February 01, 2013

Legislation would expand U.S. LNG Exports to Strategic Partners

There was quite a bit of attention on the Hill yesterday as Senator Chuck Hagel, the president’s nominee to succeed Leon Panetta as defense secretary, met with the Senate Armed Services Committee in a daylong confirmation hearing. But while observers were captivated by the proceedings, other events on the Hill made headlines and are worth noting.  

Senators John Barrasso (R-WY) and Mark Begich (D-AK) introduced new legislation that could foster U.S. liquefied natural gas (LNG) trade with U.S. strategic partners. According to The Hill’s Energy and Environment Blog: “The ‘Expedited LNG for American Allies Act’ would put NATO allies and Japan, which is seeking to expand imports as most of its nuclear capacity remains offline, on equal footing with the formal free-trade partners.”

While the proposed legislation names Japan and NATO countries in particular, The Hill also reported that the law could facilitate LNG trade with other strategic partners as well: “In addition to Japan and NATO countries, the new Senate bill would also require DOE to approve exports to other countries if the State Department, in consultation with the Defense Department, determines that it would promote U.S. security interests.”

Senator Barrasso issued a statement about the bill, noting that: “This will expand economic opportunities across America and help lower our nation's trade deficit. Our bill will also promote the energy security of key U.S. allies by helping reduce their dependence on oil and gas from countries, such as Russia and Iran.”

I noted in my January 9 post on the “Top U.S. Security and Foreign Policy Trends to Track in 2013” that U.S. policymakers are likely to develop a clearer position on the future of U.S. natural gas exports. Developments on this issue could happen faster that I initially suspected and are worth watching closely.