PDF(PDF provides a complete and accurate display of this text.)Tip?
Calendar No. 177
116th Congress } { Report
SENATE
1st Session } { 116-75
======================================================================
APPALACHIAN ENERGY FOR NATIONAL SECURITY ACT
_______
August 16, 2019.--Ordered to be printed
Filed, under authority of the order of the Senate of August 1, 2019
_______
Ms. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 1064]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1064) 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, having considered the same, reports favorably
thereon with an amendment, and recommends that the bill, as
amended, do pass.
The amendment is as follows:
On page 5, line 12, insert ``and'' after ``national''.
PURPOSE
The purpose of S. 1064 is to require the Secretary of
Energy (Secretary) to conduct a study on the national security
implications of building ethane and other natural-gas-liquids-
related petrochemical infrastructure in the United States.
BACKGROUND AND NEED
In November 2018, the Department of Energy (DOE) examined
the feasibility of establishing an ethane storage and
distribution hub in the United States, and issued a report
entitled ``Ethane Storage and Distribution Hub in the United
States.'' The report noted that domestic natural gas production
is expected to more than double from 2017 to 2050. The main
driver of total growth in domestic natural gas production is
the continued development of the Marcellus and Utica shale
plays in the eastern United States. If the Appalachian Basin
were an independent country, it would be the third largest
producer of natural gas in the world.
The report highlighted the potential for the new hub to be
built in Appalachia, as well as the economic and strategic
benefits of such a hub. For example, the report noted that 95
percent of current ethylene production capacity in the United
States is clustered along the Gulf Coast in Louisiana and
Texas. This geographic concentration of assets and operations
may pose a strategic risk to the economy of the United States
as extreme weather has significantly impaired domestic
production in the past.
LEGISLATIVE HISTORY
S. 1064 was introduced by Senator Manchin on April 8, 2019.
The Subcommittee on Energy held a legislative hearing on S.
1064 on July 9, 2019.
The Committee on Energy and Natural Resources met in open
business session on July 16, 2019, and ordered S. 1064
favorably reported, as amended.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on July 16, 2019, by a majority voice
vote of a quorum present, recommends that the Senate pass S.
1064, if amended as described herein.
COMMITTEE AMENDMENT
During its consideration of S. 1064, the Committee adopted
an amendment to make a technical correction.
SECTION-BY-SECTION ANALYSIS
Section. 1. Short title
Section 1 sets forth the short title of the bill.
Sec. 2. Findings
Section 2 sets forth Congressional findings based on the
2018 DOE study regarding the economic implications and
feasibility of a potential hub.
Sec. 3. Study and reports on building ethane and other natural-gas-
liquids-related petrochemical infrastructure
Subsection (a) directs the Secretary to conduct a study
within one year of enactment, in consultation with the
Secretaries of Defense and Treasury, and the heads of other
relevant Federal departments and agencies, regarding the
potential national and economic security impacts of building
ethane and other natural-gas-liquids-related petrochemical
infrastructure in the vicinity of the Marcellus, Utica, and
Rogersville shale plays. This subsection requires the study to
identify the potential benefits of the proposed infrastructure
to national and economic security, as well as the potential
risks to national and economic security posed by foreign
ownership and control of United States domestic petrochemical
resources. It also requires an examination of the types of
additional infrastructure needed to fully optimize the
potential national security benefits of the hub; whether
geopolitical diversity of export destinations would undermine
or bolster national security; the necessity of evaluating
public interest with respect to exports for national security;
and the potential benefits of locating the proposed hub in the
area near the Marcellus, Utica, and Rogersville shale plays.
Subsection (b) provides that the relevant Congressional
committees may request and receive periodic status reports on
the development of the required study. This subsection also
requires the Secretary to submit the completed study to the
relevant Congressional committees and publish the report on the
DOE website.
COST AND BUDGETARY CONSIDERATIONS
The following estimate of the costs of this measure has
been provided by the Congressional Budget Office:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
S. 1064 would require the Department of Energy (DOE) to
conduct a study on the national and economic security
implications of building petrochemical facilities for ethane
and other natural gas liquids in the geographic area covered by
parts of Ohio, West Virginia, Pennsylvania, and New York. DOE
would be required to coordinate with several different agencies
to evaluate the benefits and potential risks to economic and
national security.
Using information from DOE, CBO estimates that conducting
this study would cost $1 million; such spending would be
subject to the availability of appropriated funds.
The CBO staff contact for this estimate is Madeleine Fox.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
REGULATORY IMPACT EVALUATION
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 1064. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant economic responsibilities on private individuals
and businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 1064, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
S. 1064, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.
EXECUTIVE COMMUNICATIONS
The testimony provided by the Department of Energy at the
July 9, 2019, hearing on S. 1064 follows:
Testimony of the Honorable Bruce J. Walker, Assistant Secretary, Office
of Electricity, U.S. Department of Energy
introduction
Chairman Cassidy, Ranking Member Heinrich, and Members of
the Subcommittee, it is an honor and a privilege to serve at
the Department of Energy (DOE or the Department), as Assistant
Secretary for the Office of Electricity. DOE is charged with,
among other important responsibilities, providing our Nation
with premier energy research and development (R&D) activities.
The work being conducted by DOE is setting the course for
various advancements in the energy field and beyond. Issues
like energy storage, improving energy efficiency, creating
breakthroughs in how we extract and utilize our Nation's fossil
fuels, and Artificial Intelligence are just some of the
important areas of DOE research. These are also the topics
being covered at today's hearing.
Thank you for the opportunity to testify today on behalf of
the Department regarding these various pieces of legislation.
The Administration continues to review all eleven of these
bills. Below are some highlights and perspectives regarding the
legislation being discussed today.
S. 1064--Appalachian Energy for National Security Act
The United States is now the top producer of oil and
natural gas in the world, with an additional benefit in the
form of increased natural gas liquids (NGL), including ethane.
Ethane is particularly useful as a feedstock for petrochemical
manufacturing.
The Appalachian region has experienced near-exponential
growth in natural gas production, and that production is
expected to increase for decades to come. According to the
Energy Information Administration, through April of this year,
natural gas production in the Appalachian Basin has represented
35 percent of total U.S. natural gas production, and that
number is expected to increase. In addition, NGL processing and
fractionating capacity in Appalachia has grown quickly to match
this increase in natural gas production.
S. 1064 requires a report to Congress on the ``national and
economic security'' impacts of petrochemical infrastructure
near the Marcellus, Utica, and Rogersville shale plays. Under
the bill, DOE has the lead for preparation of the report, in
consultation with the Departments of Defense and Treasury (and
other agencies and stakeholders).
DOE appreciates Congress' attention to the vast energy
resources in Appalachia. This legislation builds upon current
efforts by the Administration. In December of 2018, DOE issued
a report to Congress entitled Ethane Storage and Distribution
Hub in the United States. The report highlights the potential
in Appalachia for the development of a new ethane hub based on
the resource from the Marcellus and Utica shales, and the
accompanying security and reliability benefits derived from
geographic diversity in the nation's petrochemicals
manufacturing base.
This past April, the President issued Executive Order 13868
(``Promoting Energy Infrastructure and Economic Growth''), part
of which requires DOE to issue a report on economic development
in Appalachia in the petrochemical industry. The Department is
currently working on this report, and will share the results
with Congress and other interested parties.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by the bill as ordered
reported.
[all]
