National policy on strategic energy asset export transportation

(a)

LNG exports

(1)

Requirement for transportation of exports of natural gas on vessels documented under laws of the United States

Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by adding at the end the following:

(g)

Transportation of exports of natural gas on vessels documented under laws of the United States

(1)

Condition for approval

Except as provided in paragraph (7), with respect to an application to export natural gas under subsection (a), the Commission shall include in the order issued for that application the condition that the person transport the natural gas on a vessel that meets the requirements described in paragraph (3).(2)

Purpose

The purpose of the requirement under paragraph (1) is to ensure that, of all natural gas exported by vessel in a calendar year, the following percentage is exported by a vessel that meets the requirements described in paragraph (3):(A)In each of the 7 calendar years following the calendar year in which this subsection is enacted, not less than 2 percent.(B)In each of the 8th and 9th calendar years following the calendar year in which this subsection is enacted, not less than 3 percent.(C)In each of the 10th and 11th calendar years following the calendar year in which this subsection is enacted, not less than 4 percent.(D)In each of the 12th and 13th calendar years following the calendar year in which this subsection is enacted, not less than 6 percent.(E)In each of the 14th and 15th calendar years following the calendar year in which this subsection is enacted, not less than 7 percent.(F)In each of the 16th and 17th calendar years following the calendar year in which this subsection is enacted, not less than 9 percent.(G)In each of the 18th and 19th calendar years following the calendar year in which this subsection is enacted, not less than 11 percent.(H)In each of the 20th and 21st calendar years following the calendar year in which this subsection is enacted, not less than 13 percent.(I)In the 22nd calendar year after the calendar year in which this subsection is enacted and each calendar year thereafter, not less than 15 percent.(3)

Requirements for vessels

A vessel meets the requirements described in this paragraph—(A)with respect to each of the 5 calendar years following the calendar year in which this subsection is enacted—(i)if—(I)the vessel is documented under the laws of the United States; and(II)with respect to any retrofit work necessary for the vessel to export natural gas—(aa)such work is done in a shipyard in the United States; and(bb)any component of the vessel listed in paragraph (4) that is installed during the course of such work is manufactured in the United States; or(ii)if—(I)the vessel is built in the United States;(II)the vessel is documented under the laws of the United States;(III)all major components of the hull or superstructure of the vessel are manufactured (including all manufacturing processes from the initial melting stage through the application of coatings for iron or steel products) in the United States; and(IV)the components of the vessel listed in paragraph (4) are manufactured in the United States; and(B)with respect to the 6th calendar year following the calendar year in which this subsection is enacted, and each calendar year thereafter, if the vessel meets the requirements of subparagraph (A)(ii).(4)

Components

The components of a vessel listed in this paragraph are the following:(A)Air circuit breakers.(B)Welded shipboard anchor and mooring chain.(C)Powered and non-powered valves in Federal Supply Classes 4810 and 4820 used in piping.(D)Machine tools in the Federal Supply Classes for metal-working machinery numbered 3405, 3408, 3410 through 3419, 3426, 3433, 3438, 3441 through 3443, 3445, 3446, 3448, 3449, 3460, and 3461.(E)Auxiliary equipment for shipboard services, including pumps.(F)Propulsion equipment, including engines, propulsion motors, reduction gears, and propellers.(G)Shipboard cranes.(H)Spreaders for shipboard cranes.(I)Rotating electrical equipment, including electrical alternators and motors.(J)Compressors, pumps, and heat exchangers used in managing and re-liquefying boil-off gas from liquefied natural gas.(5)

Waiver authority

The Commission may waive the requirement under clause (i)(II)(bb) or (ii)(IV), as applicable, of paragraph (3)(A) with respect to a component of a vessel if the Maritime Administrator determines that—(A)application of the requirement would—(i)result in an increase of 25 percent or more in the cost of the component of the vessel; or(ii)cause unreasonable delays to be incurred in building or retrofitting the vessel; or(B)such component is not manufactured in the United States in sufficient and reasonably available quantities of a satisfactory quality.(6)

Opportunities for licensed and unlicensed mariners

Except as provided in paragraph (7), the Commission shall include, in any order issued under subsection (a) that authorizes a person to export natural gas, a condition that the person provide opportunities for United States licensed and unlicensed mariners to receive experience and training necessary to become credentialed in working on a vessel transporting natural gas.(7)

Exception

The Commission may not include in any order issued under subsection (a) authorizing a person to export natural gas to a nation with which there is in effect a free trade agreement requiring national treatment for trade in natural gas a condition described in paragraph (1), or a condition described in paragraph (6), if the United States Trade Representative certifies to the Commission, in writing, that such condition would violate obligations of the United States under such free trade agreement.(8)

Use of Federal information

In carrying out paragraph (1), the Commission—(A)shall use information made available by—(i)the Energy Information Administration; or(ii)any other Federal agency or entity the Commission determines appropriate; and(B)may use information made available by a private entity only if applicable information described in subparagraph (A) is not available.

(2)

Conforming amendment

Section 3(c) of the Natural Gas Act (15 U.S.C. 717b(c)) is amended by striking or the exportation of natural gas and inserting or, subject to subsection (g), the exportation of natural gas.(b)

Crude oil

Section 101 of title I of division O of the Consolidated Appropriations Act, 2016 (42 U.S.C. 6212a) is amended—(1)in subsection (b), by striking subsections (c) and (d) and inserting subsections (c), (d), and (f); and(2)by adding at the end the following:

(f)

Transportation of exports of crude oil on vessels documented under laws of the United States

(1)

In general

Except as provided in paragraph (6), as a condition to export crude oil, the President shall require that a person exporting crude oil transport the crude oil on a vessel that meets the requirements described in paragraph (3).(2)

Purpose

The purpose of the requirement under paragraph (1) is to ensure that, of all crude oil exported by vessel in a calendar year, the following percentage is exported by a vessel that meets the requirements described in paragraph (3):(A)In each of the 7 calendar years following the calendar year in which this subsection is enacted, not less than 3 percent.(B)In each of the 8th, 9th, and 10th calendar years following the calendar year in which this subsection is enacted, not less than 6 percent.(C)In each of the 11th, 12th, and 13th calendar years following the calendar year in which this subsection is enacted, not less than 8 percent.(D)In the 14th calendar year following the calendar year in which this subsection is enacted and each calendar year thereafter, not less than 10 percent.(3)

Requirements for vessels

A vessel meets the requirements described in this paragraph—(A)with respect to each of the 4 calendar years following the calendar year in which this subsection is enacted—(i)if—(I)the vessel is documented under the laws of the United States; and(II)with respect to any retrofit work necessary for the vessel to export crude oil—(aa)such work is done in a shipyard in the United States; and(bb)any component of the vessel listed in paragraph (4) that is installed during the course of such work is manufactured in the United States; or(ii)if—(I)the vessel is built in the United States;(II)the vessel is documented under the laws of the United States;(III)all major components of the hull or superstructure of the vessel are manufactured (including all manufacturing processes from the initial melting stage through the application of coatings for iron or steel products) in the United States; and(IV)the components of the vessel listed in paragraph (4) are manufactured in the United States; and(B)with respect to the 5th calendar year following the calendar year in which this subsection is enacted and each calendar year thereafter, if the vessel meets the requirements of subparagraph (A)(ii).(4)

Components

Waiver authority

The President may waive the requirement under clause (i)(II)(bb) or clause (ii)(IV), as applicable, of paragraph (3)(A) with respect to a component of a vessel if the Maritime Administrator determines that—(A)application of the requirement would—(i)result in an increase of 25 percent or more in the cost of the component of the vessel; or(ii)cause unreasonable delays to be incurred in building or retrofitting the vessel; or(B)such component is not manufactured in the United States in sufficient and reasonably available quantities of a satisfactory quality.(6)

Exception

The President may not, under paragraph (1), condition the export of crude oil to a nation with which there is in effect a free trade agreement requiring national treatment for trade in crude oil if the United States Trade Representative certifies to the President, in writing, that such condition would violate obligations of the United States under such free trade agreement.(7)

Opportunities for licensed and unlicensed mariners

The Maritime Administrator shall ensure that each exporter of crude oil by vessel provides opportunities for United States licensed and unlicensed mariners to receive experience and training necessary to become credentialed in working on such vessels.(8)

Use of Federal information

In carrying out paragraph (1), the President—(A)shall use information made available by—(i)the Energy Information Administration; or(ii)any other Federal agency or entity the Commission determines appropriate; and(B)may use information made available by a private entity only if applicable information described in subparagraph (A) is not available.