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Friday March 7, 2014 MYT 5:40:20 AM
Friday March 7, 2014 MYT 5:40:20 AM
by timothy gardner
WASHINGTON (Reuters) - U.S. Senator Edward Markey introduced a bill on Thursday to make the Obama administration's approval of liquefied natural gas (LNG) exports more complicated, saying expedited permits will not help Ukraine and Europe manage Russia's control of fuel supply.
As Russia has tightened its grip on Ukraine's Crimea region this week, a slew of Republican U.S. lawmakers, including House Speaker John Boehner, have called on the Obama administration to speed up LNG approvals in order to protect Ukraine and Europe from Moscow's control over natural gas shipments via pipeline.
Russia supplies about 60 percent of Ukraine's gas and crimped supply to Ukraine and Europe most recently in 2009 and 2008.
The American Natural Gas Security and Consumer Protection Act would require the Department of Energy to weigh the impacts of proposed exports on consumers, the economy, and foreign policy.
The bill sponsored by Markey, a Massachusetts Democrat, faces an uphill battle in both the Senate and the Republican-led House of Representatives. But it is evidence of a growing debate on whether exports of gas and crude from the U.S. energy boom can be used as diplomatic tools to fend off moves by Russian President Vladimir Putin.
Later on Thursday, Representative Cory Gardner, a Colorado Republican, and other members of the House Energy and Commerce Committee introduced a bill to expedite the export of LNG to Ukraine and other Eastern European countries.
An energy policy analyst said proponents of fast-tracking LNG exports need to be careful lest they unintentionally trigger a new rule making by the administration that could slow the approval process.
"Changing the process midstream may provide the administration an unintended opportunity to re-evaluate its current strategy," Whitney Stanco of Guggenheim Securities said in a note to clients.
The Department of Energy has approved six rounds of LNG exports since 2011, and only one has full federal permits.
The approvals total some 8.5 billion cubic feet per day of LNG, or more than the 6 bcf per day of gas Russia exports through pipelines through the Ukraine to Europe.
More than 20 projects have applied to export U.S. LNG. But broad shipments are not expected to begin until at least 2017 because, even after permits are granted, equipment and docks costing billions of dollars have to be built.
Markey, who is chairman of the Foreign Relations subcommittee with jurisdiction over international energy security, said that the U.S. government does not control where private companies sell LNG. There is strong demand for U.S. LNG in Japan and India, which unlike Europe, have little access to gas sent via pipelines.
"We should not give away the domestic economic and national security rewards of our natural gas boom, and then just hope that the market reduces the risk of international conflicts," Markey said in a release.
"Using this crisis as an excuse to rapidly and massively expand exports of America's natural gas won't help Ukraine now," Markey said.
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