Eliminate Natural Gas Export Restrictions, Foreign Emissaries Tell Lawmakers
Should the U.S. government lift burdensome regulatory and legal barriers for domestic liquefied natural gas (LNG) exportation, countries across the globe will purchase U.S. LNG in large quantities, foreign diplomats and lawmakers told a House Energy and Commerce Subcommittee on Energy and Power forum held on Oct. 10. Although pending Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership (TTIP) trade pacts could potentially foster LNG trade, U.S. lawmakers should seek alternate methods of breaking down LNG export barriers due to uncertainty surrounding the negotiations, the emissaries said.
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“With the ratification process, I can see at the earliest the date for the TTIP to enter into force is 2018, if everything goes well. On LNG exports, "we can get something earlier,” said Jaroslav Zajicek, deputy chief of mission at the Embassy of the Czech Republic in Washington D.C. “Don’t wait for those negotiations to finish because it will take time. It’s a welcome process. It’s the most historic process because it will create the best trading bloc in the world, I would say, but…we have to do it now. The clock is ticking.”
The regulatory and legal concerns voiced by members of the subcommittee focus largely on the Department of Energy review and licensing procedures for non-free trade agreement (FTA) countries (here). Under the law, U.S. companies are able to export LNG to FTA countries with many fewer restrictions, said an Energy and Commerce press secretary. The Department of Energy says the review and licensing procedures ensure public interest is met. FTA countries Singapore and South Korea sent delegations to the Oct. 10 forum. The other countries represented at the forum included Czech Republic, Hungary, Haiti, India, Lithuania, Japan, Thailand, and the Commonwealth of Puerto Rico. The TPP and TTIP pacts would add FTA countries in the Pacific region and the European Union.
“This is one of those strange issues in exports when we find ourselves being our own impediment,” said Congressman Mike Turner, R-Ohio, who is not a member of the subcommittee but was invited to the forum because he is an outspoken leader on the issue, according to the committee press secretary. “Usually when there is an export-import issue you’re turning to the country that you want to export to, asking them to lower their barriers,” he added. “This is one where we’re having to look inward to ourselves to lower our own barrier.”
Turner introduced the Expedited LNG for American Allies Act in February, a bill that the congressman said would break down that review and licensing barrier (see 13020714). The foreign officials declined to comment precisely on the amount of time it would take to actually begin LNG trade following U.S. legal changes to the review and licensing process, with the exception of Japan, whose representative said the country could not import U.S. LNG until 2017. The Department of Energy has recently approved four LNG export projects for non-FTA countries so far, said subcommittee Chairman Ed Whitfield, R-Ky., adding that 21 applications for non-FTA export are pending.
“Boosting LNG exports in the U.S. would have many positive effects on both the United States and Indian economies,” said Taranjit Singh Sandhu, deputy chief of mission at the Indian Embassy in Washington D.C. “For the United States, it would create thousands of U.S. jobs and expand the revenue stream for the U.S. government. For India, it would provide a steady, reliable supply of clean energy and help diversify our imports from our traditional suppliers.” Congressman Turner noted the Expedited LNG for American Allies Act targets India as a prospective LNG export partner.
Proven LNG reserves in the U.S. started to grow sharply in the mid-2000s due to technological advances, the Department of Energy said (here). The U.S. market price will be competitive on the global market, said the diplomats. “It’s very easy to look at the map of the prices. The LNG price right now for a million BTUs is around $3, $3.20. The price in Europe, in U.K. or Belgium, is around $10,” said Zajicek. “Even if you take into account the current technology of liquefaction transport and degasifications, it comes to $5, five or six dollars. This makes it very competitive even on European territory…so big export opportunities for U.S. companies.”