[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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