGinn said.
Increasing coal exports would also be an “abrupt” departure for states like Washington, which have staked their claim on clean energy, said KC Golden, policy director at nonprofit group Climate Solutions, in written testimony (here). The biggest danger with increasing exports -- and building the accompanying infrastructure to do so -- is “economic lock-in,” Golden said. Companies could invest huge sums to “long-lived energy infrastructure that makes dangerous climate disruption unavoidable,” he said. Sustainable prosperity and expanded coal infrastructure are “flatly inconsistent,” he said. “And coal export presents us with a stark choice between them. Obscuring this choice is not a responsible course of action.” -- Jessica Arriens