WASHINGTON — Not even an international crisis can break the partisan gridlock in the U.S. Senate.
That’s a cynical, and simplistic, view of the impact — or lack thereof — of the conflict in Ukraine on the debate over exporting liquefied natural gas. But the bottom line is that export-boosting efforts by U.S. Sen. Mary Landrieu and fellow Louisianians in the House of Representatives seem unlikely to win approval before Congress pretty much quits work at the end of next week in anticipation of the November elections.
“Time is a problem now,” Landrieu said. “We’re down to a week a half, there are lots of disagreements on the floor and so it’s going to be hard to do anything legislative.”
That’s despite the recent deployment by pro-export forces of the argument that increased U.S. exports of natural gas to Europe could wean Europe off its dependence on Russian natural gas, thus reducing Russia’s leverage in the dispute over Ukraine — a crisis sharpened by the downing last week of a Malaysian airliner by a rocket fired by Russian-backed Ukrainian separatists.
Landrieu is co-sponsoring a bill with fellow Democratic Sen. Mark Udall, of Colorado, to speed up the Department of Energy review of applications for LNG export terminals. Both are members of the Senate Energy and Natural Resources Committee, which Landrieu chairs and which includes a 12-10 Democratic majority. If they could enlist the support of the committee’s Republicans, who joined Landrieu last month in advancing a pro-Keystone pipeline measure over near-unanimous Democratic opposition, then the LNG bill could move through the committee as well.
But that’s not happening. The political explanation is that Republicans, focused on winning the six Senate seats in November they need to take over the Senate, are loath to support any legislation that vulnerable Democratic senators could claim as an achievement.
Landrieu is one of those vulnerable Democrats, seeking re-election in a deeply red state. The campaign of her best-funded Republican challenger, U.S. Rep. Bill Cassidy, of Baton Rouge, tried this week to turn the issue to Cassidy’s advantage, criticizing Landrieu’s inability to push the bill out of her own committee.
Landrieu said Wednesday that the election-year dynamic is part of the problem, but not all of it.
“It’s been hard for this Congress, even years ago — three years ago, four years ago — to come to agreement on energy policy,” she said.
There are plenty of Democrats who oppose increasing exports. In May, 20 Democratic senators sent a letter to President Barack Obama urging him to consider the potential damaging effect of LNG exports on domestic natural-gas prices when his administration considers export-permit applications. The concern is that the domestic supply would be diverted to more lucrative foreign markets, driving up the cost in the United States.
The giant Dow Chemical Co., which operates six plants in Louisiana, raises that same red flag. Dow is a huge purchaser of natural gas, which it uses both as a feedstock in its manufacturing processes and as a fuel.
In a speech in May to the Baton Rouge Rotary, Dow executive vice president Jim Fitterling said export proponents even then were playing the Ukraine card, “arguing we must fast-track LNG exports to help our allies in Europe.”
But, he said, “Even our own energy secretary says that’s a weak argument, especially given the long timelines to finance and build the terminals.
“Besides, they have yet to show how adding foreign demand on top of growing demand in the U.S. won’t hurt the American consumer,” Fitterling said. “In fact, we think it will do just the opposite: raise energy prices, hit the American consumer with higher bills next winter and threaten the country’s economic recovery just when it’s getting started.”
Landrieu disagrees. “I believe in exports,” she said. “I believe not in unlimited exports, but I do believe in exports that will send a signal that there will be a market for this; that way production will build up again.
“If you don’t open up markets, we’re not going to get the production levels up in this country.”
The American Petroleum Institute, an oil and gas industry group, discounts the effect of increased exports on domestic prices and predicts a boon for Louisiana from building LNG export facilities: more than 74,000 jobs and $16.2 billion in income by 2035.
The industry is still in its infancy, with no more than one facility, in Alaska, now exporting. But the Sabine Pass facility in Cameron Parish has received final federal approval and could be exporting in 2015, and two others nearby are moving through the process. All three projects are in the congressional district of U.S. Rep. Charles Boustany, R-Lafayette, a strong supporter of LNG exports. The Republican-controlled House has approved its own legislation to streamline the permit process.
Thanks to booming production from hydraulic fracturing and horizontal drilling, the United States is projected to change from a net importer to a net exporter of natural gas by the end of the decade. Most current U.S. exports move to Canada and Mexico via pipeline. For overseas sales, the gas is supercooled to change it to a liquid for shipment.
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