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93–179 2015

S. HRG. 114–9 

S. 33, THE LNG PERMITTING CERTAINTY AND 

TRANSPARENCY ACT 

HEARING 

BEFORE THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

ON

S. 33, 

THE LNG PERMITTING CERTAINTY AND TRANSPARENCY ACT 

THURSDAY, JANUARY 29, 2015 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

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(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

LISA MURKOWSKI, Alaska, Chairman 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

JEFF FLAKE, Arizona 

STEVE DAINES, Montana 

BILL CASSIDY, Louisiana 

CORY GARDNER, Colorado 

ROB PORTMAN, Ohio 

JOHN HOEVEN, North Dakota 

LAMAR ALEXANDER, Tennessee 

SHELLEY MOORE CAPITO, West Virginia 

MARIA CANTWELL, Washington 

RON WYDEN, Oregon 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

AL FRANKEN, Minnesota 

JOE MANCHIN III, West Virginia 

MARTIN HEINRICH, New Mexico 

MAZIE K. HIRONO, Hawaii 

ANGUS S. KING, JR., Maine 

ELIZABETH WARREN, Massachusetts 

KAREN K. BILLUPS, Staff Director 

PATRICK J. MCCORMICK III, Chief Counsel 

TRISTAN ABBEY, Professional Staff Member 

ANGELA BECKER-DIPPMANN, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

TARA BILLINGSLEY, Democratic Senior Professional Staff Member 

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C O N T E N T S 

OPENING STATEMENTS

Page 

Murkowski, Hon. Lisa, Chairman, and a U.S. Senator from Alaska .................. 1 

Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from Washington .................................................................................................................... 2 

Barrasso, Hon. John, a U.S. Senator from Wyoming ........................................... 4 

Heinrich, Hon. Martin, a U.S. Senator from New Mexico ................................... 5 

WITNESSES

Smith, Hon. Christopher A., Assistant Secretary for Fossil Energy, U.S. Department of Energy .............................................................................................. 6 

Cicio, Paul N., President, Industrial Energy Consumers of America .................. 15 

Durbin, Martin J., President and CEO, America’s Natural Gas Alliance .......... 37 

Eisenberg, Ross E., Vice President, Energy and Resources Policy, National 

Association of Manufacturers .............................................................................. 50 

Koranyi, David, Director, Eurasian Energy Futures Initiative, Atlantic Council ........................................................................................................................... 60 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

API 

Statement for the Record ................................................................................. 161 

Barrasso, Hon. John 

Opening Statement ........................................................................................... 4 

Chart entitled ‘‘21 Countries Import More Than 40% of Their Natural 

Gas From Russia’’ ......................................................................................... 74 

Boston Globe article entitled ‘‘In face of opposition, company to reroute 

gas pipeline’’ .................................................................................................. 94 

Cantwell, Hon. Maria 

Opening Statement ........................................................................................... 2 

Chamber of Commerce of the United States of America 

Statement for the Record ................................................................................. 163 

Cicio, Paul N. 

Opening Statement ........................................................................................... 15 

Written testimony ............................................................................................. 17 

Responses to Questions for the Record ........................................................... 117 

Macroeconomic Impacts of LNG Exports from the United States—NERA 

Economic Consulting .................................................................................... 165 

Consumer Energy Alliance 

Statement for the Record ................................................................................. 167 

Durbin, Martin J. 

Opening Statement ........................................................................................... 37 

Written testimony ............................................................................................. 39 

Responses to Questions for the Record ........................................................... 137 

Eisenberg, Ross E. 

Opening Statement ........................................................................................... 50 

Written testimony ............................................................................................. 52 

Responses to Questions for the Record ........................................................... 145 

Heinrich, Hon. Martin 

Opening Statement ........................................................................................... 5 

ICF International 

August 29, 2014 paper entitled ‘‘Recent Australian Natural Gas Pricing 

Dynamics and Implications for the U.S. LNG Export Debate .................. 169 

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IV 

JAX Chamber 

Statement for the Record ................................................................................. 230 

Koranyi, David 

Opening Statement ........................................................................................... 60 

Written testimony ............................................................................................. 62 

Responses to Questions for the Record ........................................................... 158 

Murkowski, Hon. Lisa 

Opening Statement ........................................................................................... 1 

S. 33, the LNG Permitting Certainty and Transparency Act .............................. 100 

Smith, Hon. Christopher A. 

Opening Statement ........................................................................................... 6 

Written testimony ............................................................................................. 8 

Responses to Questions for the Record ........................................................... 108 

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S. 33, THE LNG PERMITTING CERTAINTY AND 

TRANSPARENCY ACT 

THURSDAY, JANUARY 29, 2015 

U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. 

The committee met, pursuant to notice, at 9:34 a.m. in room SD– 

366, Dirksen Senate Office Building, Hon. Lisa Murkowski, Chairman of the committee, presiding. 

OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. 

SENATOR FROM ALASKA 

The CHAIRMAN. I’m calling to order the meeting of the Energy 

Committee this morning. 

Thank you to members and thank you to those on the panel for 

joining us. 

As you know we’ve had kind of a busy week here on the Committee. Senator Cantwell and I have logged a few hours standing 

up in the chamber trying to move the Keystone bill through, and 

our hope is that we’re on the final run of that. 

I appreciate our Committee members coming a little bit earlier. 

We had initially noticed this for ten o’clock, but in an effort to get 

through this important hearing and then attend to our business on 

the Floor, we bumped it up half an hour. 

So to our witnesses, thank you for your accommodation as well. 

We appreciate it. 

I want to recognize that Senator Heinrich, as well as Senator 

Barrasso, who are the lead bipartisan sponsors of S. 33, the LNG 

Permitting Certainty and Transparency Act, will have some remarks this morning so I’m going to keep my comments brief. 

I want to recognize them, congratulate them and their co-sponsors, Senator Capito, here on the Committee, Gardner and Hoeven, 

all members, as well as Senators Bennet, Udall, Toomey, Kaine 

and Heitkamp. I appreciate the work that all of you have done to 

get us here. 

I have long argued that exports of liquefied natural gas should 

be expedited from the United States to our friends and our allies 

overseas. I made the case in my Energy 20/20 two years ago and 

again in two more recent white papers, one called ‘‘The Narrowing 

Window: America’s Opportunity to Join the Global Gas Trade’’ as 

well as ‘‘A Signal to the World: Renovating the Architecture of U.S. 

Energy Exports.’’ 

Know from the outset that I fully support the bill we have in 

front of the Committee. I think it’s the culmination of years of legmstockstill on DSK4VPTVN1PROD with HEARINGS

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islative work here in the Congress. I can remember when Senator 

Dick Lugar, who introduced it in December of 2012, laid out the 

concept that exports for NATO members should receive expedited 

treatment over at the DOE. As proposals came forth, more and 

more countries were added to this prospective list, Ukraine, Japan, 

India and eventually the entire World Trade Organization. 

Just yesterday we voted on Senator Cruz’s WTO amendment as 

part of the ongoing Keystone XL debate. 

Last year legislative activity turned to the approval process over 

at DOE. We saw proposals to give the Department a time limit for 

authorizations, these licenses, with the clock starting at various 

points, after FERC final authorization, after pre-filing and so forth. 

Many colleagues co-sponsoring this current legislation were involved in those efforts, as was our former colleague and member 

of the Committee here, Senator Mark Udall. 

I think we all recognize this legislation in front of us, S. 33, is 

a compromise. Compromises, almost by their definition, are imperfect in certain ways, but I think it is the result of some very serious 

work by very serious people coming together to try to address an 

issue. I thank my colleagues for all that they have done to come 

together on this matter. 

With that I will turn to my Ranking Member for her comments. 

STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM 

WASHINGTON 

Senator CANTWELL. Well, thank you, Madam Chairman and 

thank you for the hearing. As you said, we’re on the Floor on a 

pretty serious policy discussion on energy and we’re having this 

hearing this morning. I think it’s obvious to everybody we’re two 

female Committee Chairs, but we also have two female staff directors and I think that the fact that we’re having this hearing and 

the Floor debate at the same time just shows that we’re capable 

of multitasking when it comes to energy policy. 

So it makes for a busy day. 

We’re here to discuss S. 33, a bill to seek acceleration and more 

certainty to the process of determining natural gas exports and 

whether they are in the public interest. As we consider this bill and 

how to discuss it, obviously we are interested in taking advantage 

of America’s abundant natural gas and its ability to help transform 

our economy. 

It was only ten years ago we were discussing how we would need 

to import natural gas and how many new terminals we would need 

to build to meet growing demand, but over the last eight years natural gas production has increased by 36 percent. Today’s natural 

gas has become so plentiful and inexpensive that we are reversing 

the flow and turning those LNG import facilities into export facilities. 

We’re here today, I think five members of our Committee in fact, 

looking for ways to help speed up that export permitting process. 

I appreciate that they are doing so in a way that respects the critical NEPA process, maintains the legal requirements for exports to 

receive a public interest determination and I would note however, 

that the Department of Energy recently changed the process to approve these new projects. The goal was to speed up the overall apmstockstill on DSK4VPTVN1PROD with HEARINGS

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proval process. As we’re considering S. 33, I’m interested in finding 

out whether these issues have actually been addressed. 

So is the new revised DOE process actually working? 

In the five months since the Department of Energy adopted its 

new policy, it has issued four separate approvals for LNG export 

facilities. Of the 37 applications for exports to non-FTA countries 

that have been filed at the Department of Energy, currently 32 are 

pending. 

We must consider whether the revised process is the best way to 

evaluate those projects. 

Second, what are the policy implications for the fixed deadline? 

I’m sure we’ll get into this discussion here and determination about 

the public interest. 

A fixed deadline is not necessarily always in the applicant’s best 

interest as well. What if the authorization can’t be made in 45 

days, but it could be made in 60 days or it could be made in 90 

days? It would be unfortunate the applicant actually could get 

turned down simply because of the timeline this bill lays out rather 

than from a public interest determination. 

Third, is it appropriate for DOE to make the public interest decision before the FERC process is completed? 

Right now DOE starts its public interest process after the Federal Energy Regulatory Commission approval is issued. The bill 

would require the Department of Energy to start its process after 

the NEPA process is complete, but the FERC approval requires 

more than just NEPA review. The FERC approval process includes 

a robust public comment period to vet the siting of these facilities. 

So all of these are important questions that we’ll have for today’s 

hearing. 

Madam Chair, thank you so much for giving our colleagues a 

chance to be here to discuss this issue. 

I would say besides the five members who support this legislation and some of which, as I said, has already been implemented, 

we have great concerns about what is the impact as it relates to 

pricing in the Midwest into natural gas. 

Being from a hydro state, I’m always very aware of how energy 

is the lifeblood of an economy and how much it has built the Northwest economy over and over and over again. I also want to understand how this legislation will impact our big industrial users? 

I look forward to hearing from the panelists who are here today 

to testify. 

Thank you. 

The CHAIRMAN. Thank you, Senator Cantwell. 

I want to note for the record that Senator Portman was also 

added as a co-sponsor to this bill, and we appreciate his involvement as well. 

I will now turn to Senator Barrasso and Senator Heinrich for 

brief comments this morning before we go to our witnesses. As the 

co-sponsors of this bipartisan bill, I’d like to extend them that courtesy. 

Senator Barrasso. 

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STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM 

WYOMING 

Senator BARRASSO. Well, thank you very much, Chairman Murkowski. Thank you for holding today’s hearing on liquefied natural 

gas export legislation. 

Two weeks ago Senator Heinrich and I introduced S. 33, the 

LNG Permitting Certainty and Transparency Act. This bill would 

expedite the permitting process for LNG exports to countries which 

do not have free trade agreements with the United States. It would 

require the Secretary of Energy to make a final decision on an export application within 45 days after FERC completes the environmental review process. In addition the bill would provide for expedited judicial review of legal challenges to LNG export projects. Finally the bill requires exporters to publicly disclose the countries 

to which LNG is being delivered. 

Our bill ensures that the Secretary will make a timely decision 

on LNG export applications and that legal challenges to LNG export projects will be resolved expeditiously. In short, our bill will 

give investors greater confidence that LNG export projects will be 

permitted and built. 

Our bill is carefully crafted, and it’s a bipartisan compromise. It’s 

co-sponsored by five Democrats and five additional Republicans. It 

is nearly identical to the legislation that the House of Representatives passed yesterday with the support of 41 Democrats. Like its 

House companion, our bill offers Congress the best chance to do 

something meaningful for LNG exports. 

Study after study have shown that LNG exports will create good 

paying jobs all across America, good paying jobs in states like Oregon, West Virginia, Colorado, New Mexico and Wyoming. LNG exports will also reduce our nation’s trade deficit which currently 

stands at $39 billion. It will even help President Obama fulfill his 

goal of doubling our nation’s exports which he set five years ago 

this week. 

Finally, LNG exports are, for the United States, a powerful 

means to bring about positive change throughout the world. LNG 

exports will help increase the energy security of key U.S. allies and 

partners throughout Europe and Asia. LNG exports will provide an 

alternative source of energy to countries which Russia has ruthlessly exploited. LNG exports will also give countries an alternative 

to energy from Iran. 

In conclusion, I’d like to thank Senator Heinrich for his leadership on this bill. He’s been a great partner to work with. I’d also 

like to thank Senators Gardner, Hoeven, Capito and Portman, 

members of this Committee, as well as Senators Heitkamp, Kaine, 

Bennet, Udall and Toomey. Finally, I’d like to thank the witnesses 

for their willingness to testify here today. I look forward to the testimony. 

Thank you, Madam Chairman. 

The CHAIRMAN. Thank you, Senator Barrasso. 

And again, thank you for your long leadership on this issue and 

that of Senator Heinrich’s as well. We’ll turn to you, please. 

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STATEMENT OF HON. MARTIN HEINRICH, U.S. SENATOR FROM 

NEW MEXICO 

Senator HEINRICH. Great. Thank you, Madam Chairman, for 

holding this hearing. 

I want to say I very much appreciate the work of Senator Barrasso and his staff in working with us putting together this bipartisan bill, and I’m incredibly pleased to join my colleagues, Senators Gardner, Heitkamp, Hoeven, Kaine, Capito, Bennet, Toomey, 

Udall and Portman, in sponsoring this bill. It just doesn’t get much 

more bipartisan than that around here these days. 

As the Chair mentioned, our bill follows directly from the work 

in the last Congress of our former colleague, Senator Mark Udall 

and in the House also by our new colleague, Senator Gardner. My 

home state of New Mexico, some of you know, ranks seventh in the 

nation right now in gas production. The main gas producing region 

in New Mexico is the San Juan Basin in the Northwest part of the 

state around the city of Farmington, Aztec. 

The good news is we have large reserves of natural gas; however, 

the current surge in gas production has depressed prices to less 

than three dollars per million BTU negatively impacting the economies of domestic gas producing regions including Northwestern 

New Mexico. 

I fully support the measured and cautious approach being taken 

by Secretary Moniz and Assistant Secretary Smith at the Department of Energy. It makes sense for DOE to complete its review of 

an application for exports to non-FTA countries only after the 

NEPA review has been completed. 

In addition, recent studies show that the industry can fully support modest levels of exports of LNG with minimal impacts on consumers while boosting the nation’s economic output and jobs in 

states like Senator Barrasso’s and mine. 

I co-sponsored this bill because I believe it will help stimulate job 

opportunities for my state’s gas industry while fully preserving 

both FERC’s environmental and safety reviews and DOE’s determination of public interest including the authority to approve or 

deny applications to export LNG to non-FTA countries. 

Though our bill allows DOE to continue to independently review 

each application, it will also provide much needed additional certainty and predictability to the industry to market LNG to nonFTA countries, in Europe and Asia. The bill will also provide much 

needed transparency by making available to the public the countries to which LNG has been delivered. 

Thank you again for holding this hearing, and I look forward to 

hearing from our witnesses today. 

The CHAIRMAN. Thank you. 

Now we will turn to our panel. We’ll begin this morning with Mr. 

Smith and just go down the row. I will introduce everyone at the 

outset here, and then we’ll move to five minute presentations followed by questions from the members. 

We first have Mr. Christopher Smith, who is the Assistant Secretary for Fossil Energy at the Department of Energy. Thank you, 

Mr. Smith. 

Mr. Paul Cicio, who is President of the Industrial Energy Consumers of America, welcome. 

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Mr. Martin Durbin, who is President and CEO of America’s Natural Gas Alliance. 

Mr. Ross Eisenberg, who is with the National Association of 

Manufacturers. 

Our last panelist this morning is Mr. David Koranyi, who is the 

Director of the Eurasian Energy Future Initiative at the Atlantic 

Council. 

Welcome to each of you. We can begin with you, Assistant Secretary. 

STATEMENT OF HON. CHRISTOPHER A. SMITH, ASSISTANT 

SECRETARY FOR FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY 

Mr. SMITH. Thank you, Chairman Murkowski, Ranking Member 

Cantwell and members of the Committee. I appreciate this opportunity to be here to discuss the Department of Energy’s program 

regulating the export of liquefied natural gas and to answer questions about S. 33, the LNG Permitting Certainty Transparency Act. 

Since 2010 when we began receiving long term applications to 

export LNG to non-FTA countries, the Department has demonstrated its commitment to protecting the public interest. As you 

know we conduct a thorough public interest determination process, 

as required by the Natural Gas Act, one that’s expeditious, judicious and fair. That process includes ample opportunity for public 

input in order to evaluate if an export is in the public interest. A 

determination allows balancing a range of important factors including economic impacts, international dynamics, security of natural 

gas supply, environmental concerns and market dynamics and developments. 

I testified before this Committee last July, and at the time we 

had just announced a new procedure for processing LNG applications. I told you that by focusing our efforts on the projects that 

completed FERC’s safety evaluation process that reviewed that it 

would help us to make our decision making more effective and efficient and that it would allow the Department of Energy to focus 

on those projects that were most mature and therefore, most likely 

to be constructed. 

Since the announcement of the new procedures FERC has completed its decision making process on two projects. The Department 

promptly issued a licensing decision for each of those applicants. 

And in total the Department has approved 5.74 billion cubic feet 

per day in final, long term authorizations to export to lower 48 

LNG to non-FTA countries from four proposed liquefaction facilities. 

We’ve issued thorough orders that can stand up to the scrutiny 

that they are sure to receive, and we’ve done it within days of the 

project getting signed off from FERC. I believe that this demonstrates our commitment to act expeditiously and effectively in 

addressing the Department’s responsibilities under the Natural 

Gas Act requirements. 

In conclusion, Madam Chair, I appreciate the Committee’s interest in discussing this very important issue with the Department of 

Energy, and I look forward to this discussion. We understand the 

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significance of this issue as well as the importance of getting these 

decisions right. 

With that, I’d be happy to answer any questions that the Committee might have. 

[The prepared statement of Mr. Smith follows:] 

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The CHAIRMAN. Thank you, Mr. Smith. Mr. Cicio. 

STATEMENT OF PAUL N. CICIO, PRESIDENT, INDUSTRIAL 

ENERGY CONSUMERS OF AMERICA 

Mr. CICIO. Chairman Murkowski, Ranking Member Cantwell and 

members of the Committee, thank you for this opportunity to be 

here today. 

My name is Paul Cicio, and I’m the President of the Industrial 

Energy Consumers of America. We are an industrial consumer advocate. 

IECA is not opposed to LNG exports; however, today there is no 

energy public policy decision more important than whether or not 

to approve an LNG export facility for 20 to 30 years. The reason 

is that all risks associated with the export of LNG fall on the consumer. The larger the LNG export volume, the larger the cumulative risk. 

Australia has over a 200 year supply of natural gas which is 

more than twice that of the U.S., yet today because of unfettered 

LNG exports domestic prices have tripled because the Australian 

government has failed to protect the consumer. Manufacturers are 

shutting their doors. Power plants are converting from gas to coal, 

and we do not want to see that happen here long term if policy 

makers do not fully implement the Natural Gas Act. 

The DOE sponsored NERA report illustrates that LNG exports 

create winners and losers. It explains how higher natural gas 

prices can be expected to have a negative effect on output and employment, particularly by sectors that use large amounts of natural 

gas. And that is us. 

Figure 12 of our written testimony is directed from the NERA report and shows how exports result in loss of labor, income wages, 

capital income and indirect taxes. Combined these accelerate wage 

disparity, and the net economic gain at its peak is a mere $20 billion in 2020 and declines from there. The bottom line is that the 

bulk of the population is negatively impacted to the benefit of a few 

raising questions about how it can be in the public interest. Despite 

this the NERA report was used to justify several export applications. 

In their wisdom the Congress passed the Natural Gas Act. And 

they did so with two things in mind, the cost of LNG exports to 

consumers and implications to trade. Congress understood that unlike so many other tradable products, natural gas is different because consumers do not have a substitute and it is not renewable. 

Congress felt a responsibility to act in their behalf to protect the 

unknowing consumer, who does not have the ability to understand 

the long term implications of LNG exports. 

For this reason the Natural Gas Act includes a provision. It’s 

called the Public Interest Determination, and it’s completed for 

each application to export to non-free trade countries. 

However, the Government Accountability Office September 2014 

report says that the DOE has not defined public interest. That is 

a glaring omission, if not a legal issue. If the DOE has not defined 

public interest, how is it that they can make informed decisions on 

behalf of 72 million natural gas consumers and 145 million consumers of electricity? 

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Without a definition of public interest how much public hardship 

can be inflicted before the DOE denies the next application? 

The definition of public interest is not a macroeconomic number, 

like the so called net economic benefit number of the NERA report. 

The real definition of public interest was pioneered by Justice 

Brandeis. ‘‘The public interest is that which produces the most 

good for the most people.’’ 

Finally, the Natural Gas Act provides for ongoing monitoring and 

adjustment to an LNG application. The Natural Gas Act specifically anticipates that adjustments to LNG exports would be in the 

public interest when it states that DOE ‘‘may from time to time 

after opportunity for hearing and for good cause make such supplemental order in the promises as it may find necessary and appropriate.’’ So the Natural Gas Act creates an obligation for the DOE 

to monitor and to do economic impact assessments at regular intervals to be sure that exports do not harm the economy and jobs long 

term. 

However, contrary to the Natural Gas Act, the DOE has stated 

that it does not plan to monitor impacts and make such adjustments. To not do so implies that U.S. policy is designed to protect 

the capital investment of LNG exporters and not U.S. manufacturing assets. 

In closing we urge the support of this Committee to conduct oversight and require the DOE to conduct rulemaking to define public 

interest, create up-to-date decision making guidance, to condition 

applications for monitoring, conduct economic assessments at regular intervals and be prepared to protect the public. We urge the 

DOE from refraining from further approvals until such time it 

makes these necessary rulemakings. 

Thank you. 

[The prepared statement of Mr. Cicio follows:] 

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The CHAIRMAN. Thank you, Mr. Cicio. Mr. Durbin. 

STATEMENT OF MARTIN J. DURBIN, PRESIDENT AND CEO, 

AMERICA’S NATURAL GAS ALLIANCE 

Mr. DURBIN. Good morning, Chairman Murkowski, Ranking 

Member Cantwell, members of the Committee. Thank you for the 

opportunity to appear before you this morning. 

America’s Natural Gas Alliance strongly supports S. 33 as a 

means to establish a timely and certain review process for LNG export facilities. This will send a strong pro-infrastructure signal to 

the investment community and a clear message to our allies and 

adversaries that the U.S. is determined to play a leadership role 

in global energy markets. Given the sheer magnitude of U.S. shale 

gas resources there’s no question that our nation can be a global 

energy leader without sacrificing our domestic advantage. Now is 

the time to seize this opportunity. 

While some have raised concerns regarding supply and price, the 

markets and experience speak for itself. As recently as 2009 the 

U.S. Energy Information Administration forecast that natural gas 

prices would rise to 13 dollars by 2035. Just this year, though, or 

last year in 2014, in multiple independent projections EIA put that 

figure below six dollars. If we look at where prices are today, it’s 

going to be hard to get there. 

In fact right now in the dead of winter, peak season for natural 

gas demand, prices are less than three dollars at Henry Hub and 

even lower if you’re in Pennsylvania. So the markets are screaming 

for new and diversified demand outlets for natural gas. LNG exports offer a prime opportunity to send critical signals to the markets that these outlets are on the way. This in turn will help maintain and grow production so our nation can take full advantage of 

the promise our shale gas abundance holds for our economy, environment and energy security. 

The U.S. is now the world’s leading producer of natural gas. With 

this in context, the U.S. consumed 26 trillion cubic feet or TCF of 

natural gas in 2013. The most recent supply projections show a 

range of technically recoverable gas using today’s technology from 

two thousand two hundred to more than three thousand five hundred TCF. The only remaining uncertainty around natural gas supply is where’s the top? 

As technology continues to advance reserve estimates continue to 

grow. As a result public and private sector experts agree that the 

U.S. has enough natural gas at reasonable prices to sustain substantial increases in domestic consumption and significant levels of 

exports. Global market dynamics will limit both the size of our export opportunity and the number of facilities that ultimately receive financing. As a result EIA projects that natural gas exports 

will account for less than ten percent of demand for U.S. natural 

gas by 2040. 

Those same global market dynamics also underscore the sense of 

urgency. LNG facilities cost billions of dollars and take several 

years to construct. Unless we act quickly to provide greater certainty in the approval process we miss the opportunity to become 

an integral player in international markets. 

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Far from competing with domestic interests, LNG export markets 

will strengthen the U.S. economy. Already, the U.S. is experiencing 

a manufacturing resurgence thanks to the ready availability of 

abundant, affordable natural gas. What is less widely known is 

that the natural gas liquids found within natural gas are an essential feed stock to many industries led by plastics and chemicals. 

Simply put, more dry gas production for export means more natural gas liquids for American manufacturers. In fact, as of this 

week the chemical industry alone has identified 220 announced 

projects representing 137 billion dollars in potential investment all 

linked to natural gas. So as markets scream for demand, exports 

provide a win/win opportunity. 

Of course LNG export terminals are just one aspect of energy infrastructure. Timely approvals of new and expanded pipeline 

projects also require the priority attention of policy makers at all 

levels. As several members of this Committee know firsthand, this 

is particularly true in the Northeast where expanded pipeline infrastructure would help consumers and unlock the kinds of natural 

gas fueled manufacturing opportunities we see flourishing in so 

many parts of the country. 

I thank Senators Barrasso and Heinrich and the bipartisan cosponsors of S. 33 for working to ensure America’s competitive advantage. I appreciate the Committee drawing attention to these 

issues and look forward to our continued work together to build 

this energy revolution into a sustainable, economic, manufacturing 

and environmental success story for the nation. 

Thank you. 

[The prepared statement of Mr. Durbin follows:] 

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The CHAIRMAN. Thank you, Mr. Durbin. Mr. Eisenberg, welcome. 

STATEMENT OF ROSS E. EISENBERG, VICE PRESIDENT, ENERGY AND RESOURCES POLICY, NATIONAL ASSOCIATION OF 

MANUFACTURERS 

Mr. EISENBERG. Good morning, Chairman Murkowski, Ranking 

Member Cantwell and members of the Committee. On behalf of the 

National Association of Manufacturers, the largest industrial trade 

association in the United States, I’m pleased to share our views on 

S. 33, the LNG Permitting Certainty and Transparency Act. This 

is a bill that the NAM supports. 

Two years ago I had the privilege of coming before this Committee to talk about the exact same issue we’re here to talk about 

today. At the time the Department of Energy had placed all license 

applications on a temporary hold while it studied the macroeconomic impact of exporting LNG, and that study actually forecasted that the U.S. would gain net economic benefits from doing 

so. 

The NAM at the time urged the Committee that the free market 

will find equilibrium here and that exports of LNG should be governed by principles of free trade and open markets. 

The NAM also urged the DOE to provide LNG license applicants 

an up or down decision as expeditiously as possible to avoid market 

distorting barriers to trade. 

Now some witnesses at that hearing took the opposing view calling it a question of validity of the DOE study’s findings and warning of constrained natural gas supplies, ‘‘unfettered’’ LNG exports 

and skyrocketing natural gas prices. Now fast forward two years to 

today and the doomsday predictions really just have not come true. 

Proven natural gas reserves increased by ten percent in 2013 setting another new record. 

We don’t have anything even remotely resembling unfettered 

LNG exports because only five of the terminals out of 37 are under 

construction. The overwhelming numbers of economists who have 

looked at this issue, including the DOE itself, have all repeatedly 

concluded the LNG exports and a strong domestic manufacturing 

sector can coexist. As of last night the Henry Hub spot price for 

natural gas stood at $2.92 which is a full 38 cents lower than the 

day I was here to testify on this issue two years ago. 

And throughout, the nation’s natural gas boom has sparked a 

manufacturing comeback. That’s a wonderful story. Study after 

study has confirmed and continues to confirm that manufacturers 

are investing in the United States thanks to a competitive, abundant and secure supply of energy. 

Manufacturers in Arkansas, California, Colorado, Iowa, Louisiana, Maryland, Minnesota, Nevada, New York, Ohio, Oklahoma, 

Pennsylvania, Texas, Utah, Virginia and many others are already 

taking part in the LNG supply chain to support the terminals that 

are under construction. 

Dominion’s Cove Point LNG facility in Maryland will create 

14,600 jobs in manufacturing, service and other sectors across the 

supply chain. 

Cheniere’s $12 billion Sabine Pass project, which is quite possibly the largest capital project in Louisiana history, will support 

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the livelihoods of up to 18,300 Louisiana residents at peak construction at an average of nearly 6,400 Louisiana workers over 8 

years. 

Now to put 6,400 workers in perspective there’s actually 14 individual parishes in the State of Louisiana that have fewer than 

6,400 residents employed. The project’s supply chain for Sabine 

Pass contains 54 manufacturers in 17 different states. This is just 

the tip of the iceberg as many other manufacturers across the 

United States have made investments in their own businesses to 

position themselves to participate in LNG exports. 

At NAM we applaud the DOE for taking a hard look at the inefficiencies within its own process and trying to fix them. While two 

license decisions happened relatively quickly after the new procedures went in place, we once again do find ourselves in a situation 

where the approvals are starting to lag. For Cove Point, a project 

that received conditional approval as far back as 2013, we’re now 

approaching the end of the fourth month of deliberations on a final 

license. 

So the NAM therefore believes that S. 33, the LNG Permitting 

Certainty and Transparency Act, is both timely and warranted. 

This truly bipartisan, heavily negotiated bill ensures that the free 

hand of the marketplace rather than bureaucratic inertia will govern international trade by providing a 45 day deadline on the DOE 

to approve or deny pending LNG export applications. It does not 

impact the economic, environmental or safety studies that the 

FERC and other agencies are required to conduct, nor does it remove any other relevant regulatory requirement. 

By eliminating unnecessary delays, the bill would protect against 

running afoul of our international obligations under the WTO. It 

would provide a clear resolution to the outstanding questions surrounding the regulatory approval of the infrastructure necessary to 

allow the export of a product, and that’s a principle that domestic 

manufacturers strongly support. 

Developers looking to build an LNG facility must subject themselves to basically running a gauntlet of a long, complex and multifaceted permitting process. At a minimum they should be able to 

rely on some amount of certainty that once they’ve gone through 

that process and received all their permits and approvals that the 

DOE will quickly decide on a final license to export. S. 33 provides 

this certainty while ensuring that all environmental laws will be 

complied with to their absolute fullest extent. 

Manufacturers support S. 33, and we urge the Committee to approve this legislation. 

Thank you. 

[The prepared statement of Mr. Eisenberg follows:] 

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The CHAIRMAN. Thank you, Mr. Eisenberg. And finally, Mr. 

Koranyi. 

STATEMENT OF DAVID KORANYI, DIRECTOR, EURASIAN 

ENERGY FUTURES INITIATIVE, ATLANTIC COUNCIL 

Mr. KORANYI. Thank you, Madam Chair. Thank you, Ranking 

Member Cantwell, members of the Committee. I am honored to appear before you today to discuss the LNG Permitting Certainty and 

Transparency Act geopolitical implications. 

I will make three brief points in support of the act. 

Point number one, European energy security is a matter of national security for the United States. 

As Mr. Putin continues his aggression against Ukraine that 

threatens the Trans Atlantic community as a whole, energy import 

dependence points to a strategic vulnerability of key allies especially in Central and Eastern Europe. As a Hungarian I witnessed 

firsthand the devastating effects of the 2006 and 2009 Russia/ 

Ukrainian gas crises in the region. We cannot be sure that another 

cutoff does not happen, if not this year, then the next. 

Furthermore, compromising energy security and corruption in 

the energy sector are at the heart of Moscow’s strategy to divide 

our alliance and render it ineffective. OPEC deals cut with the 

Kremlin question a country’s ability to conduct an independent foreign policy that is boasting their national and in the allied interest. 

This is especially unnerving as the European Union needs unanimity to uphold or extend sanctions against Russia, a critical element in an allied strategy to deter further aggression; therefore, 

lessening European dependence on Russian natural gas is vital. 

The good news is that Europe is finally stepping up to the plate, 

but Europe cannot succeed without the help of the United States. 

Europe has access to multiple sources of piped gas as well as LNG 

supplies. Yet in addition to the risks associated with supplies from 

Russia current and prospective, pipe supplies from both the south 

and the southeast face their own challenges due to the turmoil in 

North Africa and across the Middle East. 

Most LNG supplies outside the U.S. are not without risk either. 

LNG exporters such as Nigeria and Yemen are facing terrorist and 

insurgent activity. Producers such as Egypt and Indonesia have to 

grapple with increasing domestic demand that limit their export 

capabilities, and Qatar is the biggest energy producer to date. Its 

LNG tankers have to pass through the Strait of Hormuz and the 

Suez Canal, both potential liabilities. 

Meanwhile U.S. LNG supplies do not face such geopolitical 

qualms. U.S. LNG would provide a reliable and competitive alternative to the allies in Central and Eastern Europe. U.S. LNG 

would introduce much needed additional liquidity to the global gas 

markets, complement European measures forcing Gazprom to act 

in a competitive manner and send a critically important message 

of strategic reassurance to a region that is under the most serious 

threat since the end of the Cold War. 

Point number two, even if not a single drop of gas makes it to 

Europe, which I believe is a very unlikely prospect, U.S. LNG exports will nevertheless substantially improve European energy security including that of Ukraine. U.S. LNG is admittedly no panmstockstill on DSK4VPTVN1PROD with HEARINGS

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acea. In and of itself it will not solve Europe’s energy security problems nor will it push Russia to its knees, but clarity in the LNG 

export licensing procedure would put a downward pressure on gas 

prices and accelerate the interconnection of the European gas markets well before, or even in the absence of, a single American gas 

molecule reaching Europe. That is because LNG markets are global. Markets are shaped by the future expectations and the mere existence of a credible alternative would incentivize infrastructure development and put pressure on the dominant supplier, Gazprom. 

LNG recertification terminals enabled both Greece and Lithuania 

recently to secure substantial price discounts from Gazprom. 

Finally, unhindered U.S. energy exports, in general, and LNG exports in particular, are critically important for the credibility of the 

United States foreign and trade policy. Historically the U.S. has 

been promoting transparency and open markets and opposing resource nationalism to the great benefit of the whole world. Introducing that transparency into the export licensing procedure would 

be critical to bolster trust in America’s global leadership. 

Thank you, Madam Chair. 

[The prepared statement of Mr. Koranyi follows:] 

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The CHAIRMAN. Thank you. Thank you all this morning for your 

testimony and comments. We greatly appreciate it. 

We’ll now begin questions from the members. I would ask members to be sure to limit your time to five minutes as we’ve got a 

lot of folks to get through, and we’ve got votes that are theoretically going to begin around 11 o’clock. 

Mr. Smith, I would like to start with you. 

Reading through both your written testimony and the comments 

you’ve provided this morning, you’ve outlined the steps that DOE 

has taken that really get us to a point where there is less time between the approvals. I appreciate what you have done with the realignment. 

Your testimony states that this legislation is ‘‘not necessary.’’ 

Now this is not saying that you don’t support the legislation. I certainly understand that. Under your leadership and with Secretary 

Moniz, you’ve issued several final authorizations. 

Again, I appreciate the comments and the direction you’re taking, but I think we here in Congress need to be thinking long term. 

Secretary Moniz has made very clear that he wants to work 

through this process, but I worry that perhaps a future Secretary 

of Energy might not be as favorable to LNG exports as we have 

seen coming out of this Secretary and the Administration. 

So the question that I would ask you very directly is whether or 

not you think S. 33, as it is written, is workable and achievable? 

Mr. SMITH. Well, thank you, Madam Chair, for the question. 

First of all, we understand the intent and interest of this legislation. In fact, as I listen to many of the comments that have been 

made here in opening statements, we share many of these drives, 

many of these core values of transparency, efficiency, of making 

prudent public interest determinations. So I think we have a lot in 

common in terms of what we want to accomplish, and we understand the intent of the legislation. 

In fact, the changes that the Department has made to our internal process have been along exactly those same lines to make sure 

that we’re making good, solid, public interest decisions that withstand scrutiny. So we think that we are currently moving in that 

direction, and we’re using the current statute in a way that protects the public interest. 

That said, your direct question is about the workability of the 

legislation that’s being proposed. Certainly if this legislation is 

passed as is currently written the Department will be able to accomplish the mission. We will, as always, accomplish the letter and 

spirit of the law and we believe this is a solution we will be able 

to comply with. 

The CHAIRMAN. Well, I appreciate that. So what you’re telling me 

is you can do it. You have been doing it. 45 days is workable? 

Mr. SMITH. Yes, Senator. Again, if this is the legislation that’s 

passed in the current form. 

The CHAIRMAN. Understood. 

Mr. SMITH. That we can comply with the regulation or the law. 

The CHAIRMAN. I appreciate that. 

Let me ask you a question regarding LNG and Alaska. As you 

know the facility there on the Kenai Peninsula has been exporting 

LNG since 1969. Some forget that Alaska has been engaged in the 

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export business for a long, long period of time. Granted, these have 

been small amounts, but it has been a process that has been without interruption. It’s been the longest export contract that we’ve 

had in the country. I think it has laid the ground work, most certainly, for things to come. 

Of course we also have the bigger project, the Alaska LNG 

project that, I believe, merits a conditional authorization from DOE 

on the basis of what the Department itself has described as these 

‘‘unique’’ features of an Alaska project. Not only will the project require the liquefication facilities, but you’ve got an 800 mile pipe 

that we’re dealing with. 

So the question for you this morning is whether it is DOE’s understanding that this legislation would in no way affect Alaska 

LNG’s eligibility for a conditional authorization to export to nonFTA countries? Further that S. 33 will, in fact, impose a 45 day 

deadline for the project to receive a final authorization after it has 

completed the environmental review? 

Mr. SMITH. Thank you for the question, Madam Chair. 

So, I’ve actually visited the Kenai facility in Alaska and spent 

time on the North Slope. We’ve got a keen understanding of the opportunities and some of the challenges with all of those projects. 

It is my understanding that we’ve already stated that we have 

held the right to do a conditional authorization for projects coming 

out of Alaska. It’s my view that this bill, as written, would not 

change that. We would still have the ability to issue a conditional 

authorization for both of these projects, particularly the North 

Slope project, which has some additional complexities that might 

require a conditional authorization. 

In addition, as we read the law as currently written it doesn’t appear to make any distinction between the lower 48 and Alaska in 

terms of the time limit that it would impose on the Department. 

The CHAIRMAN. Okay. Thank you. I appreciate that, and I also 

appreciate you going up there and spending some time. I’ll turn to 

my Ranking Member. 

Senator CANTWELL. Thank you, Madam Chair. I want to be clear. 

I like the natural gas juxtaposed to what we’re discussing on the 

Floor which, I think, is a dirtier source of fuel, and I definitely like 

exports. But I like something even better than those two. I like 

cheap, domestic sources of energy. 

So I think part of this discussion is how we ensure that the U.S. 

economy takes best advantage of this. I have a bunch of different 

questions, and maybe I can just cue it all up and you guys can go 

from there. 

Mr. Durbin, if you could just talk a little bit about the domestic 

natural gas markets and some of the other uses that are going to 

come into the picture like heavy duty fleet trucks and the potential 

for the maritime industry. We’re very, very excited about the transition of the maritime industry to natural gas as a fuel source, 

again, to comply with environmental issues in places like L.A., 

Long Beach and all up and down the coast. So how do we get that 

right? 

Mr. Cicio, what price point impacts your business? During the 

Enron crisis, and again, those were very exaggerated rates, but the 

aluminum industry and several other mineral industries just had 

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no choice. The price fluctuation came and guess what? Those factories shut down forever. 

So these long term contracts get locked in on export at say a 

preferential rate for a long period of time because the nature of 

those contracts. Then the domestic market sees this fluctuation 

based on that international market, not locked in to long term contracts. What price point do you start worrying about the impact to 

industry? 

My guess is it’s a lot narrower than people might imagine. Then 

the doors shut, and the factory is not open again. It’s not like you 

turn the lights back on. This is what we saw in the Northwest. 

Aluminum plants shut down forever and forever. Okay? This is 

very important to Midwest industry issues. 

The third point is, Mr. Smith, I just don’t know what happens 

when you get this list and you say, okay, alright, here we are. And 

we’re not done. Denied. Okay? So is that denied and now you’re 

back at the bottom of a hundred permit list or denied and maybe 

in two years I’ll think about you again? 

So my question is the denial part of this legislation is a good idea 

in concept, but I think what it might actually mean on projects 

that really shouldn’t be denied is an interesting question. I wonder 

if you have a process? 

So as quickly as people can answer that would be appreciated. 

Mr. DURBIN. Senator, if I could, to start where the markets are 

for natural gas going forward. It’s fairly clear. EIA has come with 

some very good projections on what they think the demand increase will be in these areas. 

We think there may be some additional opportunities as an industry, but nonetheless, first is power generation. I don’t think 

there’s any question that we’re going to continue to see natural gas 

grow in the power generation market. 

Second is the industrial and manufacturing. Again, petrochemicals are going to be a huge part of that not only because of the dry 

gas itself but because of the natural gas liquids that we’re producing and that’s been increasing. 

Third is in transportation. It’s over the road, rail, and marine. 

I will tell you that even if we’re wildly successful there it barely 

moves the needle as far as demand goes. 

We’re all for it. We’re pushing for it. We want to see it happen 

everywhere we can, but that’s not a huge demand draw. 

Exports, of course, is last. 

Senator CANTWELL. Okay, Mr. Cicio, on the price? 

Mr. CICIO. My energy intensive consumers consume about 75 

percent of all the natural gas of the entire manufacturing sector. 

Their operating costs range from about 20 percent energy to as 

much as 80 percent of the cost of making anything from plastics, 

chemicals to fertilizers, cement, steel, aluminum, plastic, glass. 

There’s two parts to the answer to that question. There’s no specific price point. 

First on the table is the fact that natural gas is subsidized and 

regulated in so many countries across the world that is kept at a 

low price. For example, China may buy—last year they bought 

LNG at $16, but they were providing that gas to their non-residential consumers, manufacturers, at $1.78. Alright? 

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So when we come to this issue, we are not looking short term. 

We’re looking long term because the fact is there are uncertainties. 

In the domestic market in terms of what price point can producers 

produce gas? That can impact investments. 

No one forecasted the price drop of crude oil. That was a surprise, and that’s impacting investment in oil and gas going forward. That will impact the supply. No one forecasted it. 

So we can’t answer the question what is the price point, but 

what we do know is from 2000 to 2008 the price of natural gas increased by over 200 percent in the United States. That was over 

a 20 percent increase per year, and over that time frame we lost 

44,000 manufacturing facilities. 

Now those plant shut downs were not entirely because of energy, 

but they were a major part of the plant shutdowns. 

Senator CANTWELL. Thank you. Mr. Smith, that’s a pretty big 

question. Our time is over, but we can either get a short answer 

or a longer written answer. However, Madam Chair, do you want 

to proceed? 

The CHAIRMAN. Very quickly. 

Mr. SMITH. I can give a quick answer. 

I think it’s important to emphasize that when we look at each 

one of these applicants we are looking at each of these applicants 

on a case by case basis. Each of the orders is a long, detailed document that we’ve endeavored to write in good, clear, common sense 

English that has to address all of the points that are made by the 

interveners in each of the cases. So we get varied comments. Some 

strongly pro, some strongly against. And depending on the comments that we get, we have to address each of those comments and 

make our public interest determination based on a variety of factors. What we do subsequent to that would depend on the individual case. So there’s not a rubber stamp. There’s not a particular 

answer that comes out of a spreadsheet. It would depend on the 

case. 

Senator CANTWELL. Thank you. 

The CHAIRMAN. Thank you. I’m now going to turn to Senator 

Barrasso, followed by Senator Heinrich, going a little bit out of 

order with the early bird rule, as the sponsors of the bill for their 

questions and then we’ll go to those who are next in line which 

would be Senator Stabenow after that. Senator Barrasso. 

Senator BARRASSO. Thank you, Madam Chairman. 

Mr. Smith, just following up. You correctly state the intent of S. 

33 is to add greater regulatory assurance to the application, to the 

applicants for the LNG exports. And as you said, the Department 

does share the goal of transparency and certainty of process. 

One of the areas that we disagree a bit is the Department is 

committed to act expeditiously, but I don’t think we’ve gotten those 

results because the DOE has given final approval to only five LNG 

export applications. There are 33 export applications pending at 

DOE. A dozen have been pending for more than two years. An additional 13 have been pending for more than a year. 

So could you explain a little bit this discrepancy that we’re seeing here? 

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Mr. SMITH. Well, thank you, Senator. First of all, I concur that, 

as we understand the intent of the legislation, I think, there’s some 

agreement. 

In terms of how the process currently operates. The way the Department is operating is that there are two important things that 

a particular exporter needs in order to build a plant. 

They need to have authorization from FERC that shows that 

they can build the plant in a way that’s safe. So they have to be 

able to build the plant. They also need authorization from the Department of Energy to actually export the molecules. And those two 

together create a project. 

Our process now says that we look at a particular applicant after 

it’s completed that FERC process to demonstrate that they can actually build the plant safely. In that aspect we’ve moved very 

quickly. Essentially as soon as these projects have come out of the 

queue, out of the FERC process, we’ve moved very quickly. And in 

the case of one of the applicants we acted the next day, within 22 

hours. 

So I think we’ve demonstrated that our intent certainly is to 

move quickly, but we also have to act in a way that’s judicious and 

write these orders in a way that withstands the scrutiny that 

they’re sure to receive. There’s a variety of views that we have to 

balance. 

Senator BARRASSO. So is it fair to say that the Department of 

Energy would be able to comply with the deadline that’s set in the 

bill? 

Mr. SMITH. That’s my view, yes. 

Senator BARRASSO. Thank you very much. Mr. Koranyi, it’s my 

understanding there are 21 countries now that import more than 

40 percent of their natural gas from Russia. And we have a list of 

those. 

[The information referred to follows:] 

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Senator BARRASSO [continuing]. In your testimony you stated 

that the United States is in an excellent position to improve liquidity on the global LNG market thereby improving conditions for 

Central and Eastern European countries to access LNG and that 

an accelerated process, you go on to say, of LNG export licensing 

would put downward pressure on gas prices in Central and Eastern 

Europe well before even a single molecule of American gas might 

even reach Europe. So would you further explain how U.S. LNG exports can help European nations even if U.S. LNG is actually not 

shipped to Europe? 

Mr. KORANYI. Thank you, Senator. That’s an excellent question. 

It actually already has because the mere fact that the United 

States no longer imports in large quantities LNG from outside the 

U.S. actually put a downward pressure on European pressure already. One of the reasons why Gazprom had to renegotiate long 

term natural gas supply contracts in Europe and in Central and 

Eastern Europe as well is that these countries built up LNG terminals, reclassification terminals, and they have access to this global 

energy market. And because supplies from Qatar, supplies from Nigeria, from other places that were supposed to go to the United 

States ended up in Europe and put a downward pressure on prices. 

So this has already happened in the past couple of years. 

Looking forward if there are additional quantities on the international gas markets, LNG markets, that will put a further downward pressure on these prices, especially if Central and Eastern 

Europe will manage to complete its regional market integration 

and integrate well into the rest of the EU. So there is a single, unified European energy market. 

Senator BARRASSO. Thank you. Mr. Eisenberg, you stated that 

the overwhelming number of economists who have looked at this 

issue, including the Department of Energy itself, have all repeatedly concluded that LNG exports and a strong domestic manufacturing sector can co-exist. Could you expand on your comments for 

that? 

Mr. EISENBERG. Thank you, Senator. That’s a really excellent 

point. I’ve read most of the studies at this point. I’m not an economist, but I know a lot of very smart ones, and I’ve read most of 

them. 

The list is pretty long. They’ve all basically come out to the same 

place which was NERA. IHS Global Insight, ICF International, 

Deloitte, NERA, again, Baker Institute at Rice University, Brookings, they all come to the same spot. 

If I could read you something—NERA actually updated the study 

that it did for the EIA or for the DOE a couple years ago. The last 

page of the Executive Summary has the title, ‘‘U.S. Manufacturing 

Renaissance is unlikely to be harmed by LNG exports.’’ They say, 

‘‘Our analysis suggests that there is no support for the concern that 

LNG exports, even in the unlimited export case, will obstruct the 

chemicals or manufacturing renaissance in the United States.’’ 

At the end of the day we’re also seeing this is in real life on the 

ground. Everybody is winning here. 

Senator BARRASSO. Thank you. Thank you, Madam Chairman. 

The CHAIRMAN. Senator Heinrich. 

Senator HEINRICH. Thank you, Madam Chairman. 

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Mr. Durbin, you’ve heard the claim that U.S. liquid natural gas 

exports could result in the kind of inflated LNG prices that we’ve 

seen in Australia or that Australia has experienced. Could you talk 

a little bit about and explain to the panel why the Australia example is not directly analogous to the U.S. markets, particularly in 

light of the traumatic differences in market size? 

Mr. DURBIN. Sure. I appreciate the question, Senator. I would 

say it would be like comparing apples and oranges, but I’m not 

even sure they’re both fruits. 

If you look at the size of the economy, our NGDP, we’re more 

than ten times greater. Our production of natural gas is more than 

11 times greater. The infrastructure that we have in the U.S. for 

being able to produce natural gas is just—there is no comparison 

which allows us to be able to produce the gas at a much lower cost. 

I think the real important point here is that right now what Australia is experiencing is because they’re exporting literally 50 percent. In fact, more than 50 percent of what they’re producing, 

they’re exporting. Even in, you know, the most—but in the EIA 

projections show that we’ll be exporting only nine percent, between 

nine and ten percent of our production in 2040. 

So I think there really is no comparison to make there and no 

threat that the United States would end up experiencing the same 

type. 

Senator HEINRICH. My understanding is that our market is 

roughly about 40 times the size of Australia, and we’re talking 

about much lower levels of overall exports, correct? 

Mr. DURBIN. That’s correct. 

Senator HEINRICH. Yes. Mr. Smith, I want to turn to you real 

quick. If it were enacted, if this legislation is passed and signed, 

would you expect our bill to change the number of applications for 

exports to non-FTA countries that eventually would be approved or 

disapproved by DOE? 

Mr. SMITH. Well, thank you for the question, Senator. I honestly 

think it would be impossible for me to determine, based on the language, if this is going to impact the number of final applicants. It 

would depend on the applicants, on the conditions at the time, et 

cetera. So I would demur from making any prediction or forecast 

because these are case by case evaluations that we make in a way 

that’s very serious. 

Senator HEINRICH. Right. As you know, our bill also requires 

DOE to publish the list of countries that receive shipments of liquid natural gas from the United States. Do you have a view as to 

whether or not that would be important information for the public 

to have access to? 

Mr. SMITH. We think that more transparency is good. So we have 

endeavored to create a process that’s open, that is transparent and 

that makes all this information available to potential interveners. 

So we think that is important. 

Senator HEINRICH. Great. I’ll have one last question for you, and 

then I will yield back the remainder of my time. 

One of my interests is making sure that we continue to grow jobs 

while reordering our energy infrastructure to recognize the challenges that we have with carbon pollution and climate change. Natural gas has a unique place within those changes. We have limited 

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capacity right now to do electrical storage, for example, but natural 

gas allows us to see them together. Different sources of energy in 

more real time much more effectively than old fashioned coal generation just because of how fast you can ramp up and down the 

turbines. 

Do you want to talk a little bit about your thoughts on how relatively low natural gas prices that we have experienced with current policies will affect the ability to deploy those other sources of 

clean, renewable energies, for example, solar and wind power? 

Mr. SMITH. Well, thank you, Senator. So I’ll focus on the natural 

gas portion. That’s the technology program that I oversee. 

One general comment that I’ll make is that these are long term, 

important and decadal challenges. And so we don’t manage our 

technology programs based on the short term fluctuation or the futures curve. I mean, we think these are important existential challenges, that development of the technologies that are going to drive 

the clean energy economy of the future. 

All of these solutions, from wind to solar to natural gas to enhanced geothermal and nuclear, remain core and important parts 

of the Department of Energy’s technology program. 

That said, we have seen big fluctuations in natural gas prices 

that have come from a variety of sources, and that is something 

that we have to take into account. We look at the importance of 

price when we look at our public interest determination. They impact the price it can have on consumers, on manufacturers and a 

lot of the issues that you’ve heard here on the panel. 

So that is something we’re focused on. We think that it is very 

important. But over time as you look at our research and development program normally in the area that I manage which deals 

with fossil energy but throughout the Department of Energy we 

certainly have a commitment to making sure that we’re pushing 

those technologies here in the United States that are going to be 

important for the clean energy country of the future. 

Senator HEINRICH. Thank you, again. 

The CHAIRMAN. Senator Capito and then Senator Stabenow. 

Senator CAPITO. Thank you, Madam Chair, and I thank the 

Ranking Member, and I thank the witnesses for being here today. 

I’m very pleased to be here and also to be a co-sponsor of Senator 

Barrasso’s bill. Many people think that the shale boom is occurring 

in the Western states, like Senator Barrasso’s home state of Wyoming. But that is not the case, as we know. 

The Eastern United States and my home state of West Virginia 

have been blessed with vast shale gas reserves, and we are just 

discovering, really, how massive they are. 

If I could illustrate the point for a few minutes let me share with 

you a few facts from the December 2014 Department of Energy report on oil and gas reserves in the United States. 

In 2013 West Virginia surpassed Oklahoma to become the third 

largest shale gas reserve state. West Virginia also had the second 

largest discoveries of natural gas reserves behind only Pennsylvania. In fact, a full 70 percent of the 2013 increase in proven gas 

reserves is because of West Virginia and Pennsylvania and the 

Marcellus shale play. 

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We have more than enough gas to power both an industrial renaissance back home in West Virginia and to export liquefied natural gas. Supplying LNG to our friends and allies decreases their 

dependence on often hostile regimes in the Middle East and Russia, 

as we’ve heard from the testimony, and as a result will increase 

our own national security, not to mention a huge economic boon to 

certain areas of the country and certainly my state of West Virginia. 

I’d like to start with a question for Mr. Smith. Just really briefly, 

as you know the Cove Point LNG facility in Maryland has received 

a finding of no significant impact on November 5, 2014. That was 

nearly three months ago. Can you give this Committee an idea of 

when the DOE expects to provide final approval of the Cove Point 

LNG application? 

Mr. SMITH. Thank you for the question, Senator. So under our 

current process we move on these applications in the public determination once they’ve completed the FERC process. That includes 

all of the deliberations that FERC has to make including the final 

notice for rehearing in that process. So we watch these as they go 

through the FERC process. It’s our expectation that that would 

probably be concluding, probably, in the February time frame. 

And so, depending on FERC finishing that process, that would 

allow us to move forward with our final determination. 

Senator CAPITO. Thank you. Thank you. 

As we all know the estimates of what the actual reserves are is 

sort of a moving target. It starts slow. It started slower, and it 

seems to be expanding greatly. 

I like the way Mr. Eisenberg framed it that everybody’s winning, 

but I’m curious to know from you, Mr. Eisenberg and Mr. Durbin, 

as these estimates of the vast resource change, how do your projections on the economic impact they will have and job creation and 

manufacturing resurgence? How does that change in your estimates and how closely are you monitoring that as we look at what 

the vast reserves actually provide? 

Mr. EISENBERG. Our policy, and frankly the will of the manufacturers that I speak for, is to have a stable, secure and consistent 

supply of natural gas and so because we use it not only for electricity but also as a feed stock. 

Senator CAPITO. Right. Right. 

Mr. EISENBERG. For the many things we do. That’s a lot of what 

I do for a living. That’s basically, you know, we need to keep an 

eye on policies that are coming out of Washington, the states and 

places like that to make sure that manufacturers can still continue 

to do what they do. And so, obviously, yes, the supply matters significantly. 

We are now staring at a situation where EIA every single year 

tells us we have more and more and more. 

Senator CAPITO. Right. 

Mr. EISENBERG. And so we’re very, very optimistic and continue 

to be optimistic. 

Senator CAPITO. Okay. Mr. Durbin, do you have a response to 

that? 

Mr. DURBIN. Yes, and I’ve got it in my written testimony, a chart 

that EIA puts in there for showing the difference in the projections 

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on reserves from 2009 through today and I mention that. And 

again, the point is it’s dynamic. 

Senator CAPITO. Right. 

Mr. DURBIN. And what we’re saying every year, it’s increasing. 

But I think what’s really important about this—even this morning 

EIA put out a new paper, a new report, or I should say a statement. I’m talking about the vast increases in ethane crackers and 

propane facilities. 

Senator CAPITO. Right. 

Mr. DURBIN. All driven by these natural gas liquids that are 

being produced with these greater reserves. 

Senator CAPITO. Right. We’re seeing that in West Virginia certainly. I should mention that the Brazilian chemical manufacturing 

company, Odebrecht Braskem, is looking to site a major cracker in 

West Virginia which will have major residual economic benefits to 

that region, and hopefully a resurgence of our chemical industry 

which has shrunk quite a bit over the last several years because 

of the usage of the natural gas as a feed stock. 

You know, I understand, Mr. Smith, just quickly when you’re 

looking at these wells, I think my time is up and I know we’re 

under. As a good former House member I know that I should quit 

when the red light comes on, so thank you. [Laughter.] 

Senator CAPITO. I’ll learn. I’ll learn to talk through it eventually 

I’m sure. [Laughter.] 

The CHAIRMAN. We like that part of it, Senator Capito. You are 

more than welcome to this Committee. With that we’ll turn to Senator Stabenow and I thank you. 

Senator STABENOW. Well, thank you, Madam Chair. You know, 

this is a big deal here. We have this great new resource for us in 

America that’s giving us an edge that we haven’t had in a long 

time in other areas, and how we make this decision is really, really 

important. 

I appreciate very much different states, different perspectives, 

but this is a big deal. And I want to first say to Mr. Smith, thank 

you for DOE not only taking seriously the need to move forward, 

but understanding that you need to update your study on economic 

impact for America and the fact that you are doing that. I don’t 

know why we wouldn’t wait for that to happen if we want to make 

sure we’re doing this the right way. 

So, but I’m going to thank the Secretary and thank you for doing 

that. 

We know jobs are created when we build export facilities, right? 

But we also know, according to the Charles River Associates, using 

natural gas to increase American manufacturing output is twice as 

valuable to the overall economy as just jobs in general and creates 

eight times more jobs than exporting. So I don’t know why we are 

not very concerned about what Mr. Cicio is saying here. 

You’re the end user, right? You’re the guys that buy it. You’re 

here, and you’re buying it for industrial consumers. 

We also have a whole lot of consumers concerned about heating 

oil and costs and so on. So the consumers, as you said, are taking 

all of the risks on this. I’d like you to expand a little bit more on 

this from the standpoint of leveraging this great resource. I get it 

from an oil and gas standpoint. You want to sell to the highest 

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user, price. I get that. China says we’ll take it for $16 rather than 

American producers at $4 or $5, and I get that. But from an American standpoint, what I’m hearing, Mr. Cicio, when you’re saying 

that, China buys it for $16 last year and then turns around and 

subsidizes it so their folks pay $1.78. So now they’re paying $1.78 

and you’re paying $16. 

How is that good for American jobs? I’m desperately concerned 

about manufacturing jobs and getting that eight times leverage 

here for America. I don’t want a China first policy which I’m afraid 

this is. I want an American first policy. 

So if you could speak to that, and then also on Australia. To me 

it’s not the size of the country, it’s how the government handled the 

issue which is exactly what this bill does. This is Australia-like in 

terms of the bill, and I am very concerned. 

I appreciate differences, but I have to say, to me and history, 

folks are going to look back at this and decide what were we doing 

here in terms of Americans and American jobs? 

Mr. CICIO. Well, thank you for that question. When we come to 

this issue we are not thinking short term about and particularly 

looking at the NYMEX and seeing three dollar prices out for the 

next several years. That is not the point. We are looking out long 

term. 

And there’s references to how much gas we have, okay? Now we 

look at ten years out. And when we look at the EIA technically recoverable resources, we have 58 year supply. We don’t have 100 

year supply. 

So, in terms of jobs, you are correct. We can take that gas and 

create eight times more permanent jobs than if you export that gas. 

We recently looked at the permanent jobs created by the export terminals. Great. Any job is a good job, okay? Make no mistake. But 

construction jobs are short term. These terminals, the seven terminals first up, create 1,890 permanent jobs. When that gas goes offshore, it’s gone. Okay? 

All we’re doing here is—let’s emphasize that we need to be looking long term. Each approval puts new demand on the marketplace 

that will, every study says the same thing, increase the price of 

gas. And it will increase the price of electricity. 

We cannot forget that there’s two parts. We can understand that, 

as I said earlier, manufacturing is subsidized in these countries 

that we are competing with, the real world. 

And so we have to be sensitive. It’s not just the price that we’re 

paying here in the United States that matters to manufacturers 

who compete around the world. So we need to come to this with 

great care. 

Now for those of you who feel that we never have to worry about 

affordable supply of natural gas then you should be all for putting 

in place the full implementation of the Natural Gas Act that has 

these cautions, that ongoing review of these terminals. These applications monitoring and the DOE having a requirement to revisit 

that and be sure that it’s not impacting the economy because if you 

feel we have so much gas then you know then that trigger will 

never happen. So you should be supportive and not afraid of fully 

implementing the Natural Gas Act. 

The CHAIRMAN. Senator Portman. 

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Senator PORTMAN. Thank you, Madam Chair. I appreciate your 

having this hearing today, and thanks to the witnesses for giving 

us some great testimony. I represent Ohio which is a state that 

didn’t used to be viewed as a great natural gas producer. Now we 

are, thanks to the Marcellus shale find and also Utica, most significantly, Utica right now. 

We’re also a great manufacturing state, and we’re proud of that 

heritage. 

I appreciate the fact that the National Association of Manufacturers is here supporting this bill. The Chamber of Commerce supports this bill. I support this bill. I’m a co-sponsor now, because I’ve 

looked at all the alternatives. I think this is the best balance. 

To Senator Stabenow’s point, DOE does have the ability to review these plans and approve or disapprove based on the impact 

to the American economy. And that’s in this legislation. It’s a balanced approach. And again, that’s why so many manufacturers are 

supporting it. 

Also I will tell you Ohio does a lot of manufacturing for facilities 

including LNG export facilities. I noticed in your testimony this 

morning you talked about Chart Industries, who testified in the 

Ways and Means Committee, an Ohio-based manufacturer that’s 

involved in the LNG supply chain. It’s going to help us with the 

manufacturing as well, but I do think it’s important that we have 

a balance in the legislation. 

I’m really interested in the legislation because of a broader interest that I have. I think this regulatory regime we have in this 

country is putting us behind in so many ways. Back in the good 

old days you could get a green light to produce something, make 

something, move forward with a project in the United States of 

America pretty quickly. Now we’re ranked 41st in the world in the 

dealing with construction permit category by the World Bank. 

We’re getting worse. Other countries are getting better. Germany 

is something like number eight. South Korea is something like 

number 12. Capital is flowing to different places around the world 

and not coming here because of the time it takes to permit something. 

Yesterday I introduced legislation with Senator McCaskill that 

we also introduced last year that’s bipartisan, a balanced approach 

to how do you get at some of this permitting. 

Senator King is a co-sponsor of that legislation. He’s got an incredible background in this having been a governor, but also in the 

private sector dealing with permitting. 

What I like about this legislation is it doesn’t take away DOE’s 

approval authority, but it does say you’ve got to do it within 45 

days. So it’s a certainty. 

I appreciate what Mr. Smith said today about the fact that this 

legislation can be implemented by DOE. That it’s enough time 

given the run up to that to be able to understand whether this is 

an appropriate project or not. 

The legislation that we introduced will help more broadly. This 

legislation is specifically with regard to LNG exports, but I think 

it’s part of a bigger effort we’ve got to undertake in this Congress 

and, by the way, consistent with the 2006 and 2012 transportation 

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bills. Our legislation pretty much mirrors that in terms of how the 

permitting and how the litigation reforms work and so on. 

So, Mr. Eisenberg, let me ask you a question. Can you speak 

some more on the importance of the requirement in the bill that 

DOE does approve or deny these pending permits within the 45 

days of a completed NEPA review? Again, Mr. Smith has indicated 

to you he could live with that. I assume you would agree that a 

deadline like this gives DOE ample time to review the application, 

but also is giving investors some certainty that this project is actually going to be completed. Is that correct? 

Mr. EISENBERG. That’s absolutely correct. Thank you. We poll 

our members very regularly. And I want to be clear about who we 

represent. We represent 14,000 members, and that is small manufacturers, medium sized manufacturers and large and energy intensive manufacturers that are also represented by Mr. Cicio’s group. 

On balance, we are for regulatory certainty for free trade. Regulatory certainty is actually the number one priority of our membership right now as we poll them quarterly. It came up the most. It 

was the most frequently cited answer. 

There are two types of regulatory certainty. There’s regulatory 

certainty on the front end making sure the regulations that are put 

in place that are new are reasonable, and there’s regulatory certainty on the back end to make sure that when you apply for a permit you can get it. 

Your legislation that you recently introduced, the legislation in 

the RAPID Act in the House, these mirror all sorts of other legislation and laws that are in place at the states at the federal level 

that would impose a deadline or shock clock or something like this 

that say you can please, please uphold the law but do it in a quick, 

expeditious fashion. That is the closest thing to what our policy at 

the NAM wants on this which is just a quick up or down decision 

on an export license. 

Senator PORTMAN. Let me ask another question to you, Mr. 

Smith and anybody else who wants to chime in. 

I think there is some misunderstanding. And again, I really appreciate the leadership Senator Barrasso and Senator Heinrich 

have brought to this. There is some misunderstanding that this is 

the only permit that’s needed, but the LNG export application is 

not the only federal permit. What other federal permits are you 

aware of that projects like this are required to get? And is that in 

addition to any local or state permits that might also be required? 

Mr. Eisenberg or Mr. Durbin or anybody else? 

Mr. EISENBERG. So sure. Like I said, you have to run a gauntlet 

to get these things. It takes about two years before you even prefile to scope out the site and all of these kinds of things. Then you 

have to go through NEPA which on average, I believe, takes about 

three and a half years by recent studies by the government. It can 

take longer. It can take less. 

But you have all of that time that you have to then have basically, have every single agency check the box and make sure that 

everything is compliant with environmental laws, with economic 

interests. That is part of the NEPA process. You do examine the 

economic impact. 

And then you get a final decision. So and once you get that—— 

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Senator PORTMAN. By the way, are there other deadlines associated with those permits? 

Mr. EISENBERG. On NEPA, absolutely not. There actually are 

none, and you can actually sue on it for it falls under the six year 

civil statute of limitations. So you can sue, basically, forever to 

delay these things internally. That’s part of why the Senate is debating Keystone XL right now. 

Senator PORTMAN. Okay, and with regard to state and federal 

permits? Mr. Durbin or Mr. Smith or others who want to chime in? 

Mr. DURBIN. Absolutely. The Cove Point in Maryland, Dominion, 

is the perfect example where, in addition to everything they’re 

doing at the federal level, there are many state permits they have 

to get as well. 

Senator PORTMAN. My time is expired. I appreciate the indulgence, Madam Chair, and I appreciate your testimony today, gentlemen. 

The CHAIRMAN. Thank you, and we turn to Senator Hirono. 

Senator HIRONO. Thank you, Madam Chair. Senator Heinrich 

asked Mr. Smith a question regarding if we could create administrative or regulatory certainty in the time frame for approvals that 

wouldn’t we expect more applications, and Mr. Smith didn’t want 

to reply. 

But I’d like to ask the other panelists whether you think, in very 

brief answers, please, whether you think there would be more applications if we create certainty as this bill does. 

Mr. DURBIN. I don’t believe the number of applications is going 

to be affected by the timeline. It’s going to be affected by companies 

that believe they were going to be able to get the financing, be able 

to line up customers. Again, these are very long term, very expensive propositions. 

So, I think those that are moving forward, knowing that there 

is some certainty at the end, after a very long, extensive and again, 

but a predictable process at FERC. By the way, during that entire 

FERC process DOE is one of the cooperating agencies, so they’re 

a part of that effort as well. 

Senator HIRONO. Just for clarification, it sounds as though the 

FERC process is a much longer process than what DOE has to do 

once FERC approves. 

Mr. DURBIN. Indeed. 

Senator HIRONO. Is that correct? 

Mr. DURBIN. It is a longer process, but DOE is part of that process. And to DOE’s credit during that—this entire time, not on a 

case by case basis, but they have been engaged in the studies that 

have been raised several times here with NERA to look at the 

broader national interest, the economic impact and those are ongoing. 

So that’s why our feeling is having gotten through the FERC 

process they’ve got the basic, you know, they’ve got the 

foundational items they need, at that point, to then in a very timely and specific way, make a determination. 

Senator HIRONO. So I think the rest of you will agree that it’s 

the FERC process that’s really the big question mark, and you 

wouldn’t expect additional or increased applications as a result of 

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this bill. I don’t want to open a can of worms, but are you okay 

with the FERC process? 

Mr. DURBIN. Again, I’ll speak for ANGA. We believe that the end 

for the companies that we’ve worked with. As I’ve said, it’s a long, 

expensive, comprehensive process—but it’s a predictable process. 

Senator HIRONO. Okay. 

Mr. DURBIN. It’s one they’re familiar with and so there have not 

been big complaints about the FERC process. 

Senator HIRONO. Thank you. Let’s move on. 

I do have one note of caution though about exporting natural gas, 

because it has to do with our ability to predict what is going to 

happen. After all about ten years ago we thought we would actually be importing natural gas, so it gives me pause. 

Also a state like Hawaii, where we’re looking to import liquid 

natural gas, I would love for the industry to help us figure out how 

we can do that and meet domestic needs in a cost reasonable way. 

But that’s not for this hearing. 

I understand that the extraction of gas does create a byproduct, 

the methane, and that there are methane leaks, and methane is an 

extremely potent greenhouse gas that contributes to climate 

change. So I would like to ask this of Mr. Durbin. Assuming that 

LNG exports increase and therefore there will be more extraction 

activity, are there efforts by gas producers to reduce methane gas 

emissions during the production process? 

Mr. DURBIN. Thank you, Senator, and I’m glad you asked the 

question because the answer is an emphatic yes. Now let me tell 

you what’s already happened. 

If you just look at EPA’s own data, so this is nothing from the 

industry, on methane emissions from natural gas producers. If you 

go from 2006 which was kind of a peak to the emissions we saw 

in 2012, okay? The reduction of methane just from natural gas producers was 39 and a half percent. Now the dates are important 

here. 2006 was before the shale gas revolution, so in those six 

years we’ve added thousands of wells. We’ve increased production 

by over 25 percent during that time. Yet methane emissions from 

natural gas production have been reduced by 39 and a half percent, 

and that’s going to continue because it is in our interest to capture 

the methane. Methane is natural gas. That’s what we’re wanting 

to sell. 

It’s also just the continued improvements in efficiency and innovation in technology in the industry that have us today where the 

most productive natural gas well in the country, in Northern Pennsylvania, is producing 30 MCF a day. Ten years ago the most productive well in the United States produced only five. So the numbers are just for relative scale. We are producing a heck of a lot 

more gas and at the same time methane emissions are plummeting 

within our industry. 

Senator HIRONO. So I take it that you would not be in favor of 

EPA of regulating methane emissions from this activity? 

Mr. DURBIN. Well, to be clear, it is regulated by EPA under current NSPS through volatile organic compound. So—the current regulations, you know, we’re having all these reductions under current 

regulations. I would argue that EPA does not need another new 

regulation. 

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Senator HIRONO. Thank you. I think my time is up. 

The CHAIRMAN. Thank you, and we are now going to turn to Senator Gardner. I will be excusing myself from the Committee right 

now. We’re going to start votes here very shortly, and Senator 

Cantwell will be here for a period of time. 

We want to make sure that we get through all members and 

have an opportunity before the panel, so it’s going to be a little bit 

choppy from here on out. I apologize that I won’t be able to hear 

your further comments, but please know how much I appreciate 

what you have provided the Committee today. This is a very important issue. I think we recognize that. And again, I appreciate the 

level of cooperation that we have had. I think we have a compromise bill that will be helpful to the country. 

With that, I will turn to Senator Gardner, and he will be followed by Senator Franken. 

Senator GARDNER. Thank you, Madam Chair, and thank you 

also, Ranking Member Cantwell, for the hearing today. Thanks to 

our witnesses for your time. 

Over when I was in the House of Representatives we introduced 

H.R. 6, the Domestic Prosperity and Global Freedom Act, that we 

passed with overwhelming bipartisan support. One of the things 

that made that bill so successful was many of the statements made 

today by the witnesses including conversations that we had with 

people like Dr. Orba ́n from Hungary and others who recognize the 

national security implications of a strong and vigorous opportunity 

for the United States to share in our energy security with our partners around the globe. 

So today we are talking about Senate bill 33, a very short, 

straight forward piece of legislation, granting approval for LNG export applications already pending or languishing, depending on 

how you look at it, at the Department of Energy. It’s not too often 

that we share in these kinds of opportunities where you have a bipartisan bill that will create jobs, create energy security, and add 

to our national security, all at the same time. Something that I 

wish we could do more of. 

I do believe this has the opportunity to create a number of American jobs across this country including in Colorado, my home state, 

one of the nation’s leading producers of both oil and natural gas 

and renewable energy as well. 

Mr. Smith, a question for you just to start with. 

Dr. Paula Gant with the Department of Energy testified last 

Congress, the 113th Congress, that the Department of Energy is 

keenly interested and invested in the energy security of our allies 

and trading partners. Do you think American LNG exports add to 

the energy security of our allies? 

Mr. SMITH. Well, thank you for the question, Senator. So we look 

at a variety of factors including international aspects. I would say 

that currently the fact that we are importing less LNG than we 

had expected is already impacting global markets and that’s benefitting our allies and trading partners. The fact that U.S. producers 

are potentially out negotiating contracts in advance of any terminal 

being built has an impact on global markets. So we think that all 

those things are positive, and those are things that we explicitly 

care about and note in our applications. 

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Senator GARDNER. Okay. Reading between the lines it is clear 

that you believe the Department of Energy believes that exporting 

LNG adds to the energy security of our allies? 

Mr. SMITH. We believe it has an impact, yes. 

Senator GARDNER. Mr. Koranyi, you believe in the same position, 

correct? 

Mr. KORANYI. Absolutely, and that actually goes back also to 

Senator Barrasso’s question as far as the future is concerned. So 

we have this past benefit of diverting energy supplies that were 

supposed to come to the United States. 

Also looking into the future, if you look what the traditional wisdom says that because Asian gas prices are higher most of the supplies will go to Asia. I’m not really sure about that. 

If you look at Cheniere’s contracts, a bulk of those actually are 

going to European countries, European natural gas suppliers. They 

will provide gas to Spain, and they will provide gas to the UK. 

Asian gas prices, since last February, came down by 47 percent. 

So the gap between European and Asian prices is not that big. If 

there is another cutoff from Russia through Ukraine, then that 

very quickly could send up European natural gas prices. So to sum 

up, yes. 

Senator GARDNER. Mr. Smith, again, you, in response to the 

question by Senator Barrasso you had mentioned that, or I believe 

maybe it was the Chairman, you had said that the 45 day timeframe in S. 33 was workable. Is that correct? 

Mr. SMITH. That’s our view. We could comply with the law. 

Senator GARDNER. Do you have the same view about Representative Johnson’s bill in the House that moved through the House yesterday? I think it’s a 30 day timeframe. 

Mr. SMITH. I haven’t compared the details, but overall I can say 

that the 45 day limit in this bill is something that we could comply 

with. 

Senator GARDNER. Okay. Mr. Durbin, Dr. Daniel Yergin testified 

in front of Congress that the United States is demand constrained, 

not supply constrained. This was testimony last Congress, again, 

when it comes to natural gas. In Colorado on the Western Slope 

the Piceance Basin has been suffering due in part to the overabundance of natural gas supplies. Would you agree with Dr. Yergin 

that the U.S. is demand constrained and not supply constrained? 

Mr. DURBIN. Absolutely, and if anything it’s a matter of infrastructure that we need to be focusing on that. 

Senator GARDNER. If we are demand constrained, as you said 

that we are, does that lend itself to having too much supply and 

therefore drive down investment in new production? 

Mr. DURBIN. Absolutely. 

Senator GARDNER. And is that something S. 33 could achieve, as 

well as giving our production investment opportunities a chance to 

once again flourish and make new investment? 

Mr. DURBIN. Yes, by making clear that we have a new, robust 

demand outlet here. It will provide consistency. It will provide the 

incentive and the motivation for the industry to continue the production not only in the gas for exports, but for the natural gas liquids and everything else is going to drive the manufacturing here 

in the United States. 

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Senator GARDNER. Well, I too want to keep in line with the spirit 

of Senator Capito and the House coming over here, when the red 

light comes on. Once again I want to express how important this 

legislation is when it comes to national security. I know last Congress there was significant debate amongst people whose states 

have put moratoriums in place on practices like hydraulic fracturing, who voted for the LNG export bill knowing full well that 

our potential to export LNG is only available because of our opportunities to utilize techniques like hydraulic fracturing. They understand and recognize the importance of an abundant supply of energy that we can share with our allies and what it means for national security. I hope that that continues to be a part of this very 

important debate. 

Senator BARRASSO [presiding]. Thank you, Senator Gardner. Senator Franken. 

Senator FRANKEN. Well, I’ll pick up from Senator Gardner there. 

We’re able to do this because of hydraulic fracturing, and I want 

everyone here to understand who developed that technology and 

who is responsible for that. It’s the taxpayers of the United States. 

Mr. Durbin talked about how in 2009 projections of the supply 

of natural gas going out were so low that the prices were going to 

be very, very high and mentions that now they’re much lower than 

the projections. 

We’re hearing Senators talk about discoveries of reserves of natural gas in their state as if this is just a discovery that happened 

out of nowhere. 

This is because of the taxpayers doing investments in research, 

into three dimensional, micro-seismic imaging done in Sandia National labs. Please listen to this because I say this over and over 

again in this Committee. This whole renaissance in natural gas is 

due to research done by the Department of Energy, paid for by the 

United States taxpayers and projects done with the oil and gas industry in horizontal drilling. 

Understand this didn’t come out of nowhere, and let’s have some 

historical context here. Who paid for this? Who is responsible for 

this unbelievable renaissance? The American taxpayer, and that includes the Minnesota taxpayer. 

Now, do you know how much natural gas we produce in Minnesota, just as an estimate? Mr. Durbin. 

Mr. DURBIN. I am not aware of natural gas production in Minnesota, Senator. 

Senator FRANKEN. Zero. This does us no good whatsoever. This 

does Minnesota no good whatsoever. 

The EIA just says this is going to increase the price of natural 

gas. This is going to increase the price of electricity to every Minnesotan, of heat to every Minnesotan, the cost of operations to 

every Minnesota manufacturer. This does my state no good whatsoever. 

Now I would appreciate it if those from the other states who will 

benefit—the benefits of this, the jobs, the GDP growth and the jobs 

will be very concentrated by sector and region. 

Mr. Durbin, you represent the natural gas producers. I would 

venture to say that your sector will benefit from it the most. Don’t 

you think? 

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Mr. DURBIN. We certainly are benefitting from it, Senator, but I 

would argue with your contention and say that the entire nation 

has been benefitting from this. If we didn’t have this natural gas 

revolution—— 

Senator FRANKEN. The nation has been? 

Mr. DURBIN. If you didn’t have the production, the prices where 

they are, you wouldn’t have manufacturers in Minnesota that 

would be able to take advantage of it. 

Senator FRANKEN. So you should be thanking the taxpayers of 

Minnesota. 

Mr. DURBIN. I don’t think—— 

Senator FRANKEN. Don’t reward them by raising—— 

Mr. DURBIN. I don’t take question with either your contention of 

DOE’s role in helping us get to this point. 

Senator FRANKEN. Okay. I only have a little bit of time, sir. The 

point is there’s no benefit at all for the people of Minnesota in 

sending this abroad. This is what will happen is this will benefit— 

the steel workers are against this. 

At Minntac in Minnesota they mine iron ore and make pellets 

called taconite. They heat those pellets up to 25 hundred degrees 

Fahrenheit with natural gas. This is going to drive up the cost of 

natural gas. 

This is going to hurt Minnesota. This is why the steel workers 

are against it, the United Steel Workers. Manufacturing creates 

eight times as much jobs. Yeah, if you export a natural resource 

the people who produce that natural resource benefit, but it doesn’t 

do anything like the kind of—create the kind of jobs that we, in 

Minnesota, have created because of this technology that we, taxpayers in Minnesota, helped to promote. 

So I just want this perspective. And going forward, I know my 

time is up, but I’ve been here a little longer than Senator Capito. 

So I just want, going forward, for members when they talk about 

this natural gas renaissance to understand where this came from. 

Aside from this subject on natural gas when we’re talking about renewable energy, when we’re talking about all energy, let’s understand the role that research, basic research and applied research, 

have played in our nation in making sure that we are energy independent. 

Thank you. 

Senator BARRASSO. Thank you, Senator Franken. Turning to 

Senator Cassidy let me just remind the Committee and point out 

that the Committee heard concerns about natural gas prices two 

years ago. 

Prices have fallen since then, and the Obama Administration has 

issued three separate studies showing that natural gas prices will 

remain low with LNG exports. The Administration’s most recent 

study shows that prices will remain low even if the Department of 

Energy approves four times the amount of LNG exports that’s already approved, so at least four additional studies have confirmed 

the Administration’s findings. 

Senator Cassidy. 

Senator CASSIDY. Yeah, to speak of the pervasiveness of the benefits of fracking. I have an article right here where Minnesota actually produces much of the frack sand. So the price of fracking sand 

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has increased much to the benefit of Minnesotans and Wisconsins. 

The benefit of this was George Mitchell taking the DOE research, 

but actually commercializing this. He even goes to Minnesota 

which is really good. 

I have a couple questions though. One related to that, one to another. 

In Haynesville this is about jobs. Let me tell you there are families struggling because they don’t have jobs. We know there’s going 

to be a downturn in employment in the oil patch because of the 

falling oil prices. 

I’m interested if we can increase the jobs in natural gas production because of an exportation. Haynesville shale is in North Louisiana, and that play has decreased production because it’s dry gas. 

That’s not what the people want to make petrochemical products. 

Mr. Durbin or Mr. Smith, do you all have an idea of how many 

jobs will be created if we could unshutter those closed down wells 

in places like the Haynesville and begin to ship that dry gas to 

markets that actually want dry gas? Mr. Durbin, any idea of how 

many jobs would be created by that? 

Mr. DURBIN. Well, I don’t have the specifics to that, but I know 

there have been several studies. In fact, NAM had one done with 

PricewaterhouseCoopers that show with expanding natural gas development we could create a million jobs in the manufacturing sector across the country. So there’s no question that by providing for 

these exports you have now a much more certain demand outlet for 

this product, and we’re very fortunate here in the U.S. that natural 

gas prices and oil prices are largely decoupled. 

Senator CASSIDY. So if we increase that production, by the way, 

we’ll also be decreasing the demand for steel pipe which is produced in places like Minnesota, Ohio, et cetera, correct, fair statement? 

Mr. DURBIN. We’d be increasing demand, yes. 

Senator CASSIDY. Absolutely. Mr. Smith, it seems this has been 

a great hearing, but I have a perception, it may be false, but 

there’s a certain kind of languidness about the approval of some of 

these permits. Now that may be a perception. I, myself, I’m happily 

married which means I speak of my perceptions, not of what I 

know, okay? 

So that said, when I look at the FERC and DOE processes FERC 

says I understand under DOE there’s a statement that they want 

to look at the life cycle, the increase in life cycle methane emissions 

if exportation requires increased production of gas. FERC says in 

their approval process they cannot ascertain that, therefore they do 

not consider it. 

The fact that DOE would consider something which FERC says 

is an imponderable to me makes me wonder if they’re just, before 

I throw all the bells, that they’re almost inviting litigations by 

those who wish to retard this process. So why would DOE consider 

something which FERC considers an imponderable? 

Mr. SMITH. Well, thank you for the question, Senator. For aside, 

I certainly challenge the characterization of ‘‘languid’’ as a process. 

The most recent authorization that we issued, we literally issued 

one day after the FERC process was completed. 

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Senator CASSIDY. As I would say to my wife, I apologize. [Laughter.] 

Mr. SMITH. Duly noted. Thank you, Senator. So in terms of the 

FERC process and DOE/FERC process, I think it’s important to 

consider the fact that we are looking at two very different considerations, two very different decisions. 

The job of FERC is to determine if the plant itself can be both 

safely built and the print of that plant itself is consistent with the 

values of safety and environmental sustainability. So that’s what 

FERC looks at. Can the applicant build that terminal on that footprint? 

Senator CASSIDY. Don’t you also consider the life cycle, if there 

would be an increase in the life cycle release of methane or greenhouse gases relative to increased production? 

Mr. SMITH. So that is what the Department of Energy looks at, 

and the Department of Energy is looking at giving the applicant 

the ability to actually export the molecule. 

Senator CASSIDY. Correct. 

Mr. SMITH. We have to look at all the things that would be impacted, all the things will be part of a public interest determination 

of giving the applicant that ability to export that molecule. And 

that includes a lot of things that are surrounding—— 

Senator CASSIDY. But particular consideration is going to be full 

of assumptions. For example, Mr. Durbin has pointed out since 

2006 there’s been a dramatic decline in emissions. So you have to 

predict what in 2022 will be the rate of emissions. 

Mr. SMITH. Right. 

Senator CASSIDY. You also have to guess the market. You also 

have to guess the transportation of its life cycle and how much is 

through pipeline and how much is through whatever. 

So it seems, again, an imponderable. But the fact that it’s a variable with lots of variables makes me wonder why is it in there? 

Mr. SMITH. Well, Senator, you’re actually very nicely framing the 

challenge of this incredibly important public interest determination. These are decadal investments. The decisions that companies 

make now in terms of spending billions of dollars to build plants 

are going to have an impact on our economy, on our environment, 

on job creation, on a lot of things we care about for a very long period of time. In its very nature a lot of that does involve a lot of 

diverse views. 

I hear from Mr. Cicio’s members. I hear from Mr. Durbin’s members. And they have different views. 

Senator CASSIDY. But that—— 

Mr. SMITH. But we do have to consider a lot of different—— 

Senator CASSIDY. But really we don’t know which of those is correct. So if we have a variable in which we cannot possibly know 

with any kind of the r square, the statistical analysis of the correlation is going to be huge. 

Mr. SMITH. Right. 

Senator CASSIDY. And so therefore you are picking a number 

which is subject to political considerations. Do we want to approve 

this or not? I think that would be the fear. And we can prove one 

which has a big number of methane release or one that says no, 

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this is the glide path. We think it will come to down to your lower 

number. 

Mr. SMITH. Well, Senator, our job is to make good public interest 

determination. And one thing that I’d point everybody to is when 

we issue an order it’s not a sticky we put up on the wall that says 

yes or no. We actually issue a very complex document that has to 

take into consideration all of the arguments that have been made 

by all of the different stakeholders that intervene in this process. 

They include Mr. Cicio’s members. They include Mr. Durbin’s 

members. They include all of the diverse ideas that we’ve heard 

here in this very hearing. 

Our goal is to write an order that’s clear, that’s consistent with 

the letter and spirit of the law and that’s going to withstand the 

scrutiny that it’s sure to receive. 

Our goal at the end of the day is that should we approve a particular applicant that they can look at that order and that applicant has the confidence and go and spend the multiple billions of 

dollars that it takes to build that terminal because they can see 

that we’ve had a thorough process that’s consistent with the letter 

and spirit of the law. 

It does require us to think about assumptions, but make those 

assumptions clear and explicit in a way that withstands scrutiny. 

Senator CASSIDY. Well, I’m out of time, way over. I yield back. 

Thank you. 

Senator BARRASSO. Senator King. 

Senator KING. Thank you, Senator. First I want to say I’m good 

with regulatory reform. I like bills that generally lay out clear regulatory guidelines and time. I’m also good with natural gas. 

So good with it, in fact, that I don’t want to blow an advantage 

that this country has. I have been to factories, gentlemen, and 

looked in the eyes of people who have lost their jobs to Asia, to 

other parts of the world, to Mexico. And they looked at me and 

said, how did you let them ship my jobs away? 

We have no advantage on wages. We have no advantage on labor 

protections. We have no advantage on environmental protection. 

We have today an advantage on energy costs. I cannot understand 

this discussion that will inevitably lead to higher energy costs. 

Mr. Eisenberg, I can’t understand an organization called the National Association of Manufacturers supporting this program. This 

bill, maybe. I understand because this is really a regulatory bill. 

But the larger issue is what really concerns me. Right now if you 

export, if we export to China, add in the cost of transportation, the 

cost of liquefication, un-liquefication, you’re talking $10 dollars. 

China is paying $12 or $13, so we’re giving them a 30 percent cut 

in their energy cost. I just don’t get it. 

Now Mr. Durbin, you testified that you thought projected out 10 

years, 20 years, 30 years, I think you said 2040, nine percent would 

be all we’d be talking about. Would you accept a friendly amendment to this bill that the limit that the presumption of the public 

interest would be reversed if the export was more than nine percent of domestic production? 

I believe you when you say it, but I subscribe to President Reagan’s admonition, ‘‘Trust, but verify.’’ I trust the industry when 

they said, oh, we only want us to do just a little bit. It’s not going 

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to really affect the price that much. And there’s endless supply. 

And it’s all going to happen. 

Okay, fine. Let’s put it in writing. Ten percent I’ll go with. Nine 

percent is what you said. So maybe that’s where we ought to start 

the negotiation. 

I think this moment will be looked back at, at a time when 

Americans say what were you thinking when we have, what I call, 

America’s second chance at manufacturing, but we’re going to give 

it away. Mr. Durbin. 

Mr. DURBIN. Sure. 

Senator KING. There’s a question in there somewhere. 

Mr. DURBIN. Yeah, and I’m happy to answer it. I think the problem is we’re posing a question as an either/or that we can only 

have this abundance of natural gas domestically for our manufacturing or we can export it. We have both. We can do both. The 

issues that certainly manufacturers in New England need to be 

concerned about is pipeline constraints, getting those pipelines. 

And I—— 

Senator KING. Oh, that’s a separate issue. 

Mr. DURBIN. I know you’re a very strong supporter of that, and 

I appreciate that. 

Senator KING. Our natural gas prices were the highest in the 

world last winter, the world. 

Mr. DURBIN. Exactly. So I mean—— 

Senator KING. That’s a pipeline problem. 

Mr. DURBIN. But if you look at the estimates, not industry estimates, but the government estimates about how much production 

is going to increase, what demand is going to—how demand is 

going to increase, going out to 2040. We are going to be outstripping consumption and demand here all along. 

Senator KING. That’s fine. All I’m saying is put it in writing. 

Mr. DURBIN. But I think the other aspect of—— 

Senator KING. Accept a cap on the export so that we don’t end 

up with Australia. We’re producing 75 BCF a day. In the queue is 

38 BCF a day for export. That’s more than half, and that’s what 

you said was the problem. You said, oh that will never happen, 

that’s Australia. 

But that’s what worries me. If there’s no limit here and there’s 

no definition of the public interest in the statute that these guys 

are administering, I’m just saying let’s define it. 

Mr. DURBIN. I’d say the limit is being provided by the global 

markets. We’re not going to be exporting ten, 15, 20, whatever, or 

the—— 

Senator KING. Why not if they’re going to pay 12 or 15 over 

there, why wouldn’t we? 

Mr. DURBIN. Because the markets—if we’re going to be exporting 

that much it’s going to be because gas prices here are so low and 

we have enough to provide it to those markets that they’re willing 

to pay. 

I mean, you can see the global market dynamics right now are 

going to influence the number of facilities that are going to be 

built, and that’s always been the case. 

Senator KING. Mr. Cicio, what do you think? 

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Mr. CICIO. Look at Australia, alright? So, okay, the scale is different. I agree with what was said earlier, but the government did 

not provide the necessary safety nets. The resources that they have 

in Australia were contracted out under long term contract to ship 

LNG offshore to customers at higher prices. 

Senator KING. And once you do that you’re locked in. 

Mr. CICIO. Those are—yeah. And so the reserves were not available for the Australian consumer anymore, and that’s why prices 

went up and the Australian consumer now is being asked to pay 

an equivalent net back price to that LNG price that they would sell 

to Japan or South Korea or China. And so, again, think long term 

here. 

Senator KING. That’s—— 

Mr. CICIO. Again if there’s lots of resources everybody should 

support putting the necessary full implementation of the Natural 

Gas Act in the safety net for the consumer. 

Senator KING. Well, thinking long term it seems to me a simple 

solution is to cap the amount of exports as a percentage of domestic 

production. Then you can say, okay, there will be some effect on 

gas prices, but it isn’t going to be catastrophic like it was in Australia. 

There’s one law Congress can’t repeal, the law of supply and demand, and if you increase demand Economics 101 says the price is 

going to go up. So you can’t deny that the price is going to go up. 

That’s the whole point. 

But the question is how far is it going to go up? I realize you’ve 

got to have a price that’s sufficient to call forth the production and 

open the wells and all those kinds of things. I don’t know exactly 

where that number is, but if we take an action here in this Congress to just open the door and end up with an Australia situation, 

shame on us, in my opinion. 

Thank you, Mr. Chair. 

Senator BARRASSO. Well, thank you very much, Senator King. 

And before turning to Senator Daines, I want to, without objection, 

put into the record an article from the Boston Globe by Jay Fitzgerald, December 5th, 2014 outlining the concern with natural gas 

in New England last year related to inadequate pipeline capacity 

to get the gas to where it needed to go. 

Senator KING. Absolutely. I’m fully in agreement with that, on 

that problem. Thank you. 

Senator BARRASSO. Thank you. 

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Senator DAINES. Thank you, Mr. Chairman. I remember back in 

the 70s I was going to high school and in the early 80s when I was 

going to college studying chemical engineering and hearing the concerns about someday we’re going to run out of oil and what that 

might mean to the United States and mean to the world. Here we 

sit today as we’ve shifted from what used to be a scarcity mentality, certainly, on oil and natural gas. Now we’re in an abundance 

mentality. 

The Bakken formation bleeds into Montana. We are seeing firsthand what’s going on with hydraulic fracturing, with oil production, with natural gas production, and I can tell you we would like 

to produce more natural gas in Montana. Our natural gas production has declined for lack of demand, and this intersection of the 

demand and also the transmission issues and the pipeline issues 

that the Senator from Maine was painfully aware of last winter. I 

believe as we move to an abundance mentality, as we gain more 

production which increases the supply chain and pipelines ultimately the person who wins is the American consumer. 

As we’ve seen what’s happened with oil where with the drop in oil prices we’re going to go from $3100 per average household expense of oil to $1900. That’s $1200 a year for the average American 

household as a result of what’s happened here in America and the 

shale play. 

The geopolitical implications are significant. I saw Senator 

Barrasso’s chart. I was struck by the dependency of the European 

nations on Russia for natural gas. 

I remember when I was serving back in the House in the last 

term getting letters from leaders from the European nations who 

were looking to America for energy leadership. How can we now 

start supplying natural gas to Europe instead of the dependence 

upon the Putin regime? So I’m very excited about where this might 

lead to. 

In terms of global competitiveness I was a manufacturing guy for 

years. I had a day job in the private sector for 20 years before I 

came up here. I looked at operations in China. I managed an operation to Asia/Pacific. 

What these mean? Low energy and low natural gas prices and 

the ability to export is great for global competitiveness to bring 

these manufacturing jobs back to America. We can’t underestimate, 

I think, the national security implications as well. This is a very 

exciting discussion. It’s been a great hearing for me. 

But I was struck, Mr. Eisenberg. You made a comment, and I 

guess let’s bring it back to the scope. I’ve been up here at 40 thousand feet. Why are we here in this hearing today? Because we’re 

looking at the permitting process. That’s the scope of this legislation. How do we create more certainty in this uncertain process 

about permitting? Mr. Eisenberg, I believe you said that regulatory 

uncertainty, was it the number one issue? 

Mr. EISENBERG. Currently it is the most cited issue that our 

members would like to see Washington fix right now. 

Senator DAINES. Number one issue of your manufacturers? 

Mr. EISENBERG. Yes. 

Senator DAINES. So I guess with my engineering background I 

look at what problem are we trying to solve here today. I know 

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we’ve been circling the globe on a lot of things in this hearing, but 

we’re looking at regulatory uncertainty, the number one issue for 

manufacturers in jobs here in this country. 

Mr. EISENBERG. That’s correct, and I would take it one step higher. We’re talking about free trade also, right? I mean, this is the 

intersection of two sets of policies. This is energy policy, and this 

is trade policy. 

And to Senator King’s last point, the reason the NAM came out 

the way we did on this and we are not for or against anything. We 

were founded 120 years ago, so the manufacturers could find markets to export to. We believe that you’re either for free trade or 

you’re not, and we are. 

Imposing some sort of delay or cap or something like that would 

stand in the way of exporting just about anything whether it’s a 

Honda Civic or a Bic razor blade or energy, and that is why we’ve 

come out the way we have on this issue which is at the end of the 

day on balance free trade wins. 

Senator DAINES. Well, I think we will have further debates about 

the merits of increasing exports in natural gas or not, but this legislation is about creating a regulatory certainty in an uncertain environment. I think we want to keep the conversation focused there 

because that’s what we’re going to be voting on, on uncertainty and 

the regulatory process. 

Mr. Eisenberg, could you expand, perhaps, on the resources that 

are spent on the exporting permitting process including NEPA and 

how important certainty is for both energy security and the American taxpayer? 

Mr. EISENBERG. So this is, obviously, not an inexpensive process. 

No manufacturer would take on this without knowing it’s going to 

cost you quite a bit both in terms of the upfront costs to actually 

do the environmental studies and all of the research and all the 

background, but also the cost of delay, right? I mean, at the end 

of the day time is money and the longer it takes—the more you are 

spending to not do this. 

So obviously as you said, permitting certainty is what we’re looking for. We’re just looking to make sure that the rules of the road 

are there. That if we comply with them, we get an up or down answer so that we can control those costs and we can expect those 

costs and we know, going in, that there is an end of the road to 

this problem. 

Senator DAINES. Alright. And Mr. Chairman, I too was taught in 

the House you don’t run red lights, so I guess my time is up. 

Senator BARRASSO. Well, I appreciate that, Senator Daines, because in terms of certainty I am certain that the voting has started 

on the Floor of the Senate. And I am certain it is on the Daines 

amendment. It’s being voted on right now, and I’m certain that 

there are certain people on this panel that don’t want to miss that 

vote. 

Thank you very much. I appreciate all of the witnesses for being 

here today. This hearing is adjourned. 

[The bill follows:] 

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105 

[Whereupon, at 11:31 a.m. the hearing was adjourned.] 

mstockstill on DSK4VPTVN1PROD with HEARINGS

mstockstill on DSK4VPTVN1PROD with HEARINGS

(107) 

APPENDIX MATERIAL SUBMITTED 

mstockstill on DSK4VPTVN1PROD with HEARINGS

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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 175 here 93179A.064
109 


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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 177 here 93179A.066
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 184 here 93179A.073
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 185 here 93179A.074
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 186 here 93179A.075
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 187 here 93179A.076
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 189 here 93179A.078
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 190 here 93179A.079
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 191 here 93179A.080
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 192 here 93179A.081
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 254 here 93179A.143
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 258 here 93179A.147
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 259 here 93179A.148
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 260 here 93179A.149
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 262 here 93179A.151
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 264 here 93179A.153
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 266 here 93179A.155
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 268 here 93179A.157
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 269 here 93179A.158
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 270 here 93179A.159
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 271 here 93179A.160
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 273 here 93179A.162
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 274 here 93179A.163
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 276 here 93179A.165
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 278 here 93179A.167
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 279 here 93179A.168
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 283 here 93179A.172
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 284 here 93179A.173
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 285 here 93179A.174
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 286 here 93179A.175
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 287 here 93179A.176
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 288 here 93179A.177
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 289 here 93179A.178
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 290 here 93179A.179
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 299 here 93179A.188
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mstockstill on DSK4VPTVN1PROD with HEARINGSInsert offset folio 300/400 here 93179A.189