II 

Calendar No. 177 

116TH CONGRESS 

1ST SESSION S. 1064 

[Report No. 116–75] 

To require the Secretary of Energy to conduct a study on the national 

security implications of building ethane and other natural-gas-liquidsrelated petrochemical infrastructure in the United States, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 8, 2019 

Mr. MANCHIN introduced the following bill; which was read twice and referred 

to the Committee on Energy and Natural Resources 

AUGUST 16, 2019 

Reported under authority of the order of the Senate of August 1, 2019, by 

Ms. MURKOWSKI, with an amendment 

[Insert the part printed in italic] 

A BILL 

To require the Secretary of Energy to conduct a study on 

the national security implications of building ethane and 

other natural-gas-liquids-related petrochemical infrastructure in the United States, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Appalachian Energy 

3 for National Security Act’’. 

4 SEC. 2. FINDINGS. 

5 Congress finds that— 

6 (1) the Energy Information Administration 

7 projects that— 

8 (A) domestic natural gas production from 

9 shale resources will more than double between 

10 2017 and 2050; and 

11 (B) continued development of the 

12 Marcellus and Utica shale plays in the eastern 

13 United States is the main driver of growth in 

14 total domestic natural gas production across 

15 most scenarios; 

16 (2) the Department of Energy has found that— 

17 (A) the shale resource endowment of the 

18 Appalachian Basin is so bountiful that, if the 

19 Appalachian Basin were an independent coun20 try, the Appalachian Basin would be the third 

21 largest producer of natural gas in the world; 

22 (B) with more than $300,000,000,000 of 

23 net revenue, 900,000 workers, and 7,500 estab24 lishments, Appalachia and surrounding areas 

25 account for nearly a third of United States ac26 tivities in 13 petrochemical industries; and 


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1 (C) the aggregate revenue growth from 

2 commodity chemicals that can be derived from 

3 ethane (commonly known as the ‘‘value chain’’) 

4 is projected to be $716,000,000,000 between 

5 2018 and 2040; 

6 (3) geographical diversity and structural resil7 ience is critical, given that the Department of En8 ergy has found that— 

9 (A) 95 percent of ethylene production ca10 pacity in the United States currently exists in 

11 the States of Louisiana and Texas; 

12 (B) this concentration of assets and oper13 ations may pose a strategic risk to the economy 

14 of the United States as extreme weather events 

15 impacting the production of petrochemicals (in16 cluding plastic resin) on the Gulf Coast can 

17 limit the availability of feedstocks to manufac18 turers across the United States; and 

19 (C) in August 2017, many Gulf Coast re20 fineries and petrochemical facilities shut down, 

21 which affected 54 percent of United States 

22 ethylene production and 36 percent of United 

23 States ethylene consumption capacity; 

24 (4) there are economic efficiencies and economic 

25 security benefits to maintaining all elements of the 


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1 value chain for ethane and other natural gas liquids 

2 in clusters in various geographical regions, provided 

3 each cluster includes natural gas production, natural 

4 gas processing plants, natural gas liquids fraction5 ation plants, natural gas liquids transportation in6 frastructure, natural gas liquids storage, and ethane 

7 and other natural gas liquids petrochemical infra8 structure; 

9 (5) there are economic efficiencies to building 

10 ethane and other natural-gas-liquids-related petro11 chemical infrastructure, including storage and dis12 tribution systems, within the Appalachian region, be13 cause of the close proximity of the region to the in14 dustrial Midwest and manufacturers in the Eastern 

15 United States that use petrochemicals, such as plas16 tic resins, as manufacturing inputs; and 

17 (6) it is a priority of the United States to mini18 mize effects of volatility in any individual market by 

19 maintaining— 

20 (A) a robust domestic natural gas liquids 

21 resource base; 

22 (B) the requisite physical assets along the 

23 value chain for ethane and other natural gas 

24 liquids; and 


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1 (C) diversity in customers, both domesti2 cally and internationally. 

3 SEC. 3. STUDY AND REPORTS ON BUILDING ETHANE AND 

4 OTHER NATURAL-GAS-LIQUIDS-RELATED PE5 TROCHEMICAL INFRASTRUCTURE. 

6 (a) STUDY.— 

7 (1) IN GENERAL.—Not later than 1 year after 

8 the date of enactment of this Act, the Secretary of 

9 Energy (referred to in this section as the ‘‘Sec10 retary’’), in consultation with the Secretary of De11 fense, the Secretary of the Treasury, and the heads 

12 of other relevant Federal departments and agencies 

13 and stakeholders, shall conduct a study assessing the 

14 potential national and economic security impacts of 

15 building ethane and other natural-gas-liquids-related 

16 petrochemical infrastructure in the geographical vi17 cinity of the Marcellus, Utica, and Rogersville shale 

18 plays in the United States. 

19 (2) CONTENTS.—The study conducted under 

20 paragraph (1) shall include— 

21 (A) the identification of potential benefits 

22 of the proposed infrastructure to national and 

23 economic security, including the identification 

24 of potential risks to national and economic se25 curity of significant foreign ownership and conVerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064

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1 trol of United States domestic petrochemical re2 sources; and 

3 (B) an examination of, with respect to the 

4 proposed infrastructure— 

5 (i) types of additional infrastructure 

6 needed to fully optimize the potential na7 tional security benefits; 

8 (ii) whether geopolitical diversity in 

9 areas to which the ethane and other nat10 ural gas liquids will be exported from the 

11 producing region would undermine or bol12 ster national security; 

13 (iii) the necessity of evaluating the 

14 public interest with respect to exports of 

15 ethane, propane, butane, and other natural 

16 gas liquids, to ensure the potential stra17 tegic national and economic security bene18 fits are preserved within the United States; 

19 and 

20 (iv) the potential benefits, with re21 spect to significant weather impacts, com22 pared to other regions, of locating the pro23 posed infrastructure in the geographical vi24 cinity of the Marcellus, Utica, and 

25 Rogersville shale plays. 


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1 (b) REPORTS.— 

2 (1) STATUS REPORTS.—Prior to completion of 

3 the study under subsection (a), the Committees on 

4 Energy and Natural Resources and Armed Services 

5 of the Senate and the Committees on Energy and 

6 Commerce and Armed Services of the House of Rep7 resentatives, from time to time, may request and re8 ceive from the Secretary status reports with respect 

9 to the study, including any findings. 

10 (2) SUBMISSION AND PUBLICATION OF RE11 PORT.—On completion of the study under subsection 

12 (a), the Secretary shall— 

13 (A) submit to the Committees on Energy 

14 and Natural Resources and Armed Services of 

15 the Senate and the Committees on Energy and 

16 Commerce and Armed Services of the House of 

17 Representatives a report describing the results 

18 of the study; and 

19 (B) publish the report on the website of 

20 the Department of Energy. 


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Calendar No. 177 

116TH CONGRESS 

1ST SESSION S. 1064 

[Report No. 116–75] 

A BILL 

To require the Secretary of Energy to conduct a 

States, and for other purposes. lated petrochemical infrastructure in the United building ethane and other natural-gas-liquids-restudy on the national security implications of 

AUGUST 16, 2019 

Reported with an amendment 


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