Good Guy Republicans and Gas Companies lobby to save Europe, let us be able to export Natural Gas.

Darth Sidious
Darth Sidious Members Posts: 2,507 ✭✭✭✭✭
http://www.huffingtonpost.com/2014/03/12/ukraine-gas-exports_n_4945352.html

WASHINGTON -- As much of the world focuses on Ukraine's political turmoil and Russia's military response, those at the top of the K Street influence tower see an opportunity to shape oil and gas legislation now moving through Congress with alarming speed.

Led by the powerhouse lobbying of the American Petroleum Institute, a coalition of Fortune 500 energy companies are using the Ukraine crisis to spur Congress to approve a key policy goal: Easing regulations on the export of U.S. natural gas.

Despite a decade-long boom in U.S. natural gas production, very little of America's vast gas reserves are exported.. That's because strict regulations on the transfer and storage of gas have made it impossible to profitably ship out of the U.S.

Oil and gas companies have paid Washington lobbyists millions in recent years to challenge the strict export rules -- to no avail, until now.

As Russian troops occupy Crimea and more mass on Ukraine's border, President Barack Obama and other Western leaders seek ways to apply diplomatic and economic pressure on Russia. Their goals are to support Ukraine's shaky new pro-European government in Kiev, and to weaken Russia's grip on its former Soviet satellite.

Natural gas is key to both objectives. Russia's natural gas pipelines run straight through Ukraine. These pipelines provide gas to meet Ukraine's energy needs, while also supplying Washington's European allies. Over the past five years, however, the price and availability of Russian gas in Ukraine has become increasingly politicized. Russia has cut off the flow of gas to Ukraine twice in the past 10 years.

In Washington, Russian saber-rattling lends urgency to the oil and gas industry deregulation bills long pressed by lobbyists. This time, the bills have a bigger, eager audience on Capitol Hill. For lawmakers, easing restrictions on natural gas exports is a good way to look tough on Russia, and at the same time to tout jobs for the U.S. energy sector.

No fewer than six bills have been introduced in Congress in the past two weeks aimed at speeding permits required to export liquefied natural gas, or LNG.


The lead legislation in the Republican-controlled House was handed to Rep. Cory Gardner (R-Colo.). Gardner recently announced a challenge to freshman Sen. Mark Udall (D-Colo.) that cleared the Republican primary field in the Senate contest. By handing Gardner the export bill, Republicans aim to give the congressman a winning issue of concern to his home state and to burnish his international credentials. Udall introduced a similar bill the same day.

"We certainly like the fact that the Ukraine has essentially elevated the debate over the LNG exports," said Marty Durbin, CEO of America's Natural Gas Alliance, the biggest U.S. trade group of independent gas companies.

At first glance, all six bills look like emergency relief measures, crafted to help balance Russian President Vladimir Putin's power over Ukraine. But that's not what's going to happen.

"Expediting liquefied natural gas exports from the U.S. to weaken Russia's standing is a red herring," Athan Manuel, senior director for the Sierra Club, an environmental group opposed to gas exports, told The Huffington Post in an email. "As Energy Secretary [Ernest] Moniz said last Wednesday, the United States doesn't have the physical capacity to export LNG, nor can we determine where LNG exports go. Exporting LNG is no quick fix to this international crisis."

If you listened to members of Congress in the last week, you'd be forgiven for thinking that American gas exports would be enough to save Ukraine. They're not. They wouldn't even leave American ports until 2015, long after Ukraine's revolution government either will have established itself or failed.

Industry leaders and energy experts concede that American LNG exports are not ready to flow to Ukraine or its European allies. There are no operational LNG export sites in the continental United States that can ship to non-free trade countries, although a few companies have been cleared to begin the permitting process, which can take up to five years.

Nonetheless, K Street is playing the crisis card -- whether it helps the Ukrainians, or not.

Current regulations require a special permitting process for gas exports to countries that don't have free trade agreements with the U.S. The legislation in Congress would speed the process of exporting gas to NATO allies and to other countries, including Japan and India, by waiving the permitting process and expediting permits for 24 LNG export sites in the U.S. awaiting Department of Energy approval to ship gas to those countries.

Passage of the legislation would "send a very strong signal," according to Durbin, that the U.S. would be "able to help our allies and minimize the ability of any country out there to abuse energy as a weapon."

"Our allies in Europe are eager for a reliable partner to enter the marketplace as a stable, secure source of natural gas, and American industry is ready to make that happen," Erik Milito, API's director of upstream and industry operations, said in a statement.

To help push the legislation, the oil and gas industry employs more than 760 federally registered lobbyists and has distributed more than $150 million in campaign contributions since 2007, according to the Center for Responsive Politics.

API and ANGA have spent even more on advertising aimed at voters to soften their views of hydraulic fracturing, energy regulations and other industry priorities. The two groups combined spent $245 million on advertising promoting oil and gas from 2011 to 2012, often targeted in states with important elections. API has already run ads using the names of seven vulnerable Senate Democrats ahead of the 2014 election.

The rush to weaken regulation of gas exporters in the name of helping Ukraine is not without opposition. Environmental groups have been joined by chemical manufacturers, the steel industry and power producers. Electric utilities and chemical makers fear increased gas exports will lead to higher domestic gas prices, cutting into profits.

Dow Chemical, the de facto leader of the export opposition, launched the anti-gas export group America's Energy Advantage with other major manufacturers. The group was founded after Dow quit the National Association of Manufacturers to protest NAM's endorsement of a Department of Energy study finding exports have little effect on domestic gas prices.

America's Energy Advantage has called the push to speed gas exports in light of the Ukraine crisis to be "a false hope."

Dow's vocal opposition to easier exports is not shared by the American Chemistry Council, the chemical industry's trade association, which counts Dow as a member. Dow gave more than $1.3 million to ACC in 2012. ACC states that its membership lacks a "clear consensus" on gas exports to non-free trade countries, so the group supports "further study."

Dow argues that an increase in gas exports would coincide with new pollution regulations for coal-fired power plants. Switching power plants from coal to natural gas while boosting exports of gas would increase the domestic cost of natural gas, according to the chemical industry.

Domestic gas prices have fallen rapidly as drilling and production have expanded in recent years with new technology, including fracking. According to a study last year by the pro-export Small Business and Entrepreneurship Council, natural gas prices have declined 55 percent since 2005, which experts largely attribute to the increase in supply.

Comments

  • Darth Sidious
    Darth Sidious Members Posts: 2,507 ✭✭✭✭✭
    What is the long and short?

    Natural Gas in the US has never been cheaper! It had a brief spike this year due to an unusually cold winter but the stuff is cheap and abundant. This is great news for consumers and businesses that use natural gas, not good for coal which is ? and not entirely great either for natural gas producers either.

    Current law restricts natural gas export.

    A law dating back to 1938 restricts such exports. For the 20 countries that are free-trade partners with the U.S., such as Mexico and South Korea, the law requires the Energy Department, which has primary authority over energy exports, to automatically approve applications to export natural gas. For countries that do not have free-trade agreements with the U.S., which happen to be the ones who want our gas the most (i.e., Ukraine and other European nations) the law says the Energy Department must first determine whether it’s in the “public interest.” This means DOE must determine whether exporting natural gas to these countries serves the U.S. interests, weighing factors like the economy, environment and national security.

    Good Guy Gas companies and good guy republicans in general now want to be able to export natural gas to europe as a bulwark against Russia's monopoly on gas in the region.

    Consumers and Businesses that use american gas are wary because of the most basic lesson in economics that teaches, as demand increases, so does price.

    Even if we said sure, ship it all, the infrastructure needed to make that happen would not be in place to stave off the crisis now unfolding.

    What’s the big controversy? I thought exports were generally a good thing?

    As a general rule, exports usually are. When energy prices are involved, things get complicated. Some people, mainly Democrats and big U.S. consumers of natural gas, worry that exports will force up gas prices in the U.S., squandering a competitive advantage. President Barack Obama is trying to find the right balance between allowing exports without substantially raising prices, now among the lowest in the world. Remember, domestic prices were triple what they are now less than 10 years ago. Don’t even get us started on the politics of exporting crude oil, which we mostly ban right now.

    More here:

    http://blogs.wsj.com/washwire/2014/03/12/natural-gas-exports-101-beyond-ukraine/
  • Darth Sidious
    Darth Sidious Members Posts: 2,507 ✭✭✭✭✭
    'Good Guy' is sarcasm