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113th Congress  }                                            {   Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                            {  113-477

======================================================================
 
               DOMESTIC PROSPERITY AND GLOBAL FREEDOM ACT

                                _______
                                

 June 19, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                         [To accompany H.R. 6]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 6) to provide for expedited approval of 
exportation of natural gas to World Trade Organization 
countries, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................    13
Committee Consideration..........................................    13
Committee Votes..................................................    14
Committee Oversight Findings.....................................    16
Statement of General Performance Goals and Objectives............    16
New Budget Authority, Entitlement Authority, and Tax Expenditures    16
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    16
Committee Cost Estimate..........................................    16
Congressional Budget Office Estimate.............................    16
Federal Mandates Statement.......................................    17
Duplication of Federal Programs..................................    17
Disclosure of Directed Rule Makings..............................    17
Advisory Committee Statement.....................................    18
Applicability to Legislative Branch..............................    18
Section-by-Section Analysis of the Legislation...................    18
Changes in Existing Law Made by the Bill, as Reported............    18
Minority, Additional, or Dissenting Views........................    20

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Domestic Prosperity and Global Freedom 
Act''.

SEC. 2. ACTION ON APPLICATIONS.

  (a) Decision Deadline.--The Department of Energy shall issue a 
decision on any application for authorization to export natural gas 
under section 3 of the Natural Gas Act (15 U.S.C. 717b) not later than 
90 days after the later of--
          (1) the end of the comment period for such decision as set 
        forth in the applicable notice published in the Federal 
        Register; or
          (2) the date of enactment of this Act.
  (b) Judicial Action.--(1) The United States Court of Appeals for the 
circuit in which the export facility will be located pursuant to an 
application described in subsection (a) shall have original and 
exclusive jurisdiction over any civil action for the review of --
          (A) an order issued by the Department of Energy with respect 
        to such application; or
          (B) the Department of Energy's failure to issue a decision on 
        such application.
  (2) If the Court in a civil action described in paragraph (1) finds 
that the Department of Energy has failed to issue a decision on the 
application as required under subsection (a), the Court shall order the 
Department of Energy to issue such decision not later than 30 days 
after the Court's order.
  (3) The Court shall set any civil action brought under this 
subsection for expedited consideration and shall set the matter on the 
docket as soon as practical after the filing date of the initial 
pleading.

SEC. 3. PUBLIC DISCLOSURE OF EXPORT DESTINATIONS.

  Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by 
adding at the end the following:
  ``(g) Public Disclosure of LNG Export Destinations.--As a condition 
for approval of any authorization to export LNG, the Secretary of 
Energy shall require the applicant to publicly disclose the specific 
destination or destinations of any such authorized LNG exports.''.

                          Purpose and Summary

    H.R. 6, the ``Domestic Prosperity and Global Freedom Act,'' 
was introduced by Representative Gardner (R-CO) on March 6, 
2014. H.R. 6 would expedite the decision making process for 
authorization to export natural gas under section 3 of the 
Natural Gas Act by requiring the Department of Energy (DOE) to 
issue a decision within 90 days after the later of the end of 
the comment period or the date of enactment of the Act. The 
legislation also would grant original and exclusive 
jurisdiction over certain civil actions to the United States 
court of appeals for the circuit in which the export facility 
will be located.

                  Background and Need for Legislation

    The rapid growth in the United States' natural gas 
production offers a variety of opportunities, including the 
chance for the U.S. to become a natural gas exporting nation. 
Doing so would benefit the U.S., as well as our allies and 
trading partners, many of whom have been vocal in their support 
of such exports.
    The economic benefits of exporting liquefied natural gas 
(LNG) outweigh the costs, according to a study conducted for 
DOE by NERA Economic Consulting in 2012.\1\ This report found 
that the U.S. can produce more than enough natural gas to meet 
domestic demand affordably, while also supporting export 
markets. The report further concluded that the net benefits of 
exports apply to consumers as well as the overall economy, and 
that these benefits increase along with the level of exports. 
Other studies, including an updated analysis conducted by NERA 
in 2014,\2\ have reached similar conclusions.
---------------------------------------------------------------------------
    \1\See NERA's report on the macroeconomic impacts of LNG exports 
from the United States contracted for by the Department of Energy. 
December 3, 2012.
    \2\See NERA's updated report on the macroeconomic impacts of LNG 
exports from the United States. Submitted to supplement Cheniere 
Energy's pending application. May 20, 2014.
---------------------------------------------------------------------------
    Although the economic benefits of LNG exports are 
significant, they may be exceeded by the geopolitical benefits. 
By becoming a natural gas exporter, the U.S. can supplant the 
influence of other exporters, like Russia and Iran, while 
strengthening ties with our allies and trading partners around 
the world. U.S. LNG also can help the developing world by 
providing a much-needed source of affordable energy, and offer 
those countries pursuing environmental objectives the option of 
using clean-burning natural gas.
    However, time is of the essence, and DOE's slow approval 
process for LNG exports is squandering the chance to maximize 
our energy advantage. DOE has made only 7 decisions since the 
first non-FTA application was submitted nearly four years ago, 
and 24 applications still await action. America's window of 
opportunity will not remain open for long. In the face of 
continued delays, nations with near-term energy needs will be 
forced to look elsewhere for supplies, LNG facilities will have 
difficulty securing financing in an uncertain regulatory 
environment, and America will see greater competition from 
other LNG exporters. To avert these risks to our global LNG 
export leadership potential, H.R. 6 is necessary to expedite 
the Department of Energy's approval process for LNG exports to 
non-FTA countries, bringing about greater certainty to the 
private sector and sending a message to our allies and trading 
partners that the U.S. is prepared to become the global energy 
leader.
    The Committee on Energy and Commerce has focused 
considerable attention on the growth of domestic natural gas 
and oil production. Long-held beliefs in the inevitable decline 
of American gas and oil output have given way to the new 
reality of increasing abundance. These energy sources, along 
with coal, nuclear, and renewables, can provide the nation with 
the benefits of a diverse and plentiful energy portfolio for 
decades to come.
    The resurgence of natural gas and oil is an extremely 
important transformation, but it is one for which Washington is 
just beginning to adjust. Many outmoded Federal policies, based 
on the old assumptions of energy scarcity and rising imports, 
are still in force and stand in the way of the opportunities 
before us. The Committee has taken the lead in reviewing these 
policies and fighting for needed changes.
    Several hearings have been devoted to various aspects of 
the nation's expanding natural gas and oil abundance, with a 
particular emphasis on the legal and regulatory changes 
necessary to realize the full potential of these resources.
    The Subcommittee on Energy and Power began the 113th 
Congress with a hearing entitled ``American Energy Security and 
Innovation: An Assessment of North America's Energy 
Resources.'' In this overview of the resource base, the Energy 
Information Administration (EIA) described the dramatic 
increases in domestic natural gas and oil production all the 
more dramatic given that production had been falling for 
decades and many in Washington assumed that continued declines 
were unavoidable. Instead, the U.S. has reversed the declines 
rapidly and emerged as the world's largest producer of natural 
gas and oil in 2013.\3\ The production increases show no signs 
of slowing down and should continue in the years ahead. 
Renowned energy analyst, Dr. Daniel Yergin, estimates that this 
energy revolution already supports 1.7 million jobs and could 
support 3 million jobs by 2020.\4\
---------------------------------------------------------------------------
    \3\See ``U.S. expected to be largest producer of petroleum and 
natural gas hydrocarbons in 2013.'' U.S. Energy Information 
Administration, October 4, 2013.
    \4\Testimony of Dr. Daniel Yergin, IHS, Inc., before the House 
Energy and Commerce Committee. February 5, 2013.
---------------------------------------------------------------------------
    The impressive rise in natural gas output since 2005 has 
been made possible by American innovations in hydraulic 
fracturing and horizontal drilling. EIA's rising estimates of 
natural gas reserves strongly suggest that American output can 
exceed domestic needs into the future.\5\ Specifically, it 
projects a 56 percent production increase by 2040, remaining 
well above projected domestic demand.\6\ U.S. natural gas 
imports, which had previously been high enough to noticeably 
impact global supplies, have declined dramatically and are now 
negligible.
---------------------------------------------------------------------------
    \5\Testimony of Adam Sieminski, EIA, before the House Energy and 
Commerce Committee. February 5, 2013.
    \6\See ``Annual Energy Outlook 2014 Early Release Overview.'' U.S. 
Energy Information Administration.
---------------------------------------------------------------------------
    However, the Federal government has failed to encourage 
this energy transformation. In fact, due to access restrictions 
that keep vast areas off-limits,\7\ natural gas and oil 
production on federally controlled lands and offshore areas has 
not increased at all. In the case of natural gas, the 
Congressional Research Service reports that ``[o]verall, U.S. 
natural gas production rose by four trillion cubic feet (tcf) 
or 19 percent since 2009, while production on Federal lands 
(onshore and offshore) fell by about 28 percent. Natural gas 
production on non-Federal lands by percent over the same time 
period''\8\ The already-impressive net growth in natural gas 
supplies from State and private lands could be enhanced 
considerably if Federal lands were brought into the mix more 
fully.
---------------------------------------------------------------------------
    \7\Testimony of Mary Hutzler, Institute for Energy Research, before 
the House Energy and Commerce Committee. February 5, 2013.
    \8\Congressional Research Service, ``U.S. Crude Oil and Natural Gas 
Production in Federal and non-Federal Areas,'' April 10, 2014.
---------------------------------------------------------------------------
    Subsequent hearings explored the tremendous economic 
potential of this resource bounty. For example, a joint hearing 
by the Subcommittee on Commerce, Manufacturing, and Trade and 
the Subcommittee on Energy and Power, entitled ``U.S. Energy 
Abundance: Manufacturing Competitiveness and America's Energy 
Advantage,'' detailed the benefits of a steady stream of low-
priced natural gas to American manufacturers competing on a 
global stage. Chemical and fertilizer producers that use 
natural gas as a feedstock are benefitting tremendously. 
Indeed, these facilities--and their jobs--are coming back to 
the U.S. after years of having been outsourced. Soon, they may 
be joined by companies that split molecules of natural gas into 
various chemicals in a process known as ``cracking.'' These 
chemicals, such as ethylene and their derivatives, are then 
used by the manufacturing sector to make a variety of plastics 
and consumer products. Investments in these facilities in 
America are being considered for the first time in over 50 
years.
    Those who make the equipment used in the energy boom 
everything from drilling equipment to pipes also have 
prospered. And most other manufacturers benefit from lower-
priced electricity produced from natural gas, which alongside 
coal and other sources, hold the potential to secure affordable 
electricity now and well into the future.

                 I. THE BENEFITS OF NATURAL GAS EXPORTS

    Perhaps the most exciting of the many opportunities 
presented by this new energy abundance is the potential for 
America to increase energy exports. The U.S has long been a 
coal-exporting nation, but is now in a position to be a natural 
gas exporting nation as well. In fact, the price of natural gas 
in many overseas markets is considerably higher than in the 
U.S., creating the potential for very profitable exports, even 
after transportation costs are taken into account (Figure 1).



    A Subcommittee on Energy and Power hearing, entitled ``U.S. 
Energy Abundance: Exports and the Changing Global Energy 
Landscape,'' focused on the potential benefits of energy 
exports, including domestic jobs and improved balance of 
payments. An analysis conducted by NERA for the Department of 
Energy concluded that America has more than enough natural gas 
to meet its domestic needs affordably, while also supporting 
export markets, and that doing so would be a net benefit to the 
American economy.\9\ Other studies have drawn similar 
conclusions.\10\ Further, NERA released an updated study to 
their earlier work done for the Department of Energy. This 
study responded to several issues raised in the first NERA 
report with additional data and analysis.\11\
---------------------------------------------------------------------------
    \9\See ``Macroeconomic Impacts of LNG Exports from the United 
States,'' NERA Economic Consulting, December 3, 2012.
    \10\See ``Liquid Markets: Assessing the Case for U.S. Exports of 
Liquefied Natural Gas,'' Brookings Institution, May 2, 2012; ``New 
Dynamics of the U.S. Natural Gas Market,'' Bipartisan Policy Center, 
May 2013; ``Liquefied Natural Gas Exports: America's Opportunity and 
Advantage,'' ICF International, December 2013.
    \11\See ``Updated Macroeconomic Impacts of LNG exports from the 
United States,'' NERA Economic Consulting, March 6, 2014.
---------------------------------------------------------------------------
    The U.S. has a tremendous resource base of low-cost natural 
gas. According to the congressional testimony of ICF Resources, 
the remaining technically recoverable U.S. natural gas resource 
base is 3,850 trillion cubic feet (Tcf). Over 1,200 Tcf is 
available in the lower-48 at $5.00 per million British Thermal 
Units (MMBtu).\12\ To put this in perspective, the U.S. used 
25.6 Tcf of natural gas in 2012. Driven mainly by increasing 
natural gas demand from the electricity sector, the Energy 
Information Administration predicts that consumption will rise 
to 31.6 Tcf in 2040. Domestic production is expected to keep 
pace with the new demand, growing to 37.5 Tcf in 2040. EIA 
predicts that the U.S. will be a net exporter of natural gas by 
2018, with exports of LNG from new liquefaction capacity rising 
to 3.5 Tcf in 2029 and remaining at that level through 
2040.\13\ Overall, only a fraction of the nation's vast natural 
gas resource base will be produced by 2040, and only a fraction 
of that will go to LNG exports (Figure 2).
---------------------------------------------------------------------------
    \12\Testimony of Mr. Harry Vidas, ICF International, before the 
House Energy and Commerce Committee. February 5, 2013.
    \13\See ``Annual Energy Outlook 2014 Early Release Overview.'' U.S. 
Energy Information Administration.



    Some on this Committee have expressed concern over the 
price impacts of allowing U.S. natural gas exports. However, 
the body of evidence, including the study requested by DOE, 
suggests that price impacts will be moderate and unlikely to be 
driven by the volume of U.S. gas exported. As NERA found in 
both studies, the market limits how high U.S. natural gas 
prices can rise under pressure of LNG exports because importers 
will not purchase U.S. exports if the U.S. wellhead price rises 
above the cost of competing suppliers. In effect, the market 
for LNG exports is self-limiting. The same study also found 
that across all scenarios, including allowing unlimited 
exports, U.S. economic welfare consistently increases as the 
volume of natural gas exports increased.\14\ Over the next 4 
years, investment in LNG export facilities and in additional 
natural gas exploration and productions for export could take 
upwards of 45,000 workers off the unemployment rolls.\15\
---------------------------------------------------------------------------
    \14\See ``Macroeconomic Impacts of LNG Exports from the United 
States,'' NERA Economic Consulting, December 3, 2012. Pg. 6.
    \15\Testimony of Dr. W. David Montgomery, NERA Economic Consulting, 
before the House Energy and Commerce Committee, March 25, 2014.
---------------------------------------------------------------------------

                             II. DOE'S ROLE

    DOE plays a critical role in enabling the U.S. to take 
advantage of the new era of energy abundance by regulating the 
trade of natural gas. DOE exercises jurisdiction over the 
commodity itself (natural gas), whereas other Federal agencies, 
such as the Federal Energy Regulatory Commission (FERC) and the 
Department of Transportation's Maritime Administration, and 
State and local authorities have jurisdiction over the 
facilities used to export the commodity. DOE's authority arises 
under the Natural Gas Act, which sets the standard of review 
for most LNG export applications. Applications to countries 
with which the U.S. has a Free Trade Agreement (FTA) in effect 
are granted automatically. The process is much more complicated 
and uncertain for applications involving the majority of 
countries, those with which the U.S. does not have an FTA. The 
Natural Gas Act establishes a rebuttable presumption that a 
proposed export of natural gas to a non-FTA country is in the 
public interest; however, the statute does not define ``public 
interest'' nor identify the criteria that must be considered. 
As a result, DOE identified a growing list of factors, 
including economic impacts, international impacts, and security 
of supply. In addition, DOE relies on outdated, 1984 Policy 
Guidelines related to the import of natural gas (at the time, 
it was believed that the U.S. would need to import more LNG) to 
weigh these factors. Overall, DOE's standard of review is 
unpredictable, evolving, and has been slow to reflect the 
nation's newfound natural gas abundance and the growing 
benefits of energy exports.
    DOE's adopted procedures, including its role as a 
cooperating agency with FERC for the purpose of complying with 
the National Environmental Policy Act (NEPA), present unique 
challenges, as recently demonstrated in DOE's order 
conditionally granting Freeport LNG authorization to 
export.\16\ Seemingly new criteria were added, and DOE 
partially denied the requested volume of natural gas, not on 
the basis of previously stated public interest criteria,\17\ 
but because of a discrepancy identified in Freeport's filing 
before FERC relating to the size of the facility and the 
environmental review process.
---------------------------------------------------------------------------
    \16\DOE/FE Order No. 3357. Available at: http://energy.gov/sites/
prod/files/2013/11/f5/FE%20DOCKET%20NO.%2011-161-
LNG%20ORDER%20NO.%203357.pdf.
    \17\Testimony of Christopher Smith, U.S. Department of Energy, 
before the House Energy and Commerce Committee. June 18, 2013.
---------------------------------------------------------------------------
    Another example where DOE has used questionable judgment in 
how it processes applications is the criteria ``used to 
establish processing order'' for applications.\18\ Of the 
criteria used, preference was given for projects that had 
engaged in the FERC approval process on or before December 5, 
2012. However, deep-water LNG export facilities are not 
approved by FERC; rather, they are approved by Maritime 
Administration. No mention is made of Maritime Administration 
approved projects anywhere in its criteria for establishing 
order for applications.
---------------------------------------------------------------------------
    \18\See ``Pending Long-Term Applications to Export LNG to Non-FTA 
Countries Listed in Order DOE Will Commence Processing, Last Revised 3/
24/2014.'' Available at: http://energy.gov/sites/prod/files/2014/03/
f13/Pending%20LT%20LNG%20Export%20Apps%20%283-24-14%29.pdf.
---------------------------------------------------------------------------
    DOE appears to be moving away from the market principles 
that once guided the process. In its 1984 Policy Guidelines on 
LNG imports, the agency stated that:

        the market, not government, should determine the price 
        and other contract terms of imported natural gas . . . 
        . The [F]ederal government's primary responsibility in 
        authorizing imports will be to evaluate the need for 
        the gas and whether the import arrangement will provide 
        the gas on a competitively priced basis for the 
        duration of the contract while minimizing regulatory 
        impediments to a freely operating market.\19\
---------------------------------------------------------------------------
    \19\Department of Energy 1984 Policy Guidelines. Available at: 
http://www.fossil.energy.gov/programs/gasregulation/authorizations/
policy.pdf.

    DOE seemingly has abandoned this limited approach in favor 
of lengthy and comprehensive reviews of each export application 
under which almost any factor can be reviewed. This unsettled 
review process has led to extensive delays and additional 
uncertainty, with more than 20 applications currently pending 
before the agency, some for over a year.\20\
---------------------------------------------------------------------------
    \20\Applications received by DOE/FE to Export Domestically Produced 
LNG from the Lower-48 States. Available at: http://energy.gov/sites/
prod/files/2014/01/f6/Summary%20of%20LNG%20Export%20Applications.pdf.
---------------------------------------------------------------------------
    Among the justifications for DOE's cautious, case-by-case 
approach is the concern that if every application for export 
were approved, the resulting exports would create a substantial 
draw on domestic supplies of natural gas and cause a 
significant price increase. However, the previous record for 
FERC-approved LNG terminals does not bear this out. During the 
years when the U.S. faced the daunting task of building more 
import terminals in the face of declining production, there 
were approximately 33 applications that entered into the FERC 
application process. However, only 5 of these onshore import 
facilities were ultimately constructed.\21\ There are a variety 
of reasons why only 5 facilities were constructed, but given 
the complexity and costs of LNG projects, variables such as how 
many projects the market will ultimately support, and 
overcoming the Federal, State, and local regulatory barriers to 
constructing a facility dictate that an approval to export LNG 
by no means guarantees a facility will be constructed or 
operational.\22\
---------------------------------------------------------------------------
    \21\Map of North American LNG Terminals. Available at: http://
energy.gov/sites/prod/files/2013/04/f0/
LNG%20Import%20%26%20Export%20Terminal%20Maps%2012-18-2012.pdf.
    \22\Interviews with Marc Robinson, former Director, Office of 
Energy Programs, Federal Energy Regulatory Commission, January 2014.
---------------------------------------------------------------------------
    It should be noted that LNG facilities are multi-billion 
dollar capital investments that take several years to build, so 
any regulatory uncertainty as to when they will be approved and 
to whom they are allowed to sell can have a chilling effect on 
investment.
    A Subcommittee on Energy and Power hearing entitled, ``U.S. 
Energy Abundance: Regulatory, Market, and Legal Barriers to 
Export,'' focused on these extensive regulatory obstacles. Many 
experts see them as relics from a time of perceived energy 
scarcity and fears of domestic shortages, and believe that they 
should be updated to take full advantage of LNG export 
opportunities.\23\
---------------------------------------------------------------------------
    \23\Testimony of Lou Pugliarese, Energy Policy Research Foundation, 
Inc., before the House Energy and Commerce Committee. June 18, 2013.
---------------------------------------------------------------------------

                   III. THE GLOBAL PERSPECTIVE ON LNG

    While these hearings emphasized the potential economic 
benefits of LNG exports, they also touched on the tremendous 
geopolitical benefits. Indeed, many believe that important 
foreign policy goals can be more effectively advanced through 
increased energy trade than through diplomacy or foreign aid 
programs. Further, an increased American contribution to global 
energy markets can enhance national security by supplanting the 
influence of the troublesome participants currently dominating 
those markets, especially Iran and Russia.\24\
---------------------------------------------------------------------------
    \24\Testimony of Amy Myers Jaffe, University of California, Davis, 
before the House Energy and Commerce Committee. May 7, 2013.
---------------------------------------------------------------------------
    To fully understand the global implications of LNG exports, 
it is critical to hear directly from those allies and trading 
partners around the world that are seeking this American 
energy. For this reason, on October 10, 2013, the Subcommittee 
on Energy and Power hosted a forum, entitled ``U.S. Energy 
Exports: Geopolitical Implications and Mutual Benefits.'' The 
participants, representing the Commonwealth of Puerto Rico and 
many foreign nations included:
           Czech Republic: Jaroslav Zajicek, Deputy 
        Chief of Mission;
           Haiti: Rene Jean-Jumeau, Minister Delegate 
        to the Prime Minister, Charge of Energy Security;
           Hungary: Anita Orban, Ambassador-at-Large 
        for Energy Security of the Ministry of Foreign Affairs;
           India: Taranjit Singh Sandhu, Deputy Chief 
        of Mission;
           Japan: Yasushi Akahoshi, Minister, Economy, 
        Trade, Industry and Energy;
           Lithuania: Zygimantas Pavilionis, Ambassador 
        to the United States and Mexico;
           Puerto Rico: Dr. Efrain O'Neill-Carillo, 
        Senior Energy Advisor to the Governor;
           Singapore: Ashok Kumar Mirpuri, Ambassador 
        to the United States;
           South Korea; Ahn Ho-Young, Ambassador to the 
        United States; and,
           Thailand: Saroj Thanasunti, Charge 
        d'Affaires.
    These nations vary greatly in terms of their current energy 
supply challenges and expected future needs. They also differ 
in their levels of economic development, national security 
concerns, environmental policy priorities, and other energy-
related factors. But they are dependent on energy imports and 
have expressed a strong interest in LNG from the U.S.

A. Increased U.S. Global Influence From LNG Exports

    Electricity can be produced from a variety of sources--
coal, natural gas, and nuclear, as well as renewable sources 
like hydroelectric, wind, and solar. Different nations (and 
regions within nations) strive to achieve an electricity 
portfolio best suited to their particular circumstances to 
ensure reliability and affordability. Currently, many nations 
would like to add more natural gas into their electricity mix 
given its affordability and low emissions, and U.S. LNG is seen 
as an excellent source of new supply.
    In a geopolitical context, the benefits of diversity apply 
to suppliers as well as supplies, and the added option of U.S. 
LNG enhances both kinds of diversity. This is especially 
important to Central and Eastern European nations heavily 
reliant on Russia for natural gas. This dependence has led to 
not only higher prices, but as the recent crisis in the Ukraine 
has shown, it also increases the ability of Russia to exert 
political pressure on these nations.
    Zygimantas Pavilionis, Lithuanian Ambassador to the United 
States and Mexico, noted his nation's heavy reliance on natural 
gas from Russia's Gazprom, adding that ``we pay the highest 
price for gas in the world.'' Beyond costs, he also discussed 
instances of Russia using its energy leverage to exert pressure 
over Lithuania on political matters, especially those involving 
Lithuania's efforts to break free from the Russian sphere of 
influence and align more closely with the European Union and 
the U.S. Jaroslav Zajicek, Deputy Chief of Mission for the 
Czech Republic, relayed similar experiences. He explained that 
the sharp drop in U.S. imports of natural gas already is 
helping by freeing up additional supplies from the Caribbean 
and other sources that were once destined for the U.S., but now 
serve the Western European market.
    Hungary's Ambassador at Large for Energy Security, Dr. 
Anita Orban, testified that:

        it is simply not true that lifting the natural gas 
        export ban today would not have an immediate effect in 
        [Europe]. It would immediately change the business 
        calculus of infrastructure investments and send an 
        extremely important message of strategic reassurance to 
        the region which currently feels more threatened than 
        any time since the Cold War.\25\
---------------------------------------------------------------------------
    \25\Testimony of Dr. Anita Orban, Government of Hungary, before the 
House Energy and Commerce Committee. March 25, 2014.

    Enacting H.R. 6 will free European allies from their 
reliance on Russia and Iran for natural gas.\26\ However, H.R. 
6 could help blunt Russia's economic rewards from its regional 
natural gas monopoly. Over the next five years, U.S. 
competition could drive Russia's revenues from natural gas 
exports down by as much as 30 percent, and in the longer term, 
could cut those revenues by as much as 60 percent.\27\
---------------------------------------------------------------------------
    \26\See ``Iran offers Europe gas amid Russian energy embargo 
fears.'' The Telegraph, May 4, 2014.
    \27\Testimony of Dr. W. David Montgomery, NERA Economic Consulting, 
before the House Energy and Commerce Committee, March 25, 2014.
---------------------------------------------------------------------------
    Many Asian nations also are highly dependent on imports for 
their energy needs, much of which comes from the unstable 
Middle East. For this reason, the prospect of U.S. LNG is 
especially valued for its stability. For example, Yasushi 
Akahoshi, Japan's Minister of Economy, Trade, Industry and 
Energy, said that ``half of the expanded demand for natural gas 
is coming from the Middle East, and our dependence on that 
region is rising.'' He concluded that ``the import from the 
U.S. would be the most reliable supply, which could bring about 
less dependency on the Middle East.'' Taranjit Singh Sandhu, 
India's Deputy Chief of Mission, stated that U.S. LNG exports 
``would provide a steady, reliable supply of clean energy and 
help diversify our imports from our traditional suppliers.''

B. Global Economic Development Benefits

    The United States gains from a stronger world economy, and 
LNG exports can play a role in accomplishing that end. This is 
particularly true of poorer countries for which affordable 
energy is a key component of economic development. These 
countries are interested especially in LNG because it is 
cheaper than the energy sources they currently rely upon.
    Rene Jean-Jumeau, Haiti's Minister Delegate to the Prime 
Minister, sees U.S. LNG exports as a means for his country to 
transition ``from an aid based relationship to a trade based 
relationship.'' He said ``[t]he question of energy is central 
to every type of issue of development that we can consider.'' 
Jean-Jumeau added that replacing the oil Haiti currently uses 
to generate electricity with natural gas would lead to ``a 
reduction in the cost of electricity by at least 30 percent.'' 
This would have the double benefit of making electricity more 
accessible to the citizens of Haiti (a majority of Haitians do 
not have access to electricity), while also ensuring the low 
energy prices necessary to attract investment in manufacturing.
    Indeed, LNG exports to developing nations would help to 
accomplish many of the same economic goals for which direct aid 
was intended.
    Efrain O'Neill-Carillo, Senior Energy Advisor to the 
Governor of Puerto Rico, also emphasized the benefits of 
affordable energy from LNG to low-income populations, along 
with the energy security benefits. ``Lower electricity costs in 
Puerto Rico will mean better socio-economic conditions, lower 
social problems, increase our energy security and overall 
security in the region.'' He noted that Puerto Rico produces 70 
percent of its electricity from oil, and that ``when the 
average price of a barrel of oil increases by $10, it is 
estimated that $700 million dollars leave Puerto Rico's economy 
every year.''
    India's Mr. Sandhu similarly noted that ``there is a price 
advantage in LNG imports from the U.S. compared to current 
prices from traditional suppliers, which is an important factor 
in the energy policy decision-making for a developing country 
like India.''

C. Environmental Benefits

    Nations around the world have varying energy policy 
priorities, which, in addition to securing long-term affordable 
energy, may include reducing greenhouse gas emissions or 
reducing air pollution from energy use. But many have limited 
options for moving to lower emitting sources of electrical 
generation. For example, Japan has suspended its nuclear power 
program in response to the Fukushima Daiichi accident. Nations 
like Singapore have insufficient land for renewable sources, 
while others like Haiti must first expand baseload power before 
accommodating intermittent renewables like wind and solar. 
Natural gas can provide a baseload source of electricity 
affordably and do so with the added benefit of lower emissions.
    The U.S. can help many of these nations achieve their 
environmental objectives simply by making LNG available. For 
example, in considering Japan's need for non-nuclear 
alternatives, Minister Akahoshi said that using natural gas 
``would contribute to emissions reductions, which is one reason 
we would like to expand use of natural gas from the U.S.'' 
Japan is one of many countries around the world that must rely 
on crude and fuel oil in order to meet part of their 
electricity demands due to an inability to secure enough 
natural gas supplies. South Korean Ambassador Ahn Ho-Young 
noted that ``we made a commitment in Korea to reduce the 
emissions of carbon dioxide by year 2020, a 30 percent 
reduction. In order to do it, we will have to . . . further 
increase use of LNG. This is the reason we are encouraged by 
the new source of energy.'' India's Mr. Sandhu added that ``LNG 
is an important component of our environmentally sensitive 
energy security strategy.''

     IV. PROPOSED CHANGES TO THE DEPARTMENT OF ENERGY'S LNG EXPORT 
                               PROCEDURES

    On May 29, 2014, DOE proposed changes to its procedures for 
conducting the public interest analysis required by the Natural 
Gas Act.\28\ DOE will no longer proceed in the previously 
established ``Order of Precedent'' and will suspend the 
practice of issuing conditional decisions on applications to 
export LNG. DOE instead will act on applications in the order 
in which they become ready for final action. DOE states ``[a]n 
application is ready for final action when DOE has completed 
the pertinent NEPA review process and when DOE has sufficient 
information on which to base a public interest 
determination.''\29\ DOE also proposed to amend the dockets of 
all pending LNG export applications requiring a public interest 
analysis with an updated economic study and two reports 
focusing on the environmental and lifecycle greenhouse gas 
impacts resulting from LNG exports from the United States. DOE 
asserts that the addition of the environmental reports, while 
not required by the NEPA, are in keeping with the President's 
Climate Action Plan and the Administration's commitment to 
mitigate greenhouse gas emissions.
---------------------------------------------------------------------------
    \28\See Proposed Procedures for Liquefied Natural Gas Export 
Decisions, 79 Fed. Reg. 32261, 32264 (June 4, 2014).
    \29\See Proposed Procedures, 79 Fed. Reg. 32263.
---------------------------------------------------------------------------
    The proposed changes to the public interest analysis 
present new challenges to applicants seeking permission to 
export LNG. The introduction of new studies to the dockets 
suggests that DOE is modifying the standard of review by 
increasing the breadth and scope of the public interest 
analysis. These changes may result in further delays.
    While DOE has been clear that each proposal will be 
evaluated in terms of its additive impact to the cumulative 
whole, DOE has failed to define adequately the public interest 
criteria or its method for weighing intervening arguments. With 
the additional changes being proposed, adding to the extensive 
record that DOE already has established, the Committee is 
concerned the agency is inviting an opportunity for additional 
analysis and delay to overwhelm the decision making process 
itself. The resulting inefficient and expanding process may 
lead to missed opportunities to secure the Agency's. The 
decision deadline provision of H.R. 6 would alleviate the 
uncertainty associated with the effects of decision paralysis 
by DOE.
    In conclusion, the arguments in favor of H.R. 6, Domestic 
Prosperity and Global Freedom Act, are numerous and undeniable. 
H.R. 6 will compel DOE to make a determination on applications 
when the comment periods have closed, and in the case of some 
pending applications, the comment periods have been closed for 
over two years. H.R. 6 provides for a 90-day deadline for DOE 
to make a decision, by the later of either the end of the 
comment period closing or, for those applications where the 
comment period closed prior to enactment of the legislation, 
the date of enactment. Given the extensive record on LNG 
exports and the records for each respective application, and 
the presumption set forth in the Natural Gas Act that these 
applications are to be approved, any further delays by DOE in 
making a decision on applications is unacceptable.
    H.R. 6 further provides a legal remedy for an applicant to 
utilize if DOE fails to act in the timeframe set forth or if 
they wish to challenge a decision by DOE. The legal remedy, 
however, is not self-enacting. An applicant has the discretion 
when and if they choose to take DOE to court. In some cases, an 
applicant may feel that going to court would delay, rather than 
expedite, a DOE decision on their application. The intent and 
structure of H.R. 6 is to provide greater governance, guidance, 
predictability, accountability, and transparency to the LNG 
export approval process.

                                Hearings

    On March 25, 2014, the Subcommittee on Energy and Power 
held a hearing on H.R. 6, the ``Domestic Prosperity and Global 
Freedom Act.''
    The Subcommittee received testimony from:
           Ms. Paula Gant, Deputy Assistant Secretary 
        for Oil and Natural Gas, U.S. Department of Energy;
           Dr. Anita Orban, Ambassador-at-Large for 
        Energy Security, Government of Hungary;
           The Honorable James Bacchus, Greenberg 
        Trauig LLP;
           Mr. Dave Schryver, Executive Vice President, 
        American Public Gas Association;
           Mr. Kenneth Ditzel, Principal, Charles River 
        Associates; and,
           Dr. W. David Montgomery, Senior Vice 
        President, NERA Economic Consulting.

                        Committee Consideration

    On April 8 and 9, 2014, the Subcommittee on Energy and 
Power met in open markup session and considered H.R. 6. During 
the markup, one amendment was offered by Mr. Rush, and was 
adopted by voice vote. On April 9, 2014, the Subcommittee 
forwarded H.R. 6 to the full Committee, as amended, by a record 
vote of 15 ayes and 11 nays.
    On April 29 and 30, 2014, the Committee on Energy and 
Commerce met in open markup session and considered H.R. 6. 
During the markup, two amendments were offered and adopted by 
voice vote. On April 30, 2014, the Committee ordered H.R. 6 
favorably reported to the House, as amended, by a record vote 
of 33 ayes and 18 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were 2 record votes taken in connection with ordering 
H.R. 6 reported. A motion by Mr. Upton to order H.R. 6 reported 
to the House, as amended, was agreed to by a recorded vote of 
33 ayes and 18 nays. The following reflects the recorded votes 
taken during the Committee consideration:



                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

         Statement of General Performance Goals and Objectives

    H.R. 6 provides for increased coordination of Federal, 
State, and local assistance to promote energy retrofitting of 
schools.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
6 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 6 contains no earmarks, limited tax benefits, 
or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 3, 2014.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 6, the Domestic 
Prosperity and Global Freedom Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 6--Domestic Prosperity and Global Freedom Act

    Under the Natural Gas Act, the Department of Energy (DOE) 
regulates imports and exports of natural gas. H.R. 6 would 
amend that act to specify a deadline for DOE to issue decisions 
on certain applications for authority to export natural gas. 
Specifically, H.R. 6 would require DOE to issue a decision on 
any existing application within 90 days of either the enactment 
date of H.R. 6 or the close of the comment period pertaining to 
the application, whichever is later.
    Based on information from DOE, CBO estimates that enacting 
H.R. 6 would not significantly affect the federal budget. The 
bill would not materially alter DOE's regulatory 
responsibilities under the Natural Gas Act, and CBO estimates 
that any change in DOE's administrative costs, which are 
subject to the availability of appropriated funds, would be 
negligible because of the small number of permits involved. 
H.R. 6 would not affect direct spending or revenues; therefore, 
pay-as-you-go procedures do not apply.
    H.R. 6 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would impose no 
costs on state, local, or tribal governments.
    The bill would impose a private-sector mandate, as defined 
in UMRA, on entities seeking DOE approval to export natural 
gas. The Natural Gas Act requires entities seeking to export 
natural gas to obtain approval from DOE. The bill would require 
that applicants, as a condition for approval, publicly disclose 
the countries that would receive the exports. According to DOE, 
fewer than 100 applications have been approved or are pending 
for export of natural gas as of March 2014. Because the number 
of applications for export is small and the cost to disclose 
destination countries is low, CBO estimates that the cost of 
the mandate would fall well below the annual threshold 
established in UMRA for private-sector mandates ($152 million 
in 2014, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Megan Carroll 
(for federal costs) and Amy Petz (for the private-sector 
impact). The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 6 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 6 specifically 
directs no rule makings within the meaning of 5 U.S.C. 551 to 
be completed.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 provides the short title of ``Domestic Prosperity 
and Global Freedom Act.''

Section 2. Action on applications

    Section 2 states that the Department of Energy must issue a 
decision on an application to export natural gas under section 
3 of the Natural Gas Act no later than 90 days after either the 
end of the period for an application that has been noticed in 
the Federal Register or the date of enactment of this Act, 
whichever of these actions comes later.
    Section 2 also gives the United States court of appeals for 
the circuit in which the export facility will be located 
original and exclusive jurisdiction over any civil action for 
the review of either an order issued by the Department of 
Energy with respect to an application or the Department of 
Energy's failure to issue a decision. If the Court finds that 
Department of Energy has failed to issue a decision, then the 
Court shall order the Department of Energy to issue a decision 
no later than days after the Court's order. The Court shall set 
any action brought under this subsection for expedited 
consideration.

Section 3. Public disclosure of export destinations

    Section 3 amends the section 3 of the Natural Gas Act to 
provide that the applicant for authorization to export LNG must 
publicly disclose the specific destination or destinations of 
the authorized LNG export.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                    SECTION 3 OF THE NATURAL GAS ACT

        exportation or importation of natural gas; lng terminals

  Sec. 3. (a) * * *

           *       *       *       *       *       *       *

  (g) Public Disclosure of LNG Export Destinations.--As a 
condition for approval of any authorization to export LNG, the 
Secretary of Energy shall require the applicant to publicly 
disclose the specific destination or destinations of any such 
authorized LNG exports.

               MINORITY, ADDITIONAL, OR DISSENTING VIEWS

                               I. SUMMARY

    H.R. 6 would disrupt the Department of Energy's (DOE) 
existing approval process for the export of liquefied natural 
gas (LNG), which is working. DOE already has granted seven 
export applications that will transform the United States into 
the world's second largest exporter of LNG, just behind Qatar. 
This bill would establish arbitrary and rigid deadlines for DOE 
to decide on export applications. By mandating that DOE issue 
final decisions on nearly all of the 26 pending LNG export 
applications in 90 days, the bill requires DOE to make rushed 
decisions before the completion of important environmental 
reviews.
    When faced with these time limits, DOE either will rush to 
approve projects without an adequate public interest review or 
it will deny applications when time constraints prevent the 
department from creating an adequate record. No one benefits 
from rushed permitting or unnecessary project denials, not even 
the companies seeking to export LNG.
    Because the bill does not affect the Federal Energy 
Regulatory Commission's (FERC) separate permitting process for 
export terminals, the truncated DOE process will not speed up 
the actual export of LNG.
    The bill's supporters argue that this legislation is needed 
to support U.S. allies in Europe faced with Russian aggression 
in Ukraine. When the United States begins to export significant 
quantities of LNG three or four years from now, however, the 
LNG will likely go to Asia, where natural gas prices are higher 
than in Europe.

                   II. THE EXISTING APPROVAL PROCESS

    As a result of low domestic natural gas prices in the 
United States, companies have filed more than 30 applications 
with DOE to export LNG. For export to the 18 countries with a 
free trade agreement (FTA) with the United States, the Natural 
Gas Act requires DOE to deem such applications consistent with 
the public interest and grant them without modification or 
delay. DOE is required to grant an application to export 
natural gas to a country without a FTA with the United States 
unless it finds that the proposed export will not be consistent 
with the public interest. As a practical matter, each potential 
LNG export facility applies to export to both sets of 
countries. DOE evaluates a range of factors when performing a 
public interest review of a non-FTA application, including 
economic impacts, international considerations, U.S. energy 
security, and environmental considerations. The Federal Energy 
Regulatory Commission is responsible for issuing permits for 
specific LNG export facilities. DOE relies on FERC's 
environmental review to inform the DOE process.
    In May 2011, DOE granted an authorization for LNG exports 
from the Sabine Pass project in Louisiana. DOE commissioned a 
two-part study to help it decide how to address the remaining 
applications. The first part of the study, authored by the 
Energy Information Administration (EIA), was released in 
January 2012 and examined the impacts of LNG exports on 
domestic energy markets. The second part of the study, 
completed by a private contractor (National Economic Research 
Associates or NERA), examined the economic impacts of a range 
of LNG export levels.\1\ NERA examined scenarios with a ``low 
level'' of exports of 6 billion cubic feet per day and a ``high 
level'' of exports of 12 billion cubic feet per day.
---------------------------------------------------------------------------
    \1\Cheniere Energy, the developer of the Sabine Pass project, 
recently commissioned an updated NERA analysis, which was released on 
February 20, 2014.
---------------------------------------------------------------------------
    According to the EIA study, ``increased natural gas exports 
lead to increased natural gas prices'' and ``larger export 
levels lead to larger domestic price increases.'' EIA also 
found that ``rapid increases in exports would lead to sharp 
price increases.'' When EIA looked specifically at the 
potential impact on U.S. manufacturers, it found that a ``high 
level'' of LNG exports could increase natural gas costs for the 
industrial sector by between 5% and 27% annually.
    On May 17, 2013, DOE conditionally granted an authorization 
for LNG exports to non-FTA countries from the Freeport LNG 
terminal on Quintana Island, Texas. Since that time, DOE has 
conditionally granted five additional authorizations for LNG 
exports to non-FTA countries. In order to improve its process, 
the Department recently announced that it will review a pending 
application when the required environmental review is complete. 
This will effectively prioritize applications that are ready 
for final action.
    The seven approved applications authorize the export of a 
combined 9.3 billion cubic feet per day of LNG to non-FTA 
countries, an amount approaching the export level of Qatar, the 
world's largest exporter of LNG. The pending applications 
collectively seek an additional 26.7 billion cubic feet per day 
of LNG exports to non-FTA countries for a total of 36 billion 
cubic feet per day. By comparison, the record-breaking total 
U.S. consumption of natural gas during the 2013-2014 winter 
averaged 90.6 billion cubic feet per day.\2\
---------------------------------------------------------------------------
    \2\U.S. Energy Information Administration, Natural Gas Weekly 
Update (Apr. 3, 2014) (online at www.eia.gov/naturalgas/weekly/archive/
2014/04_03/index.cfm).
---------------------------------------------------------------------------
    The first LNG export terminal in the U.S. (Sabine Pass) is 
expected to begin partial operations in late 2015. Other 
approved export terminals are not expected to begin operations 
until 2017 or 2018. Based on long-term supply contracts that 
have been signed, exports from these projects are expected 
primarily to be shipped to locations in Asia, including Japan, 
China, South Korea, and India.

               III. SECTION-BY-SECTION ANALYSIS OF H.R. 6

    Section 2 of the bill requires DOE to issue a decision on 
any pending or future application for authorization to export 
natural gas under section 3 of the Natural Gas Act within 90 
days of the later of (1) the end of the comment period as set 
forth in the DOE's Federal Register notice or (2) the date of 
enactment of the bill.
    Section 2 also provides that the United States Court of 
Appeals for the circuit in which the export facility will be 
located shall have exclusive jurisdiction over any civil action 
for the review of (1) a DOE decision on an export application 
or (2) DOE's failure to issue a decision. If the Court finds 
that DOE has failed to issue a decision by the deadline 
established by the bill, the Court is directed to order DOE to 
issue a decision within 30 days. The bill provides for 
expedited consideration of such civil actions.
    Section 3 of the bill was added by an amendment offered by 
Rep. Bobby Rush (D-IL) during the Subcommittee on Energy and 
Power markup. It amends the Natural Gas Act to direct DOE, as a 
condition of approval of any authorization to export LNG, to 
require the applicant to publicly disclose the specific 
destinations of any such exports.

                    IV. POTENTIAL IMPACTS OF H.R. 6

    The bill will disrupt the functioning approval process for 
pending and future LNG export applications by arbitrarily 
limiting the time that DOE has to review the applications. The 
result will be rushed permitting and unnecessary project 
denials. The unworkable process created by the bill is 
unnecessary and will not result in speedier LNG exports to 
Europe or anywhere else.
A. The bill requires a rushed approval process without environmental 
        review, leading to unnecessary permit denials
    The bill would short-circuit the established review process 
for pending and future LNG export applications by setting an 
unworkable deadline for DOE to decide on applications within 90 
days of the close of the public comment period or enactment of 
the bill, whichever comes later. Because the comment period 
already has closed for 19 of the 26 pending applications, the 
bill would require final decisions to be made on each of those 
19 applications within 90 days of enactment of the bill. That 
is not realistic. With two exceptions, FERC environmental 
reviews have not been completed for any of these applications. 
For 17 pending applications, the deadline would force DOE to 
rush its evaluation and issue a final decision without the 
benefit of an environmental review.
    This is likely to have unintended and counterproductive 
results. If DOE is forced to make a decision on an incomplete 
record, it may have no choice but to deny the applications. 
That is what happened when Congress passed legislation in 
December 2011 forcing the President to make a decision about 
the Keystone XL pipeline on an unworkable timetable. He 
rejected the application, noting ``the rushed and arbitrary 
deadline insisted on by Congressional Republicans prevented a 
full assessment of the pipeline's impact, especially the health 
and safety of the American people, as well as our 
environment.''\3\ Forcing DOE to deny applications will not 
help LNG export applicants.
---------------------------------------------------------------------------
    \3\The White House, Statement by the President on the Keystone XL 
Pipeline (Jan. 18, 2012).
---------------------------------------------------------------------------
    The other possibility is that DOE will conclude that it has 
no choice but to grant all of the pending applications within 
90 days without an adequate public interest review or complete 
record, since the Natural Gas Act places the burden of proof on 
opponents of an export application. Automatically granting the 
pending applications without meaningful public interest review 
would result in 36 billion cubic feet per day of LNG exports, 
more than three times the exports of Qatar, currently the 
world's largest exporter.
    Exports at that level could have significant impacts on 
domestic natural gas prices and adversely affect American 
consumers and manufacturers. A group of U.S. manufacturers, 
including Dow, Alcoa, Nucor, and Eastman, oppose H.R. 6. In a 
letter to Chairman Fred Upton, they warned that exporting 
``such a large volume of this strategic commodity will also 
raise domestic natural gas and electricity prices for every 
American, undermine manufacturing competiveness and cost the 
nation good-paying jobs.''\4\ Similarly, the United 
Steelworkers oppose H.R. 6, arguing that ``U.S. manufacturers 
enjoy an energy price advantage compared to producers elsewhere 
in the world, which is driving increased production and job 
growth. This must not be squandered.''\5\
---------------------------------------------------------------------------
    \4\Letter from America's Energy Advantage to Chairman Fred Upton 
and Ranking Member Henry Waxman (Apr. 28, 2014).
    \5\Letter from Leo W. Gerard, International President, United 
Steelworkers, to Chairman Fred Upton and Ranking Member Henry Waxman 
(Apr. 29, 2014).
---------------------------------------------------------------------------
    Whether DOE is forced to deny all of the pending 
applications or grant them after a rushed review, the bill's 
unworkable deadline results in a meaningless and inadequate 
public interest review. A meaningful process provides time for 
the agency to consider issues raised by the public and the 
environmental review and allows the agency to make an informed 
public interest determination based on a complete record. A 
public interest determination cannot serve its intended purpose 
if the review is so truncated that it does not provide a real 
opportunity to weigh the pros and cons of an export proposal.
B. The bill is unnecessary
    The basic premise of the bill is that the Department of 
Energy has moved too slowly in approving applications to export 
LNG. However, the record demonstrates that DOE has moved 
aggressively to authorize LNG exports. To date, DOE has granted 
seven authorizations to export LNG to countries without a free 
trade agreement with the United States. DOE has prioritized 
pending applications for which environmental reviews are 
complete and is steadily issuing decisions. The amounts already 
approved for export would transform the United States into the 
world's second largest exporter of LNG, just behind Qatar. If 
one more application is granted, the United States would go 
from exporting no LNG today to being the largest exporter in 
the world in just a few years. DOE has granted numerous 
applications while preserving its ability to evaluate the 
impact of cumulative export levels on domestic natural gas 
prices.
    Proponents of the bill's deadlines argue that DOE has 
allowed some applications to remain in the queue without a 
decision for years. This is misleading. Once DOE completed and 
took public comment on the two-party study of the economic 
impacts of different levels of LNG exports, the department 
began sequentially examining the pending applications. DOE 
subsequently granted six applications, taking about two months 
for each review.
C. The bill will not accelerate the actual export of LNG
    Under the bill, LNG will not be exported from the United 
States any faster. Even though the bill rushes DOE's review of 
applications to export LNG as a commodity, nothing in this bill 
affects FERC's permitting of the LNG export terminals. FERC 
permits have been issued after the DOE authorizations because 
FERC's site-specific examination necessarily involves a 
thorough environmental and safety review. Rushing the DOE 
review will not speed up the permitting and construction of the 
facilities necessary to actually export the LNG.
D. The bill will not result in near-term LNG exports to Europe
    The bill's supporters cite the current geopolitical 
situation in Ukraine as a reason for passing this bill. They 
argue our European allies need access to U.S. natural gas as 
leverage against Russia.
    But the bill will not result in LNG exports to Europe for 
several years, if at all. No LNG export facilities currently 
exist in the continental United States. The first export 
terminal will not begin initial operations until late 2015 at 
the earliest, and export capacity will not ramp up at other 
facilities with authorizations to export LNG until 2017 or 
2018.
    When the United States begins to export significant 
quantities on LNG three or four years from now, it may not even 
go to Europe. The U.S. export terminals most likely to be 
constructed generally have already entered into contractual 
commitments to supply customers in Asia, where natural gas 
prices are higher than in Europe. As Adam Sieminski, the 
Administrator of the Energy Information Administration, 
recently stated; ``Typically where oil goes is not a political 
decision. Same thing goes for natural gas. This is a market 
decision.''\6\ Moreover, Ukraine does not have any facilities 
to import or re-gasify LNG.
---------------------------------------------------------------------------
    \6\It's the private sector, not Congress, that can crack Russia 
energy monopoly--EIA chief, EnergyWire (Apr. 30, 2014).
---------------------------------------------------------------------------
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.
                                   Henry A. Waxman.
                                   Bobby L. Rush.

                                  [all]