LNG exports dominate Senate committee hearing on US gas potential

Liquefied natural gas exports quickly took center stage at a June 19 US Senate Energy and Natural Resources Committee hearing to examine “how to harness a game-changing resource for export, domestic consumption, and transportation fuel.”

Members and witnesses focused on the topic hours after the Federal Energy Regulatory Commission announced it had approved Cameron LNG LLC’s plan to liquefy and export gas from its existing import terminal in Hackberry, La. (OGJ Online, June 19, 2014)

“We now have the opportunity to turn what would have been natural gas import terminals into export terminals, while ensuring US manufacturing will continue to be able to compete economically on global markets,” Mary L. Landrieu (D-La.), the committee’s chairwoman, said in her opening statement.

“I think it’s time to move beyond the speculation and get to the nuts-and-bolts business of getting things done,” Ranking Minority Member Lisa Murkowski (R-Alas.) said a few minutes later. “I have long advocated LNG exports. If I have one goal at this hearing, it is to establish there are reasons for optimism about DOE’s procedural change, but there also are reasons for skepticism. The mechanics about licensing remain murky, especially for final timing.”

Said Mark Udall (D-Colo.), “The ongoing crisis in Ukraine and Russia’s announcement this week reinforced my belief that developing our gas resources is important not only to our domestic economy, but also in being able to help our friends overseas,” who a day earlier introduced an updated version of his bill aimed at facilitating US LNG export application reviews (OGJ Online, June 19, 2014).

“I want to responsibly take advantage of our vast gas resource both for domestic consumption and for exports to global markets,” he maintained.

Protect consumers

But other committee members reiterated their concerns that aggressively allowing more US LNG exports might raise domestic gas prices so high that the recent US manufacturing renaissance would be halted. “Our policies on natural gas exports, transport, and use have a tremendous impact on consumers,” said Tammy Baldwin (D-Wis.). “Discussions should fundamentally protect American consumers and give them a seat at the table.”

“I appreciate there’s a window of opportunity internationally, but we have 10 million people out of work in our country,” added Debbie Stabenow (D-Mich.). “When we look at the incredible opportunity we have from this gas boom and compare it with what people in other countries have to pay, it’s something we don’t want to give up. From our standpoint, this is a huge competitive advantage.”

Asserting that consumers are primarily concerned about prices, Martin Heinrich (D-NM) said, “There’s a fair amount of consensus that the sweet spot will be where it’s high enough to encourage production, but low enough to be good for consumers and encourage manufacturing growth.”

Christopher A. Smith, the deputy assistant US energy secretary for oil and gas in DOE’s fossil energy office who was among the 5 witnesses testifying at the hearing, responded, “This goes to the heart of the public interest decision we’re dealing with. Price is an issue which gets a lot of our attention,”

“When we evaluated the first authorization we issued, we contracted the [National Economic Research Associates] study which looked at price and potential impacts on jobs and consumers,” he said. “We also have to consider, in the public review process, comments from a broad range of stakeholders.”

Another witness, Daniel J. Weiss, who directs the Center for American Progress’s climate strategy, observed, “Right now, the Asian market’s price is about 4 times ours, and the European market is about 60% higher than what we pay.

“Our price has helped gas become a substitute for dirtier coal and is helping protect children from respiratory diseases. We should consider what the domestic impact on jobs, wages, and health would be from more exports,” Weiss said.

‘Arsenal of energy’

Domestic energy abundance serves US foreign policy interests by turning the country into an “arsenal of energy” that is able to help friends and allies diversify from costly and dangerous dependence on suppliers like Russia and Iran, according to a third witness, Robert McNally, president and founder of the Rapidan Group LLC.

“In the case of gas, the striking swing of the US from future importer 10 years ago to future exporter now has weakened Moscow’s ability to impose high, non-market based prices for gas in Europe,” he told the committee. “In Asia, the prospect of LNG exports is already boosting Japan’s bargaining position with LNG suppliers in its long-term contracts… I would want to aim right at Russia’s pocketbook and deem every LNG export project in our national interest.”

A fourth witness, Elizabeth Rosenberg, who directs the Center for a New American Security’s Energy, Environment, and Security Program, said, “For all we can do, we won’t change the fact that Russia will continue to be a very significant gas supplier to Europe

“We can encourage changes in pricing for gas and power in Europe, and export more LNG to diversify Europe’s sources and let it negotiate for lower prices from Gazprom.”

Exporting more LNG would deepen US trading ties with strategic states, including those in Europe and Northeast Asia, she testified. “It will bolster the US economy, improve the energy security of partners abroad, and allow the US to more effectively spur and support multilateral action to counter international security threats,” Rosenberg said.

“With respect to LNG exports, time is of the essence,” declared the fifth witness, America’s Natural Gas Alliance Pres. Martin J. Durbin. Global demand is expected to increase 18-35 bcfd by 2035, while proposed new capacity outside the US is approximately 50 bcfd, he told the committee.

“Given the disparity between projected demand and the number of facilities being proposed worldwide, the window of opportunity for the US to get involved is narrow,” Durbin said. “It’s going to be the early movers who are going to have a competitive advantage in the global market.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

Quicksilver Canada gets LNG export approval

07/02/2015 Quicksilver Resources Canada Inc. has received approval from the National Energy Board of Canada to export 20 million tonnes/year of LNG from a pos...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected