American Oil and Gas Reporter - May 2016 - 28

Federal Legislation

Senate OKs Speedier LNG Permitting
WASHINGTON-S 2012, the Energy
Policy Modernization Act, sailed through
the U.S. Senate 85-12 in late April. Although the legislation lacks many provisions of direct importance to U.S. independent oil and gas producers, it does create a shorter process for permitting liquefied natural gas exports. Other oil and gas
provisions include language to improve
natural gas pipeline permitting, promote
energy industry job diversity, and initiate
a pilot permitting program for oil and gas
projects, press accounts say.
The legislation comes a few months after the House's December approval of HR
8, the North American Energy Security and
Infrastructure Act of 2015, which also includes language to expedite LNG permitting (See "Time is Now for Congress to
Act on LNG Exports," AOGR February
2016, pg. 28). The next step entails a
House/Senate conference committee,
which must determine the final bill's
shape.
The American Petroleum Institute
lauded the bill's passage. "Allowing American natural gas to compete in the world
marketplace will benefit consumers, enhance our national security interests, and
bolster our global allies' independence
from nations that would use their energy
resources as a diplomatic and economic
weapon," declares API President and
Chief Executive Officer Jack Gerard.
"Expanding our export opportunities also
will create jobs, and strengthen our economy and our energy security."
Independent Petroleum Association
of America Executive Vice President Lee
Fuller indicates the bill's chief sponsors,
Senate Energy and Natural Resources
Committee Chairwoman Lisa Murkowski, R-Ak., and Ranking Member Maria
Cantwell, D-Wa., strove to make sure the
legislation would attract bipartisan support.
Fuller suggests the language to expedite
LNG exports met that criterion because,
unlike the push to abolish statutory restrictions on U.S. crude oil exports, the issue's
crux was a matter of "how" instead of "if."
"The threshold question of whether
there are going to be permits to allow LNG
exports already is decided," Fuller explains.
"The issue becomes how well that process
is working. People who think it is not
working sufficiently well fashioned
changes to improve it. That is less controversial."
Had Congress not lifted the crude oil
export ban, he adds, oil and gas allies may
well have sought to use S 2012 as a vehi28 THE AMERICAN OIL & GAS REPORTER

cle for such language. Instead, IPAA was
satisfied with a noncontroversial bill.
"There is a tendency to try to put as much
stuff into one bill as possible, instead of
running a series of narrowly-structured
bills," Fuller reflects. "The larger bill
can pull support for some issues that
otherwise may not be able to move by
themselves. On the other hand, it becomes
controversial because it is targeted for issues that are not able to move separately.
It is a fine line to draw."
Fuller says the LNG export permitting
language was a piece of S 2012 since its
early iterations. "That had been a pretty
significant issue, particularly for Senator
(John) Barrasso, R-Wy., who pushed really hard to get that done," he recounts.
"We certainly were pleased to see that he
was able to get it through without drawing huge fire."
According to a transcript of Barrasso's
remarks on the Senate floor, the senator
said the legislation required the secretary
of energy to make a final decision on an
export application within 45 days after the
environmental review process was completed.
"It also provides for expedited judicial
review of legal challenges to the LNG export projects, because things can get tangled in legal challenges that can go on for
months and years," Barrasso reported. "Finally, the bill requires that exporters publicly disclose the countries to which the
LNG is delivered, so the American people know to whom we are selling."
Other Provisions
According to press accounts, the bill's
progress was stymied shortly after it arrived on the Senate floor in January,
when senators Debbie Stabenow, D-Mi.,
and Gary Peters, D-Mi., amended it to include aid to address water contamination
in Flint, Mi. When Senator Mike Lee, RUt., said concern about the Flint program's
funding would prompt him to hold the bill,
Democrats balked at removing the provision.
After she removed the provision, Media reports indicate, Stabenow said the
Flint measures would appear in another
bill. "We are not stopping," she is quoted.
"We are just choosing to take another
path."
Other amendments with the potential
to draw IPAA's support or opposition
also cropped up periodically, but fell by the
wayside, Fuller observes. "Senator Bill
Cassidy, R-La., wanted to pursue some

positive offshore issues, and Senator Bill
Nelson, D-Fl., wanted to pursue some that
would have been detrimental. As it turned
out, the bill left offshore policy unchanged," Fuller says.
One source of Democrat support, press
accounts say, stems from a provision to
reauthorize the Land and Water Conservation Fund. Meanwhile, the National
Electrical Manufacturers Association touts
provisions that it says will promote energy efficiency in buildings and catalyze improvements to the U.S. electrical infrastructure, including transmission distribution
and energy storage systems.
Language designed to bolster buildings'
energy efficiency, NEMA says, includes
directing the Department of Energy to support state and local governments' adoption
of modern building energy codes and requiring DOE to set more stringent energy performance standards for federal
buildings. NEMA says the bill's transmission, distribution, and storage components
include measures to improve transmission
line permitting efficiency, provide the
secretary of energy with emergency authority to protect the bulk power system
from cybersecurity threats, and require
DOE to establish a program to promote
microgrids for isolated communities and
to increase the resiliency of critical infrastructure.
Among the provisions mentioned in a
release from the office of Senator Lamar
Alexander, R-Tn., S 2012 are measures to:
* Authorize a 7 percent increase in
funding each year for basic energy research;
* Eliminate six DOE programs that
were never fully implemented and reform
five others;
* Reauthorize DOE's Vehicle Technologies Office, which supports research
and development to improve vehicle efficiency;
* Require the president to conduct a
quadrennial review of domestic energy capabilities and needs, and to establish a governmentwide energy policy plan to submit
to Congress;
* Instruct DOE to research secondary
uses for electric vehicle batteries; and
* Codify a voluntary water efficiency program at the Environmental Protection Agency for water appliances and fixtures.
Ultimately, Fuller says, the legislation's
passage points to hard work on the part of
the bill's sponsors. "It is difficult for

American Oil and Gas Reporter - May 2016

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