OIL AND GAS

Bipartisan House members see LNG exports as prelude to lifting crude ban

Rep. Charles Boustany (R-La.) yesterday said he's considering crafting a bill to ease restrictions on crude exports on the heels of what he and his colleagues see as bipartisan success in ensuring faster approvals of domestic liquefied gas exports.

Boustany, whose home state is rich in oil and gas, said during an interview following an event hosted by the National Bureau of Asian Research that he's reviewing current laws and statutes surrounding the U.S. crude export ban, and weighing his options.

"We're looking at some ideas. We're looking at law that has been put in place going back to the 1970s, and then there are also executive decisions, so it's a pretty complex combination," Boustany said. "We're trying to understand what's in the law today, either through the regulatory process or statute to figure out how to draft legislation."

There appears to be bipartisan support -- at least in the House -- for Boustany's effort, as well as well-known interest in the Senate to explore the issue.

Rep. Gene Green (D-Texas), a senior member of the Energy and Commerce Committee, said during an interview yesterday that he has not been contacted by Boustany but would be glad to be a part of the effort to consider how to lift the export ban.

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"I'm kind of two minds: I support reasonable exports, but I also have five refineries in my area -- two or three of them are multinationals," Green said. "They're not part of that coalition that's opposing it, but I know how they feel ... they don't want to be priced out of the market by some of the success we're having with producing oil."

Rep. Joe Barton (R-Texas) has said he wants to push an export bill next year, according to press reports, and Rep. Michael McCaul (R-Texas) picked up eight co-sponsors this spring when he introduced H.R. 4349, the "Crude Oil Export Act."

In the Senate, Republican Lisa Murkowski of Alaska, who is poised to take the helm of the Energy and Natural Resources Committee, has been issuing reports -- and making the case -- about the merits of lifting the ban, but has not yet introduced legislation. "The senator has said she'll introduce legislation if it's needed to bring about the policy changes," said Robert Dillon, a spokesman for Murkowski. "Right now, it's not ripe."

Currently, the United States freely exports oil products like gasoline, but companies are required to obtain licenses from the Department of Commerce to export crude. Congress passed a ban on crude exports in the 1970s after the Arab oil embargo, but the White House has the authority to deem certain exports in the nation's best interest.

Boustany said yesterday that the United States needs to lead a "new era of energy diplomacy" and contribute to the oil and gas markets under international trade rules -- not by nationalizing energy.

But he also warned that tough debate lies ahead, and there's a need to educate members of Congress and the American public about how ending the crude export ban will affect drivers at the gas pump.

Boustany is one of many Republican lawmakers approaching the export debate with caution, echoing what they say is a need to reassure skeptical lawmakers that exports won't lead to higher gasoline prices (Greenwire, Oct. 31).

"We have those who still want to take on a resource nationalistic approach, an isolationist approach toward this. I believe there's going to be a lot of education," he said. "That's going to be a very heated debate."

Statutory encouragement

Despite an ongoing legislative push for faster LNG export approvals, Boustany and Green both said the Energy Department has moved faster in approving proposed export projects to countries that don't have a free-trade agreement with the United States.

The congressmen agreed that DOE has been moving faster since revamping its approval process to decide on projects after they have maneuvered through environmental reviews at the Federal Energy Regulatory Commission. FERC's multi-agency reviews are considered more difficult and costly.

Boustany said DOE's decision to flip the process served to weed out companies that are unwilling or unable to pay for export terminals, and ensured that developers that are ready are given first consideration.

Green and Boustany said DOE's regulatory revamp, and Energy Secretary Ernest Moniz's decision to work with Republican Sen. John Hoeven of North Dakota on legislation to fast-track the agency's approval, appears to signal greater cooperation by the White House on LNG exports (E&E Daily, Nov. 14).

"I'm hoping they will come around, because the players are changing as of January," Green said, referring to the Republican takeover of the Senate. "Some of these things, even as a Texan, it looks like it has real national benefits for us."

Boustany went further.

"I think the White House is understanding the importance and the revolutionary development that this really could bring about in energy markets and for the U.S. economy," he said. "Their initial reticence to deal with a lot of these issues, I think, is starting to erode, hence the willingness to move forward with LNG exports."

Despite DOE's faster action, both House members insisted congressional participation is still needed.

Boustany said he wants to see legislation pass that would fast-track DOE export approvals for countries belonging to the World Trade Organization.

"I think there were some that wanted to limit it to NATO countries only, Europe only; I don't think that was the right approach," he said. "I think affirming we're open to trade within the WTO framework and fixing some of the inherent problems that were built into the sequencing of permits are important developments."

Green said he'd like to give DOE "statutory encouragement" to move faster, and to see Congress pass Rep. Cory Gardner's (R-Colo.) H.R. 6, adding that the Senate could get a two-thirds majority to pass the measure. Gardner will be joining the Senate in January.

And Green said oil exports are next.

"The LNG should go first because of the amount, and it's an environmental issue, in South Texas we're still flaring production and natural gas," Green said, adding that customer and gas will be linked with more pipeline and construction of the export terminals. "That will show the success, and on a reasonable basis we can even export crude oil."

Twitter: @HMNorthey | Email: hnorthey@eenews.net

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