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Published: Wednesday March 26, 2014 MYT 1:26:03 AM
Updated: Wednesday March 26, 2014 MYT 1:26:53 AM

U.S. lawmakers mull speedier LNG exports to help Ukraine, Europe

WASHINGTON (Reuters) - The U.S. shale gas boom should be used to rein in Russian influence on American allies in Europe and on Ukraine, a key senator said on Tuesday, as lawmakers weighed changes to export policy to take into account a shifting geopolitical landscape.

European worries about the security of energy supplies have skyrocketed since Russian forces seized control of the Crimean peninsula from Ukraine this month. Moscow has in years past cut gas supplies during regional disputes.

The Ukrainian crisis has led to intense scrutiny of export rules for U.S. liquefied natural gas. The regulations require the Department of Energy to grant permission for natural gas exports to all but a handful of countries, such as Canada, which have free trade agreements with the United States.

Some lawmakers have urged the Obama administration to speed up its review of two dozen pending export applications to help U.S. allies reduce their dependence on Russia for natural gas.

"The last thing (Russian President Vladimir) Putin and his cronies want is competition from the United States of America in the energy race," Senate Energy Committee Chairwoman Mary Landrieu said at a hearing on Tuesday.

The hearing was the Louisiana Democrat's first as head of the Senate panel, after taking over in February from Oregon's Ron Wyden.

The session came a day after the Energy Department's sixth approval of LNG exports from a U.S. plant in the past 10 months.

The DOE has kept up a steady pace of approvals since May, and it was unclear whether recent rhetoric about the Ukrainian situation was affecting its timetable.

Opponents of unlimited U.S. gas exports have argued that shipping too much could cause prices to rise in the United States, hampering economic growth.

NATIONAL INTEREST

At the hearing, Lithuania's energy minister, Jaroslav Neverovic, urged lawmakers to allow allies such as his Baltic country to bypass the lengthy federal review process by designating shipments to those countries as being in the national interest.

"It would strengthen buyers so that we don't have to attach ourselves to these long-term (Russian) contracts because there will be gas in the market," Neverovic said.

Russia is Lithuania's sole supplier of natural gas. The country pays the highest prices for gas in Europe, due to disagreements with Gazprom, Russia's state-owned gas company.

Among the opponents of unlimited U.S. exports, a coalition of industrial companies, led by Dow Chemical Co, has disputed claims that speeding up export approvals would help Ukraine or U.S. allies. They argue that substantial U.S. gas exports remain years away and that much of the exportable gas has been committed to countries like India.

Edward Chow, a senior fellow at the Centre for Strategic and International Studies think tank who supports looser restrictions on exports, said lawmakers should not overstate the immediate impact of approving more exports, given the time it takes to build terminals in the United States and abroad.

"The most important signal we can give right now is to strengthen the Ukrainian economy," Chow said. "Ukraine could be self-sufficient in gas in a faster period of time than you can build an LNG terminal in Ukraine."

Later on Tuesday, the House Energy Committee was to consider a measure to allow U.S. natural gas exports to be made without government approval to any of the more than 159 countries that belong to the World Trade Organisation.

While the administration has not officially taken a position on the measure, Deputy Assistant Secretary for Oil and Natural Gas Paula Gant was to tell lawmakers the bill would essentially eliminate the need for Energy Department review, according to prepared testimony.

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