Increase in Natural Gas Exports Will Boost Jobs, Supporters Say

Legislation designed to streamline the government’s review of natural gas export applications would boost sales and create thousands of jobs in the process, supporters say. But opponents argue that the measure would also increase home heating costs to average Americans, and hurt U.S. manufacturers.

That was the gist of the debate Thursday at a hearing held by the Senate Committee on Energy and Natural Resources.

The bipartisan bill, sponsored by Sens. John Barrasso (R-Wyo.) and Martin Heinrich (D-N.M.), would require the Department of Energy to speed up its review of liquefied natural gas (LNG) export applications, and make it easier for the industry to sell gas to countries that do not have free-trade agreements with the U.S.

Specifically, the DOE would have to issue a decision on applications no more than 45 days after the publication of the request’s environmental review documents. Streamlining the process would allow the natural gas industry to build more processing and exporting facilities, hire more workers, and increase sales overseas. Currently, U.S. companies may sell natural gas to 20 countries without going through the Department of Energy’s “public interest analysis” that sales to non-free trade nations must navigate.

“This bill will give investors the confidence that export projects will be permitted and built, and increase jobs all over the United States,” Barrasso said at the start of the hearing. Industry estimates peg the potential number of jobs created by increased exports at about 650,000.

In touting the bill’s potential benefits to U.S. allies as well, Barrasso took a swipe at Russia, whose relationship with the U.S. has become strained, to say the least, over the last two years, especially over its support of rebels in Ukraine’s civil war.

“The [bill] will also help increase the energy security of our key allies and partners in Europe and Asia,” Barrasso said, “and provide an alternative source of energy to countries which Russia has ruthlessly exploited.”

Opponents conceded that the bill’s passage would likely lead to more American jobs. But by focusing on natural gas production and distribution here at home, they said, the industry could help create eight times the number of jobs.

“We should be using our natural gas to increase American manufacturing output and jobs,” said Sen. Debbie Stabenow (D-Mich.).

Helping the U.S. manufacturing sector, which has steadily declined over the last three decades due largely to a rise in cheaper imports, would be a boon to the American economy, Stabenow said — one that would have a bigger, and more sustained, impact than the construction of export facilities.

Conversely, she said, exporting to countries like China could drive up prices globally, including here at home. That’s not only because the pool of buyers, and therefore demand, would grow, but also because LNG suppliers, aware of Beijing’s willingness to help Chinese firms cover energy costs, know they could charge more there, she said.

Higher Prices Feared

While Stabenow was frustrated with the legislation, Sen. Al Franken (D-Minn.) was downright peeved by it. In remarks that were at times caustic, and occasionally even petulant, Franken made a more provincial argument against the legislation.

“It’s going to raise the price of natural gas on every Minnesotan and on every Minnesota manufacturer,” he said flatly.

Franken then asked one of the hearing’s five witnesses, American Natural Gas Alliance President Martin J. Durbin, who supports the bill, if he knew how much natural gas was produced in Minnesota.

“I’m not aware of natural gas production in Minnesota, senator,” Durbin responded.

Franken, though, was already answering his own question, making an “O” with his thumb and fingers.

“Zero,” he said. “This does my state no good whatsoever.”

Franken then went on to chastise supporters of the bill for “penalizing” those who, he says, helped facilitate the recent boom in natural gas production.

“I’ve been saying this over and over again — this whole natural gas renaissance is due to research done by the Department of Energy,” he said. “And who paid for that research? The American taxpayer. And that includes the Minnesotan taxpayer. And we’re going to thank them by raising prices.”

In response to another question from Franken, Durbin agreed that natural gas companies, including members of the alliance he heads, would benefit from an increase in exports. But he took issue with Franken’s contention that Minnesotans haven’t benefited from the recent discoveries of natural gas and subsequent spike in production.

“The entire nation is benefiting from this, including Minnesota,” he said, noting the dramatic decline in natural gas prices over the last few years. “If we didn’t have the natural gas revolution we’ve had … you wouldn’t have manufacturers in Minnesota able to take advantage of that.”

Durbin began to speak to another point of Franken’s — that of the Department of Energy’s role in natural gas research — but the senator quickly cut him off.

“I only have a little bit of time here, sir,” Franken said, before speaking for another two minutes on the topic.

At one point after going over his allotted five minutes for remarks, Franken referred to an earlier quip by West Virginia Republican Sen. Shelley Moore Capito, who was sworn in last month after moving from the House of Representatives to the Senate. In November, the former congresswoman won the seat vacated by now-retired Sen. Jay Rockefeller (D-W.Va.).

Earlier in the hearing, Capito was about to ask a question of one of the witnesses when she realized the light that lets senators know their five minutes are up had turned red.

“Oh, well, I see my time is up. As a former House member, I learned to stop when the red thing came on,” she said before adding half-jokingly, “I’ll learn to talk through it eventually.”

The remark drew laughs from her colleagues and others in the room. Members of Congress are notorious for their propensity to “talk through” the red light long after it has gone off.

When Franken’s red light came on, he acknowledged it but continued talking for another minute, and made what sounded to some like a dig at his new colleague from across the aisle.

“I know my time is up but I’ve been here a little longer than Ms. Capito,” he said, mispronouncing her name in the process. Franken was elected to a second term last year. The mis-pronouncement did not appear to be intentional, but his mention of Capito did seem laced with the same acerbic tone that characterized his remarks and belied his frustration with the legislation.

Opposition Challenged

In response to Franken’s points about potentially higher natural gas prices, Barrasso pointed out that three studies — all performed by the Obama administration, which opposes the bill — have found that natural gas prices for consumers “will remain low,” even with an increase in exports.

Sen. Bill Cassidy (R-La.) also took time to counter Franken’s assertions, saying that some Minnesota businesses have, in fact, directly benefited from the increase in natural gas production.

“I’ve been handed an article here that [says] Minnesota produces much of the frack sand used [in the process to extract] the gas,” Cassidy said. “So the benefits even go to Minnesota … which is good.”

In his remarks to the committee, Durbin pointed out several ways that increased exports would benefit the U.S. economy.

“Expanding demand for U.S. natural gas in international markets … will result in increased investment, enhanced GDP growth, rising incomes, and more jobs — just as the case has been with increasing exports in other U.S. industries,” Durbin said. “Moreover, LNG exports will expand global natural gas markets, enhancing U.S. influence to encourage transparency, fair market rules, and strengthen relationships with our allies.

Concerns that the U.S. manufacturing sector would be lost in the race to expand overseas markets are unfounded, he said, an opinion shared by Republican and Democratic supporters of the legislation. With the abundance of natural gas at the nation’s disposal, increasing exports and meeting the needs of domestic businesses can be given equal priority, supporters say.

But Christopher Smith, assistant secretary of energy for fossil energy, said the bill is not needed because the DOE already has taken a number of steps to streamline and expedite its regulatory reviews.

“The department has clearly demonstrated a commitment to act expeditiously … and as such, we do not believe that [the bill’s] decision-making timeline is necessary to ensure efficient and responsible action by the DOE,” Smith said. “While we understand that the intent is to add greater regulatory assurance to applicants for LNG exports — and the department shares the goals of transparency and certainty of process — we do not believe that is necessary to meet these goals.”

But he conceded that the review process under the bill’s expedited timeline would be “workable” with current DOE resources.

The House passed a similar bill last week, and while it’s not clear when the Senate might take up its version, Murkowski predicted it would pass the committee and come up for a full Senate vote sometime this spring or summer.