September 17, 2018

Senate Hearing on Exports of LNG to Europe

Holland & Knight Energy and Natural Resources Blog
Dianne R. Phillips

On Sept. 13, 2018, the U.S. Senate Committee on Energy and Natural Resources held a hearing on the subject of liquefied natural gas (LNG) exports to Europe. The hearing was opened by Senator Lisa Murkowski (R-Alaska). Witnesses included Steven E. Winberg, Assistant Secretary of Fossil Energy for the U.S. Department of Energy (DOE), who described DOE's statutory and regulatory authority for LNG exports and DOE's recent developments which were covered previously in June 12 and June 22 blog posts. Despite the willingness of the U.S. to export LNG to Europe, significant challenges exist, especially with respect to infrastructure, a point also made by Mr. Kevin Book, an independent researcher, whose testimony provides an analysis of the market forces in play.

Dr. Agnia Grigas wrote about the geopolitical risk and national security implications arising from Russian dominance in Europe's natural gas market. Dr. Grigas describes the U.S. as a leader in the development of shale gas poised to participate in Europe's diversification aims. Mark Mills, senior fellow at the Manhattan Institute, echoed some of Dr. Grigas' comments regarding the importance of energy diversification and the unique role of the U.S. He urged Congress to reform the process by which DOE must conclude exports are in the national interest "to eliminate the political uncertainty about energy export policies that could come from some future Administration."

The last witness was Mr. Tyson Slocum, Energy Program Director for Public Citizen, a national consumer advocacy organization. His testimony centered on "the case to limit natural gas exports" concluding it would lead to higher domestic natural gas prices and increased greenhouse gas emissions.

Surprisingly, none of the witnesses were from energy companies experienced in LNG production and shipment, those with real-world expertise. It remains to be seen what, if any, statutory changes are recommended from this Senate Committee, but there appears to be a fair amount of interest in Congress on the subject of LNG exports recently. Notably, the House passed H.R. 4606, the Ensuring Small Scale LNG Certainty and Access Act on Sept. 6, 2018, codifying DOE's recent rule

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