II Calendar No. 177 116th CONGRESS 1st Session S. 1064 [Report No. 116–75] 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. Short title This Act may be cited as the Appalachian Energy for National Security Act . 2. Findings Congress finds that— (1) the Energy Information Administration projects that— (A) domestic natural gas production from shale resources will more than double between 2017 and 2050; and (B) continued development of the Marcellus and Utica shale plays in the eastern United States is the main driver of growth in total domestic natural gas production across most scenarios; (2) the Department of Energy has found that— (A) the shale resource endowment of the Appalachian Basin is so bountiful that, if the Appalachian Basin were an independent country, the Appalachian Basin would be the third largest producer of natural gas in the world; (B) with more than $300,000,000,000 of net revenue, 900,000 workers, and 7,500 establishments, Appalachia and surrounding areas account for nearly a third of United States activities in 13 petrochemical industries; and (C) the aggregate revenue growth from commodity chemicals that can be derived from ethane (commonly known as the value chain ) is projected to be $716,000,000,000 between 2018 and 2040; (3) geographical diversity and structural resilience is critical, given that the Department of Energy has found that— (A) 95 percent of ethylene production capacity in the United States currently exists in the States of Louisiana and Texas; (B) this concentration of assets and operations may pose a strategic risk to the economy of the United States as extreme weather events impacting the production of petrochemicals (including plastic resin) on the Gulf Coast can limit the availability of feedstocks to manufacturers across the United States; and (C) in August 2017, many Gulf Coast refineries and petrochemical facilities shut down, which affected 54 percent of United States ethylene production and 36 percent of United States ethylene consumption capacity; (4) there are economic efficiencies and economic security benefits to maintaining all elements of the value chain for ethane and other natural gas liquids in clusters in various geographical regions, provided each cluster includes natural gas production, natural gas processing plants, natural gas liquids fractionation plants, natural gas liquids transportation infrastructure, natural gas liquids storage, and ethane and other natural gas liquids petrochemical infrastructure; (5) there are economic efficiencies to building ethane and other natural-gas-liquids-related petrochemical infrastructure, including storage and distribution systems, within the Appalachian region, because of the close proximity of the region to the industrial Midwest and manufacturers in the Eastern United States that use petrochemicals, such as plastic resins, as manufacturing inputs; and (6) it is a priority of the United States to minimize effects of volatility in any individual market by maintaining— (A) a robust domestic natural gas liquids resource base; (B) the requisite physical assets along the value chain for ethane and other natural gas liquids; and (C) diversity in customers, both domestically and internationally. 3. Study and reports on building ethane and other natural-gas-liquids-related petrochemical infrastructure (a) Study (1) In general Not later than 1 year after the date of enactment of this Act, the Secretary of Energy (referred to in this section as the Secretary ), in consultation with the Secretary of Defense, the Secretary of the Treasury, and the heads of other relevant Federal departments and agencies and stakeholders, shall conduct a study assessing the potential national and economic security impacts of building ethane and other natural-gas-liquids-related petrochemical infrastructure in the geographical vicinity of the Marcellus, Utica, and Rogersville shale plays in the United States. (2) Contents The study conducted under paragraph (1) shall include— (A) the identification of potential benefits of the proposed infrastructure to national and economic security, including the identification of potential risks to national and economic security of significant foreign ownership and control of United States domestic petrochemical resources; and (B) an examination of, with respect to the proposed infrastructure— (i) types of additional infrastructure needed to fully optimize the potential national security benefits; (ii) whether geopolitical diversity in areas to which the ethane and other natural gas liquids will be exported from the producing region would undermine or bolster national security; (iii) the necessity of evaluating the public interest with respect to exports of ethane, propane, butane, and other natural gas liquids, to ensure the potential strategic national and economic security benefits are preserved within the United States; and (iv) the potential benefits, with respect to significant weather impacts, compared to other regions, of locating the proposed infrastructure in the geographical vicinity of the Marcellus, Utica, and Rogersville shale plays. (b) Reports (1) Status reports Prior to completion of the study under subsection (a), the Committees on Energy and Natural Resources and Armed Services of the Senate and the Committees on Energy and Commerce and Armed Services of the House of Representatives, from time to time, may request and receive from the Secretary status reports with respect to the study, including any findings. (2) Submission and publication of report On completion of the study under subsection (a), the Secretary shall— (A) submit to the Committees on Energy and Natural Resources and Armed Services of the Senate and the Committees on Energy and Commerce and Armed Services of the House of Representatives a report describing the results of the study; and (B) publish the report on the website of the Department of Energy.

August 16, 2019 Reported with an amendment