[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1720 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 1720
To provide support for energy infrastructure projects in the Indo-
Pacific region, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 18, 2023
Mr. Sullivan (for himself and Mr. Hagerty) introduced the following
bill; which was read twice and referred to the Committee on Foreign
Relations
_______________________________________________________________________
A BILL
To provide support for energy infrastructure projects in the Indo-
Pacific region, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Indo-Pacific Strategic Energy
Initiative Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The United States currently has an approximately 100-
year supply of natural gas in proven reserves.
(2) The Department of Energy projects global consumption of
natural gas to increase through at least 2050, driven primarily
by demand growth in Asia.
(3) United States natural gas production increased by 91
percent from 2005 to 2021. At the same time, United States
energy-related carbon dioxide emissions decreased by 18
percent.
(4) The growth in domestic natural gas production has
resulted in a change from the United States importing a net
566,000,000,000 cubic feet of liquified natural gas in 2005, to
exporting a net 3,539,000,000 cubic feet in 2021. During that
period, crude oil production in the United States more than
doubled.
(5) As a result of the revolution in oil and gas production
technologies, the United States petroleum trade went from its
peak net import volume of 12,549 barrels per day in 2005, to a
net export of 62,000 barrels per day in 2021. At Brent crude
prices, in nominal dollars, this reflects a trade deficit of
about $250,000,000,000 in 2005, changing to a surplus of about
$1,600,000,000 in 2021.
(6) Demand for natural gas is rising in the Indo-Pacific
region, particularly as countries look to make emissions
reductions and transition from higher emissions fuel sources.
(7) According to the International Energy Agency, ``The
number of countries and territories with [liquefied natural
gas] import terminals has grown from nine in 2000, to 42 in
2020.''. Further, the International Energy Agency has found
that ``transition[s] in Asian gas markets [are] even more
important in the wider context of global clean energy
transitions, where natural gas will be required to make a more
flexible contribution''.
(8) Australia and the United States are both important
global energy exporters and thus have a shared interest in
supplying the growing energy demand in the Indo-Pacific region.
(9) Japanese companies have long invested in United States
liquefied natural gas projects and the Government of Japan has
shifted from relying on liquefied natural gas from the Middle
East to liquefied natural gas from the United States.
(10) The People's Republic of China currently is one of the
largest financiers of overseas energy- and greenhouse gas-
intensive projects and the expanding number of infrastructure
projects in the Indo-Pacific region, carried out under the
People's Republic of China's Belt and Road Initiative, is
leading to higher emissions, coercive dependence, and
environmental degradation in the region.
(11) European Union demand for liquefied natural gas is
expected to rise from about 72,000,000 tons per year in 2021,
to more than 110,000,000 tons per year until at least 2030.
(12) United States-produced oil and natural gas has one of
the lowest lifecycle emissions profiles in the world. A 2019
analysis by the Department of Energy found that natural gas
pipelined from the Russian Federation to Europe's electricity
sector has 41 percent higher lifecycle greenhouse gas emissions
than United States liquefied natural gas shipped to Europe. The
World Bank estimates that the flaring intensity of United
States oil and gas production in 2021 was 69 percent lower than
in the Russian Federation.
(13) Between 2009 and 2019, use of United States natural
gas as a feedstock for hydrogen production increased from
143,004,000 cubic feet to 199,050,000 cubic feet, or a 39.2
percent increase. According to the Department of Energy, 95
percent of the hydrogen produced in the United States is made
by natural gas reforming in large central plants. That is an
important technology pathway for near-term hydrogen production
and reducing global emissions.
SEC. 3. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) the United States reaffirms its commitment to
quadrilateral cooperation with Japan, India, and Australia
(collectively, with the United States, known as the ``Quad''),
and that the United States should continue to pursue
strengthening cooperation in the energy sector in light of the
global threats and challenges facing all 4 countries, including
through upstream investments in energy infrastructure and other
investments across the natural gas value chain to enhance
energy security;
(2) the Association of Southeast Asian Nations (commonly
referred to as ``ASEAN'') and its 10 members (Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore,
Thailand, and Vietnam) have worked with the United States
toward stability, prosperity, and peace in Southeast Asia, and
ASEAN will continue to remain a strong, reliable, and active
economic and strategic partner in the Indo-Pacific region;
(3) the United States and the Republic of Korea enjoy a
comprehensive alliance partnership, founded on shared strategic
interests and cemented by a commitment to democratic values,
which includes recognizing the important role of energy
cooperation through the United States-Republic of Korea Energy
Security Dialogue;
(4) the United States and Japan also enjoy a comprehensive
alliance partnership, which is founded on shared strategic
interests and cemented by a commitment to democratic values,
including recognizing the important role of energy cooperation
and maintaining an enabling regulatory environment to
facilitate continued and increasing liquefied natural gas
supplies through the United States-Japan Energy Security
Dialogue;
(5) the United States has economic, national security, and
domestic interests in assisting allies and partners in Indo-
Pacific countries to reduce greenhouse gas emissions and
achieve energy security through diversification of their energy
sources and supply routes;
(6) the Group of Seven (G7), which includes both the United
States and Japan, recognized the important role of energy
cooperation and that ``investment in the gas sector can be
appropriate to help address potential market shortfalls''
through the G7 Climate, Energy and Environment Ministers'
Communique; and
(7) the United States should not create unnecessary
domestic obstacles to exporting liquefied natural gas and
impose restrictions on the international financing of liquefied
natural gas infrastructure abroad.
SEC. 4. STATEMENT OF POLICY.
It is the policy of the United States--
(1) to advance United States foreign policy and development
goals by assisting allies and partners of the United States in
the Indo-Pacific region to decrease their dependence on energy
resources from countries that use energy dependence to coerce,
intimidate, and influence other countries;
(2) to develop strategies to counter competition from the
Russian Federation and the People's Republic of China to
protect the energy and national security of the United States
and the energy and national security of allies and partners of
the United States in the Indo-Pacific region;
(3) to support free and open trade in clean energy products
and promote the continued development of lower-emissions energy
fuels and technologies in the Indo-Pacific region;
(4) to improve free, fair, and reciprocal energy trading
relationships with allies and partners of the United States in
the Indo-Pacific region;
(5) to promote the energy security of allies and partners
of the United States in the Indo-Pacific region by encouraging
the development of energy infrastructure and accessible,
transparent, and competitive energy markets that provide
diversified sources, types, and routes of energy;
(6) to encourage public and private sector investment in
energy infrastructure projects in the Indo-Pacific region;
(7) to engage and lead on international emissions
reductions through the export of United States-produced fuels
and emission-reduction technologies and provide access to
modern and reliable energy services that promote economic
development;
(8) to help facilitate the export of United States energy
resources, technology, and expertise to global markets in a way
that benefits the energy security of allies and partners of the
United States in the Indo-Pacific region; and
(9) to supply countries that rely on higher-emitting fuel
sources with abundant alternatives that have lower lifecycle
emissions profiles.
SEC. 5. ENERGY INFRASTRUCTURE PROJECT SUPPORT.
(a) In General.--The Secretary, in consultation with the Secretary
of Energy, the heads of other relevant United States agencies, and
energy-importing allies and partners of the United States, shall, as
appropriate, prioritize and expedite the efforts of the Department of
State, the Department of Energy, and such other agencies in supporting
the governments of like-minded Indo-Pacific countries to increase their
energy security and reduce energy emissions, including through--
(1) providing diplomatic and political support to those
governments, as necessary--
(A) to facilitate international negotiations
concerning cross-border infrastructure;
(B) to enhance the regulatory environment with
respect to energy projects in the Indo-Pacific region;
and
(C) to develop accessible, transparent, and
competitive energy markets supplied by diverse sources,
types, and routes of energy; and
(2) providing support--
(A) to improve energy markets in the Indo-Pacific
region, including early-stage project support and late-
stage project support for the construction or
improvement of energy projects and related
infrastructure;
(B) to diversify the energy sources and supply
routes of Indo-Pacific countries to strengthen energy
security;
(C) to enhance energy market integration across the
region; and
(D) through--
(i) investments in infrastructure to
support the importation of liquefied natural
gas and other clean energy products by Indo-
Pacific countries;
(ii) energy-related international technical
assistance;
(iii) energy technology collaboration;
(iv) commercial engagement; and
(v) any other mode of energy infrastructure
support the Secretary considers appropriate.
(b) Project Selection.--
(1) Identification.--The Secretary, the Secretary of
Commerce, and the Secretary of Energy shall identify energy
infrastructure projects that would be appropriate for United
States assistance under this section.
(2) Eligibility.--A project is eligible for United States
assistance under this section if the project--
(A) has been identified by the Secretary, the
Secretary of Commerce, and the Secretary of Energy as
promoting energy security in the Indo-Pacific region or
the country in which the project is located;
(B) promotes the use of liquefied natural gas and
other clean energy products and related energy
infrastructure;
(C) has the potential to use goods and services
produced in the United States or an Indo-Pacific
country during project implementation; and
(D) is located in an Indo-Pacific country.
(3) Preference.--In selecting projects for United States
assistance under this section, the Secretary, the Secretary of
Commerce, and the Secretary of Energy shall give preference to
projects that are expected to enhance energy market
integration;
(4) Equal consideration.--In carrying out the requirements
of this subsection, the Secretary, the Secretary of Commerce,
and the Secretary of Energy shall give equal consideration to
each type of eligible project, without regard to the type of
clean energy product or related energy infrastructure involved.
(c) Priority Report Required.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, and annually thereafter for 10
years, the Secretary shall submit to the appropriate
congressional committees a report describing how the Secretary
will prioritize the selection of projects that promote the
export of liquefied natural gas and other clean energy products
and development of related energy infrastructure under
subsection (b), taking into consideration--
(A) the ability of the project to provide resilient
and reliable energy to the Indo-Pacific country in
which the project would be located;
(B) geostrategic imperatives and the national
security interests of--
(i) the United States; and
(ii) the Indo-Pacific country in which the
project would be located;
(C) the development goals of the Indo-Pacific
country in which the project would be located; and
(D) potential reductions in global emissions,
including the abatement of methane emissions.
(2) Consultations.--In developing the report required by
paragraph (1), the Secretary shall consult with--
(A) the Secretary of Commerce;
(B) the Secretary of Energy;
(C) the Assistant Secretary of State for Energy
Resources;
(D) the Director of the Trade and Development
Agency;
(E) with respect to projects described in section
1455 of the Better Utilization of Investments Leading
to Development Act of 2018 (as added by section 6(a)),
the Chief Executive Officer of the United States
International Development Finance Corporation; and
(F) with respect to projects described in section
16 of the Export-Import Bank Act of 1945 (as added by
section 6(b)), the President of the Export-Import Bank
of the United States.
(d) Diplomatic and Political Support.--The Secretary shall provide
diplomatic and political support to the governments of like-minded
Indo-Pacific countries, as necessary, including by using the diplomatic
and political influence and expertise of the Department of State to
build the capacity of those countries to resolve any impediments to the
development of projects selected under subsection (b).
(e) Project Support.--The Director of the Trade and Development
Agency shall provide early-stage project support with respect to
projects selected under subsection (b).
(f) Accountability.--Not later than 30 days before providing any
diplomatic or political support under this section with respect to a
project in an Indo-Pacific country, the Secretary shall certify, in
writing, to the appropriate congressional committees that, except in
the case of an extraordinary event, there is no foreseeable risk that
the project identified or selected for support by the United States
will be taken over, either through the use of force, hostile
acquisition, or other commercial engagement, by a country that is an
adversary of, or is not an ally of, the United States.
SEC. 6. STRATEGIC ENERGY INFRASTRUCTURE FUNDING.
(a) Support for Energy Infrastructure by the United States
International Development Finance Corporation.--Title V of the Better
Utilization of Investments Leading to Development Act of 2018 (22
U.S.C. 9671 et seq.) is amended by adding at the end the following:
``SEC. 1455. STRATEGIC ENERGY INFRASTRUCTURE.
``The Corporation--
``(1) may, notwithstanding any other provision of this
division, provide support under title II for projects related
to importation of liquefied natural gas and other clean energy
products (as defined in section 9 of the Indo-Pacific Strategic
Energy Initiative Act), including for such projects of entities
owned or controlled by the government of a foreign country, if
the Secretary of State, acting through the Assistant Secretary
of State for East Asian and Pacific Affairs, certifies to the
appropriate congressional committees that such support--
``(A) furthers the national economic or foreign
policy interests of the United States; and
``(B) is necessary to preempt or counter efforts by
a strategic competitor of the United States to secure
significant political or economic leverage or acquire
national security-sensitive technologies or
infrastructure in an Indo-Pacific country that is an
ally or partner of the United States;
``(2) shall provide equal consideration to each such
project, without regard to the type of the energy involved; and
``(3) should, in providing support authorized by paragraph
(1), coordinate with the Japan Bank for International
Cooperation and the Government of Australia pursuant to the
trilateral memorandum of understanding on development finance
signed on November 12, 2018.''.
(b) Promotion of Energy Exports by Export-Import Bank of the United
States.--The Export-Import Bank Act of 1945 (12 U.S.C. 635 et seq.) is
amended by adding at the end the following:
``SEC. 16. STRATEGIC ENERGY INFRASTRUCTURE.
``(a) In General.--The Bank shall establish a balanced strategic
energy portfolio focused on providing financing (including loans,
guarantees, and insurance) for projects described in subsection (b)
that may facilitate--
``(1) increases in exports of United States energy
commodities; or
``(2) the export of United States equipment, materials, and
technology.
``(b) Projects Described.--A project described in this subsection
is a project related to--
``(1) construction of liquefied natural gas import
terminals;
``(2) commercialization of carbon capture, utilization, and
storage;
``(3) development of blue hydrogen infrastructure; or
``(4) other low emission energy infrastructure.
``(c) Equal Consideration.--In carrying out this section, the Bank
shall provide equal consideration to each project described in
subsection (b), without regard to the type of the energy involved.''.
(c) Private and Foreign Public Sector Investment.--
(1) Private sector investment.--The Secretary of Commerce
and the Secretary shall promote the funding of projects
selected under section 5 among United States energy producers
and exporters.
(2) Foreign public sector investment.--The heads of the
agencies described in section 5(a) may, for the purposes of
this Act, partner and coordinate with public and multilateral
financial institutions and export credit agencies of Indo-
Pacific countries.
SEC. 7. PROHIBITIONS ON LIMITATION ON FUNDING BASED ON TYPE OF ENERGY
PRODUCT.
In carrying out the provisions of and amendments made by this Act,
no limitation may be imposed on the amount of funding or support
provided for a project based on the type of clean energy product that
the project would support.
SEC. 8. REPORTING.
Not later than one year after the date of the enactment of this
Act, and annually thereafter, the President shall submit to the
appropriate congressional committees a report on progress made in
providing assistance for projects under this Act or the amendments made
by this Act that includes--
(1) a description of the energy infrastructure projects the
United States has identified for such assistance; and
(2) for each such project--
(A) a description of the role of the United States
in the project, including in early-stage project
support and late-stage project support;
(B) the amount and form of any debt financing and
insurance provided by the United States Government for
the project as well as any coordination with foreign
public financial institutions or export credit
agencies;
(C) the amount and form of any debt financing and
insurance provided by foreign public financial
institutions or export credit agencies;
(D) the amount and form of any early-stage project
support; and
(E) an update on the progress made on the project
as of the date of the report.
SEC. 9. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Relations, the
Committee on Energy and Natural Resources, and the
Committee on Environment and Public Works of the
Senate;
(B) the Committee on Foreign Affairs, the Committee
on Energy and Commerce, and the Committee on Natural
Resources of the House of Representatives; and
(C) any other committee of the Senate or House of
Representatives that the President considers
appropriate.
(2) Clean energy product.--The term ``clean energy
product'' means--
(A) a product that--
(i) is produced or refined in the United
States; and
(ii) can be used by an Indo-Pacific
country--
(I) as a fuel or feedstock; or
(II) for the generation of low
emission electricity; and
(B) includes--
(i) liquefied natural gas; or
(ii) any other clean energy product with a
lifecycle emissions profile lower than that of
a comparable product produced or refined in a
country that is an adversary of, or is not an
ally of, the United States.
(3) Indo-pacific country.--The term ``Indo-Pacific
country''--
(A) includes--
(i) Australia;
(ii) India;
(iii) Japan;
(iv) the Republic of Korea; and
(v) any other country, including a Pacific
island country, that is--
(I) a member country of Association
of Southeast Asian Nations (commonly
referred to as ``ASEAN''); or
(II) located in or adjacent to the
tropical waters of the Indian Ocean,
the western and central Pacific Ocean,
or the seas connecting the Indian Ocean
and the Pacific Ocean, including
Taiwan; and
(B) does not include any that is prohibited from
receiving support from the United States International
Development Finance Corporation under section 1454 of
the Better Utilization of Investments Leading to
Development Act of 2018 (22 U.S.C. 9673).
(4) Related energy infrastructure.--The term ``related
energy infrastructure'' means--
(A) liquefied natural gas import terminals;
(B) carbon capture, utilization, and storage
infrastructure;
(C) blue hydrogen infrastructure; or
(D) other low emission energy infrastructure.
(5) Secretary.--The term ``Secretary'' means the Secretary
of State, acting through the Assistant Secretary of State for
East Asian and Pacific Affairs.
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