Legislation Would Eliminate DOE Approval Of LNG Exports

May 2014, Vol. 69 No. 5

There appears to be bi-partisan support for legislation allowing LNG exports to more countries without the need for Department of Energy approval.

Bills introduced in March by both Republicans and Democrats in the House and Senate, seek to ride political momentum gained from Russia's takeover of Crimea and its use of natural gas deliveries as a threat to the new Ukrainian government.

Close-to-identical bills proposed by Rep. Cory Gardner (R-CO) and Sen. Mark Udall (D-CO) would allow U.S. companies to export LNG to countries in the World Trade Organization without waiting for the Department of Energy to approve those exports, as is now required. Currently, only exports to countries with which the U.S. has a free trade agreement (FTA) can be made without DOE approval.

The U.S. has FTAs with 18 countries. The WTO has 159 members.

Senate Republicans have a somewhat less ambitious bill than Udall's. Sens. Lisa Murkowski (AK), John Barrasso (R-WY) and John Hoeven (ND) proposed an amendment to the unemployment insurance extension bill on the Senate floor in early April which requires the DOE to automatically approve applications to export LNG to Ukraine, Japan and NATO member countries.

The bills are not only a response to Russia's use of natural gas as political leverage over Ukraine, and potentially Europe, but also a reaction to the slow rate of DOE approvals of LNG exports, particularly those to non-FTA countries, which requires the Energy Department to determine that the exports are in "the public interest." Exports to FTA countries are automatically classified that way, and are approved pro forma by the DOE.

API Considers New Voluntary Recommended Practice For Pipeline Safety

An American Petroleum Institute (API) advisory committee released a draft "recommended practice" describing a safety management system (SMS) for natural gas and liquid pipelines at a meeting sponsored by the Pipeline and Hazardous Materials Safety Administration (PHMSA) in late February. The API was taking comments through April 11 and will approve RP1173, in some form, later this year.

Ron McClain, president, products pipelines at Kinder Morgan, chaired the committee which worked over the past year and a half to draft RP1173. Representatives of liquid and gas companies sat on the committee, as did association executives such as Scott Currier, director of operations, safety and integrity, INGAA. Peter Lidiak, pipeline director at the API, is coordinating the integration of comments into a final RP1173.