[Senate Hearing 114-9]
[From the U.S. Government Publishing Office]





                                                          S. Hrg. 114-9

        S. 33, THE LNG PERMITTING CERTAINTY AND TRANSPARENCY ACT

=======================================================================

                                HEARING

                               before the
                               
                              COMMITTEE ON
                              
                      ENERGY AND NATURAL RESOURCES
                      
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   on

                                 S. 33,

           THE LNG PERMITTING CERTAINTY AND TRANSPARENCY ACT

                               __________

                       THURSDAY, JANUARY 29, 2015


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                LISA MURKOWSKI, Alaska, Chairman



JOHN BARRASSO, Wyoming                 MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                  RON WYDEN, Oregon
MIKE LEE, Utah                         BERNARD SANDERS, Vermont 
JEFF FLAKE, Arizona                    DEBBIE STABENOW, Michigan  
STEVE DAINES, Montana                  AL FRANKEN, Minnesota
BILL CASSIDY, Louisiana                JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado                 MARTIN HEINRICH, New Mexico
ROB PORTMAN, Ohio                      MAZIE K. HIRONO, Hawaii
JOHN HOEVEN, North Dakota              ANGUS S. KING, JR., Maine        
LAMAR ALEXANDER, Tennessee            ELIZABETH WARREN, Massachusetts 
SHELLEY MOORE CAPITO, West Virginia

                                 ------                                

                    Karen K. Billups, Staff Director
               Patrick J. McCormick III, Chief Counsel
               Tristan Abbey, Professional Staff Member
          Angela Becker-Dippmann, Democratic Staff Director
              Sam E. Fowler, Democratic Chief Counsel
    Tara Billingsley, Democratic Senior Professional Staff Member
 
 
 
 
 
 
 
 
 
 
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page
Murkowski, Hon. Lisa, Chairman, and a U.S. Senator from Alaska...     1
Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from 
  Washington.....................................................     2
Barrasso, Hon. John, a U.S. Senator from Wyoming.................     4
Heinrich, Hon. Martin, a U.S. Senator from New Mexico............     5

                               Witnesses

Smith, Hon. Christopher A., Assistant Secretary for Fossil 
  Energy, U.S. Department of Energy..............................     6
Cicio, Paul N., President, Industrial Energy Consumers of America    15
Durbin, Martin J., President and CEO, America's Natural Gas 
  Alliance.......................................................    37
Eisenberg, Ross E., Vice President, Energy and Resources Policy, 
  National Association of Manufacturers..........................    50
Koranyi, David, Director, Eurasian Energy Futures Initiative, 
  Atlantic Council...............................................    60

          Alphabetical Listing and Appendix Material Submitted

API
    Statement for the Record.....................................   161
Barrasso, Hon. John
    Opening Statement............................................     4
    Chart entitled ``21 Countries Import More Than 40% of Their 
      Natural Gas From Russia''..................................    74
    Boston Globe article entitled ``In face of opposition, 
      company to reroute gas pipeline''..........................    94
Cantwell, Hon. Maria
    Opening Statement............................................     2
Chamber of Commerce of the United States of America
    Statement for the Record.....................................   163
Cicio, Paul N.
    Opening Statement............................................    15
    Written testimony............................................    17
    Responses to Questions for the Record........................   117
    Macroeconomic Impacts of LNG Exports from the United States--
      NERA Economic Consulting...................................   165
Consumer Energy Alliance
    Statement for the Record.....................................   167
Durbin, Martin J.
    Opening Statement............................................    37
    Written testimony............................................    39
    Responses to Questions for the Record........................   137
Eisenberg, Ross E.
    Opening Statement............................................    50
    Written testimony............................................    52
    Responses to Questions for the Record........................   145
Heinrich, Hon. Martin
    Opening Statement............................................     5
ICF International
    August 29, 2014 paper entitled ``Recent Australian Natural 
      Gas Pricing Dynamics and Implications for the U.S. LNG 
      Export Debate..............................................   169
JAX Chamber
    Statement for the Record.....................................   230
Koranyi, David
    Opening Statement............................................    60
    Written testimony............................................    62
    Responses to Questions for the Record........................   158
Murkowski, Hon. Lisa
    Opening Statement............................................     1
S. 33, the LNG Permitting Certainty and Transparency Act.........   100
Smith, Hon. Christopher A.
    Opening Statement............................................     6
    Written testimony............................................     8
    Responses to Questions for the Record........................   108

 
        S. 33, THE LNG PERMITTING CERTAINTY AND TRANSPARENCY ACT

                              ----------                              --
--------


                       THURSDAY, JANUARY 29, 2015

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:34 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Lisa Murkowski, 
Chairman of the committee, presiding.

  OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM 
                             ALASKA

    The Chairman. I'm calling to order the meeting of the 
Energy Committee this morning.
    Thank you to members and thank you to those on the panel 
for joining us.
    As you know we've had kind of a busy week here on the 
Committee. Senator Cantwell and I have logged a few hours 
standing up in the chamber trying to move the Keystone bill 
through, and our hope is that we're on the final run of that.
    I appreciate our Committee members coming a little bit 
earlier. We had initially noticed this for ten o'clock, but in 
an effort to get through this important hearing and then attend 
to our business on the Floor, we bumped it up half an hour.
    So to our witnesses, thank you for your accommodation as 
well. We appreciate it.
    I want to recognize that Senator Heinrich, as well as 
Senator Barrasso, who are the lead bipartisan sponsors of S. 
33, the LNG Permitting Certainty and Transparency Act, will 
have some remarks this morning so I'm going to keep my comments 
brief.
    I want to recognize them, congratulate them and their co-
sponsors, Senator Capito, here on the Committee, Gardner and 
Hoeven, all members, as well as Senators Bennet, Udall, Toomey, 
Kaine and Heitkamp. I appreciate the work that all of you have 
done to get us here.
    I have long argued that exports of liquefied natural gas 
should be expedited from the United States to our friends and 
our allies overseas. I made the case in my Energy 20/20 two 
years ago and again in two more recent white papers, one called 
``The Narrowing Window: America's Opportunity to Join the 
Global Gas Trade'' as well as ``A Signal to the World: 
Renovating the Architecture of U.S. Energy Exports.''
    Know from the outset that I fully support the bill we have 
in front of the Committee. I think it's the culmination of 
years of legislative work here in the Congress. I can remember 
when Senator Dick Lugar, who introduced it in December of 2012, 
laid out the concept that exports for NATO members should 
receive expedited treatment over at the DOE. As proposals came 
forth, more and more countries were added to this prospective 
list, Ukraine, Japan, India and eventually the entire World 
Trade Organization.
    Just yesterday we voted on Senator Cruz's WTO amendment as 
part of the ongoing Keystone XL debate.
    Last year legislative activity turned to the approval 
process over at DOE. We saw proposals to give the Department a 
time limit for authorizations, these licenses, with the clock 
starting at various points, after FERC final authorization, 
after pre-filing and so forth. Many colleagues co-sponsoring 
this current legislation were involved in those efforts, as was 
our former colleague and member of the Committee here, Senator 
Mark Udall.
    I think we all recognize this legislation in front of us, 
S. 33, is a compromise. Compromises, almost by their 
definition, are imperfect in certain ways, but I think it is 
the result of some very serious work by very serious people 
coming together to try to address an issue. I thank my 
colleagues for all that they have done to come together on this 
matter.
    With that I will turn to my Ranking Member for her 
comments.

 STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Well, thank you, Madam Chairman and thank 
you for the hearing. As you said, we're on the Floor on a 
pretty serious policy discussion on energy and we're having 
this hearing this morning. I think it's obvious to everybody 
we're two female Committee Chairs, but we also have two female 
staff directors and I think that the fact that we're having 
this hearing and the Floor debate at the same time just shows 
that we're capable of multitasking when it comes to energy 
policy.
    So it makes for a busy day.
    We're here to discuss S. 33, a bill to seek acceleration 
and more certainty to the process of determining natural gas 
exports and whether they are in the public interest. As we 
consider this bill and how to discuss it, obviously we are 
interested in taking advantage of America's abundant natural 
gas and its ability to help transform our economy.
    It was only ten years ago we were discussing how we would 
need to import natural gas and how many new terminals we would 
need to build to meet growing demand, but over the last eight 
years natural gas production has increased by 36 percent. 
Today's natural gas has become so plentiful and inexpensive 
that we are reversing the flow and turning those LNG import 
facilities into export facilities.
    We're here today, I think five members of our Committee in 
fact, looking for ways to help speed up that export permitting 
process. I appreciate that they are doing so in a way that 
respects the critical NEPA process, maintains the legal 
requirements for exports to receive a public interest 
determination and I would note however, that the Department of 
Energy recently changed the process to approve these new 
projects. The goal was to speed up the overall approval 
process. As we're considering S. 33, I'm interested in finding 
out whether these issues have actually been addressed.
    So is the new revised DOE process actually working?
    In the five months since the Department of Energy adopted 
its new policy, it has issued four separate approvals for LNG 
export facilities. Of the 37 applications for exports to non-
FTA countries that have been filed at the Department of Energy, 
currently 32 are pending.
    We must consider whether the revised process is the best 
way to evaluate those projects.
    Second, what are the policy implications for the fixed 
deadline? I'm sure we'll get into this discussion here and 
determination about the public interest.
    A fixed deadline is not necessarily always in the 
applicant's best interest as well. What if the authorization 
can't be made in 45 days, but it could be made in 60 days or it 
could be made in 90 days? It would be unfortunate the applicant 
actually could get turned down simply because of the timeline 
this bill lays out rather than from a public interest 
determination.
    Third, is it appropriate for DOE to make the public 
interest decision before the FERC process is completed?
    Right now DOE starts its public interest process after the 
Federal Energy Regulatory Commission approval is issued. The 
bill would require the Department of Energy to start its 
process after the NEPA process is complete, but the FERC 
approval requires more than just NEPA review. The FERC approval 
process includes a robust public comment period to vet the 
siting of these facilities.
    So all of these are important questions that we'll have for 
today's hearing.
    Madam Chair, thank you so much for giving our colleagues a 
chance to be here to discuss this issue.
    I would say besides the five members who support this 
legislation and some of which, as I said, has already been 
implemented, we have great concerns about what is the impact as 
it relates to pricing in the Midwest into natural gas.
    Being from a hydro state, I'm always very aware of how 
energy is the lifeblood of an economy and how much it has built 
the Northwest economy over and over and over again. I also want 
to understand how this legislation will impact our big 
industrial users?
    I look forward to hearing from the panelists who are here 
today to testify.
    Thank you.
    The Chairman. Thank you, Senator Cantwell.
    I want to note for the record that Senator Portman was also 
added as a co-sponsor to this bill, and we appreciate his 
involvement as well.
    I will now turn to Senator Barrasso and Senator Heinrich 
for brief comments this morning before we go to our witnesses. 
As the co-sponsors of this bipartisan bill, I'd like to extend 
them that courtesy.
    Senator Barrasso.

   STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM WYOMING

    Senator Barrasso. Well, thank you very much, Chairman 
Murkowski. Thank you for holding today's hearing on liquefied 
natural gas export legislation.
    Two weeks ago Senator Heinrich and I introduced S. 33, the 
LNG Permitting Certainty and Transparency Act. This bill would 
expedite the permitting process for LNG exports to countries 
which do not have free trade agreements with the United States. 
It would require the Secretary of Energy to make a final 
decision on an export application within 45 days after FERC 
completes the environmental review process. In addition the 
bill would provide for expedited judicial review of legal 
challenges to LNG export projects. Finally the bill requires 
exporters to publicly disclose the countries to which LNG is 
being delivered.
    Our bill ensures that the Secretary will make a timely 
decision on LNG export applications and that legal challenges 
to LNG export projects will be resolved expeditiously. In 
short, our bill will give investors greater confidence that LNG 
export projects will be permitted and built.
    Our bill is carefully crafted, and it's a bipartisan 
compromise. It's co-sponsored by five Democrats and five 
additional Republicans. It is nearly identical to the 
legislation that the House of Representatives passed yesterday 
with the support of 41 Democrats. Like its House companion, our 
bill offers Congress the best chance to do something meaningful 
for LNG exports.
    Study after study have shown that LNG exports will create 
good paying jobs all across America, good paying jobs in states 
like Oregon, West Virginia, Colorado, New Mexico and Wyoming. 
LNG exports will also reduce our nation's trade deficit which 
currently stands at $39 billion. It will even help President 
Obama fulfill his goal of doubling our nation's exports which 
he set five years ago this week.
    Finally, LNG exports are, for the United States, a powerful 
means to bring about positive change throughout the world. LNG 
exports will help increase the energy security of key U.S. 
allies and partners throughout Europe and Asia. LNG exports 
will provide an alternative source of energy to countries which 
Russia has ruthlessly exploited. LNG exports will also give 
countries an alternative to energy from Iran.
    In conclusion, I'd like to thank Senator Heinrich for his 
leadership on this bill. He's been a great partner to work 
with. I'd also like to thank Senators Gardner, Hoeven, Capito 
and Portman, members of this Committee, as well as Senators 
Heitkamp, Kaine, Bennet, Udall and Toomey. Finally, I'd like to 
thank the witnesses for their willingness to testify here 
today. I look forward to the testimony.
    Thank you, Madam Chairman.
    The Chairman. Thank you, Senator Barrasso.
    And again, thank you for your long leadership on this issue 
and that of Senator Heinrich's as well. We'll turn to you, 
please.

STATEMENT OF HON. MARTIN HEINRICH, U.S. SENATOR FROM NEW MEXICO

    Senator Heinrich. Great. Thank you, Madam Chairman, for 
holding this hearing.
    I want to say I very much appreciate the work of Senator 
Barrasso and his staff in working with us putting together this 
bipartisan bill, and I'm incredibly pleased to join my 
colleagues, Senators Gardner, Heitkamp, Hoeven, Kaine, Capito, 
Bennet, Toomey, Udall and Portman, in sponsoring this bill. It 
just doesn't get much more bipartisan than that around here 
these days.
    As the Chair mentioned, our bill follows directly from the 
work in the last Congress of our former colleague, Senator Mark 
Udall and in the House also by our new colleague, Senator 
Gardner. My home state of New Mexico, some of you know, ranks 
seventh in the nation right now in gas production. The main gas 
producing region in New Mexico is the San Juan Basin in the 
Northwest part of the state around the city of Farmington, 
Aztec.
    The good news is we have large reserves of natural gas; 
however, the current surge in gas production has depressed 
prices to less than three dollars per million BTU negatively 
impacting the economies of domestic gas producing regions 
including Northwestern New Mexico.
    I fully support the measured and cautious approach being 
taken by Secretary Moniz and Assistant Secretary Smith at the 
Department of Energy. It makes sense for DOE to complete its 
review of an application for exports to non-FTA countries only 
after the NEPA review has been completed.
    In addition, recent studies show that the industry can 
fully support modest levels of exports of LNG with minimal 
impacts on consumers while boosting the nation's economic 
output and jobs in states like Senator Barrasso's and mine.
    I co-sponsored this bill because I believe it will help 
stimulate job opportunities for my state's gas industry while 
fully preserving both FERC's environmental and safety reviews 
and DOE's determination of public interest including the 
authority to approve or deny applications to export LNG to non-
FTA countries.
    Though our bill allows DOE to continue to independently 
review each application, it will also provide much needed 
additional certainty and predictability to the industry to 
market LNG to non-FTA countries, in Europe and Asia. The bill 
will also provide much needed transparency by making available 
to the public the countries to which LNG has been delivered.
    Thank you again for holding this hearing, and I look 
forward to hearing from our witnesses today.
    The Chairman. Thank you.
    Now we will turn to our panel. We'll begin this morning 
with Mr. Smith and just go down the row. I will introduce 
everyone at the outset here, and then we'll move to five minute 
presentations followed by questions from the members.
    We first have Mr. Christopher Smith, who is the Assistant 
Secretary for Fossil Energy at the Department of Energy. Thank 
you, Mr. Smith.
    Mr. Paul Cicio, who is President of the Industrial Energy 
Consumers of America, welcome.
    Mr. Martin Durbin, who is President and CEO of America's 
Natural Gas Alliance.
    Mr. Ross Eisenberg, who is with the National Association of 
Manufacturers.
    Our last panelist this morning is Mr. David Koranyi, who is 
the Director of the Eurasian Energy Future Initiative at the 
Atlantic Council.
    Welcome to each of you. We can begin with you, Assistant 
Secretary.

STATEMENT OF HON. CHRISTOPHER A. SMITH, ASSISTANT SECRETARY FOR 
            FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Smith. Thank you, Chairman Murkowski, Ranking Member 
Cantwell and members of the Committee. I appreciate this 
opportunity to be here to discuss the Department of Energy's 
program regulating the export of liquefied natural gas and to 
answer questions about S. 33, the LNG Permitting Certainty 
Transparency Act.
    Since 2010 when we began receiving long term applications 
to export LNG to non-FTA countries, the Department has 
demonstrated its commitment to protecting the public interest. 
As you know we conduct a thorough public interest determination 
process, as required by the Natural Gas Act, one that's 
expeditious, judicious and fair. That process includes ample 
opportunity for public input in order to evaluate if an export 
is in the public interest. A determination allows balancing a 
range of important factors including economic impacts, 
international dynamics, security of natural gas supply, 
environmental concerns and market dynamics and developments.
    I testified before this Committee last July, and at the 
time we had just announced a new procedure for processing LNG 
applications. I told you that by focusing our efforts on the 
projects that completed FERC's safety evaluation process that 
reviewed that it would help us to make our decision making more 
effective and efficient and that it would allow the Department 
of Energy to focus on those projects that were most mature and 
therefore, most likely to be constructed.
    Since the announcement of the new procedures FERC has 
completed its decision making process on two projects. The 
Department promptly issued a licensing decision for each of 
those applicants. And in total the Department has approved 5.74 
billion cubic feet per day in final, long term authorizations 
to export to lower 48 LNG to non-FTA countries from four 
proposed liquefaction facilities.
    We've issued thorough orders that can stand up to the 
scrutiny that they are sure to receive, and we've done it 
within days of the project getting signed off from FERC. I 
believe that this demonstrates our commitment to act 
expeditiously and effectively in addressing the Department's 
responsibilities under the Natural Gas Act requirements.
    In conclusion, Madam Chair, I appreciate the Committee's 
interest in discussing this very important issue with the 
Department of Energy, and I look forward to this discussion. We 
understand the significance of this issue as well as the 
importance of getting these decisions right.
    With that, I'd be happy to answer any questions that the 
Committee might have.
    [The prepared statement of Mr. Smith follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Smith. Mr. Cicio.

   STATEMENT OF PAUL N. CICIO, PRESIDENT, INDUSTRIAL ENERGY 
                      CONSUMERS OF AMERICA

    Mr. Cicio. Chairman Murkowski, Ranking Member Cantwell and 
members of the Committee, thank you for this opportunity to be 
here today.
    My name is Paul Cicio, and I'm the President of the 
Industrial Energy Consumers of America. We are an industrial 
consumer advocate.
    IECA is not opposed to LNG exports; however, today there is 
no energy public policy decision more important than whether or 
not to approve an LNG export facility for 20 to 30 years. The 
reason is that all risks associated with the export of LNG fall 
on the consumer. The larger the LNG export volume, the larger 
the cumulative risk.
    Australia has over a 200 year supply of natural gas which 
is more than twice that of the U.S., yet today because of 
unfettered LNG exports domestic prices have tripled because the 
Australian government has failed to protect the consumer. 
Manufacturers are shutting their doors. Power plants are 
converting from gas to coal, and we do not want to see that 
happen here long term if policy makers do not fully implement 
the Natural Gas Act.
    The DOE sponsored NERA report illustrates that LNG exports 
create winners and losers. It explains how higher natural gas 
prices can be expected to have a negative effect on output and 
employment, particularly by sectors that use large amounts of 
natural gas. And that is us.
    Figure 12 of our written testimony is directed from the 
NERA report and shows how exports result in loss of labor, 
income wages, capital income and indirect taxes. Combined these 
accelerate wage disparity, and the net economic gain at its 
peak is a mere $20 billion in 2020 and declines from there. The 
bottom line is that the bulk of the population is negatively 
impacted to the benefit of a few raising questions about how it 
can be in the public interest. Despite this the NERA report was 
used to justify several export applications.
    In their wisdom the Congress passed the Natural Gas Act. 
And they did so with two things in mind, the cost of LNG 
exports to consumers and implications to trade. Congress 
understood that unlike so many other tradable products, natural 
gas is different because consumers do not have a substitute and 
it is not renewable. Congress felt a responsibility to act in 
their behalf to protect the unknowing consumer, who does not 
have the ability to understand the long term implications of 
LNG exports.
    For this reason the Natural Gas Act includes a provision. 
It's called the Public Interest Determination, and it's 
completed for each application to export to non-free trade 
countries.
    However, the Government Accountability Office September 
2014 report says that the DOE has not defined public interest. 
That is a glaring omission, if not a legal issue. If the DOE 
has not defined public interest, how is it that they can make 
informed decisions on behalf of 72 million natural gas 
consumers and 145 million consumers of electricity?
    Without a definition of public interest how much public 
hardship can be inflicted before the DOE denies the next 
application?
    The definition of public interest is not a macroeconomic 
number, like the so called net economic benefit number of the 
NERA report. The real definition of public interest was 
pioneered by Justice Brandeis. ``The public interest is that 
which produces the most good for the most people.''
    Finally, the Natural Gas Act provides for ongoing 
monitoring and adjustment to an LNG application. The Natural 
Gas Act specifically anticipates that adjustments to LNG 
exports would be in the public interest when it states that DOE 
``may from time to time after opportunity for hearing and for 
good cause make such supplemental order in the promises as it 
may find necessary and appropriate.'' So the Natural Gas Act 
creates an obligation for the DOE to monitor and to do economic 
impact assessments at regular intervals to be sure that exports 
do not harm the economy and jobs long term.
    However, contrary to the Natural Gas Act, the DOE has 
stated that it does not plan to monitor impacts and make such 
adjustments. To not do so implies that U.S. policy is designed 
to protect the capital investment of LNG exporters and not U.S. 
manufacturing assets.
    In closing we urge the support of this Committee to conduct 
oversight and require the DOE to conduct rulemaking to define 
public interest, create up-to-date decision making guidance, to 
condition applications for monitoring, conduct economic 
assessments at regular intervals and be prepared to protect the 
public. We urge the DOE from refraining from further approvals 
until such time it makes these necessary rulemakings.
    Thank you.
    [The prepared statement of Mr. Cicio follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Cicio. Mr. Durbin.

  STATEMENT OF MARTIN J. DURBIN, PRESIDENT AND CEO, AMERICA'S 
                      NATURAL GAS ALLIANCE

    Mr. Durbin. Good morning, Chairman Murkowski, Ranking 
Member Cantwell, members of the Committee. Thank you for the 
opportunity to appear before you this morning.
    America's Natural Gas Alliance strongly supports S. 33 as a 
means to establish a timely and certain review process for LNG 
export facilities. This will send a strong pro-infrastructure 
signal to the investment community and a clear message to our 
allies and adversaries that the U.S. is determined to play a 
leadership role in global energy markets. Given the sheer 
magnitude of U.S. shale gas resources there's no question that 
our nation can be a global energy leader without sacrificing 
our domestic advantage. Now is the time to seize this 
opportunity.
    While some have raised concerns regarding supply and price, 
the markets and experience speak for itself. As recently as 
2009 the U.S. Energy Information Administration forecast that 
natural gas prices would rise to 13 dollars by 2035. Just this 
year, though, or last year in 2014, in multiple independent 
projections EIA put that figure below six dollars. If we look 
at where prices are today, it's going to be hard to get there.
    In fact right now in the dead of winter, peak season for 
natural gas demand, prices are less than three dollars at Henry 
Hub and even lower if you're in Pennsylvania. So the markets 
are screaming for new and diversified demand outlets for 
natural gas. LNG exports offer a prime opportunity to send 
critical signals to the markets that these outlets are on the 
way. This in turn will help maintain and grow production so our 
nation can take full advantage of the promise our shale gas 
abundance holds for our economy, environment and energy 
security.
    The U.S. is now the world's leading producer of natural 
gas. With this in context, the U.S. consumed 26 trillion cubic 
feet or TCF of natural gas in 2013. The most recent supply 
projections show a range of technically recoverable gas using 
today's technology from two thousand two hundred to more than 
three thousand five hundred TCF. The only remaining uncertainty 
around natural gas supply is where's the top?
    As technology continues to advance reserve estimates 
continue to grow. As a result public and private sector experts 
agree that the U.S. has enough natural gas at reasonable prices 
to sustain substantial increases in domestic consumption and 
significant levels of exports. Global market dynamics will 
limit both the size of our export opportunity and the number of 
facilities that ultimately receive financing. As a result EIA 
projects that natural gas exports will account for less than 
ten percent of demand for U.S. natural gas by 2040.
    Those same global market dynamics also underscore the sense 
of urgency. LNG facilities cost billions of dollars and take 
several years to construct. Unless we act quickly to provide 
greater certainty in the approval process we miss the 
opportunity to become an integral player in international 
markets.
    Far from competing with domestic interests, LNG export 
markets will strengthen the U.S. economy. Already, the U.S. is 
experiencing a manufacturing resurgence thanks to the ready 
availability of abundant, affordable natural gas. What is less 
widely known is that the natural gas liquids found within 
natural gas are an essential feed stock to many industries led 
by plastics and chemicals.
    Simply put, more dry gas production for export means more 
natural gas liquids for American manufacturers. In fact, as of 
this week the chemical industry alone has identified 220 
announced projects representing 137 billion dollars in 
potential investment all linked to natural gas. So as markets 
scream for demand, exports provide a win/win opportunity.
    Of course LNG export terminals are just one aspect of 
energy infrastructure. Timely approvals of new and expanded 
pipeline projects also require the priority attention of policy 
makers at all levels. As several members of this Committee know 
firsthand, this is particularly true in the Northeast where 
expanded pipeline infrastructure would help consumers and 
unlock the kinds of natural gas fueled manufacturing 
opportunities we see flourishing in so many parts of the 
country.
    I thank Senators Barrasso and Heinrich and the bipartisan 
co-sponsors of S. 33 for working to ensure America's 
competitive advantage. I appreciate the Committee drawing 
attention to these issues and look forward to our continued 
work together to build this energy revolution into a 
sustainable, economic, manufacturing and environmental success 
story for the nation.
    Thank you.
    [The prepared statement of Mr. Durbin follows:]
    
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    The Chairman. Thank you, Mr. Durbin. Mr. Eisenberg, 
welcome.

  STATEMENT OF ROSS E. EISENBERG, VICE PRESIDENT, ENERGY AND 
    RESOURCES POLICY, NATIONAL ASSOCIATION OF MANUFACTURERS

    Mr. Eisenberg. Good morning, Chairman Murkowski, Ranking 
Member Cantwell and members of the Committee. On behalf of the 
National Association of Manufacturers, the largest industrial 
trade association in the United States, I'm pleased to share 
our views on S. 33, the LNG Permitting Certainty and 
Transparency Act. This is a bill that the NAM supports.
    Two years ago I had the privilege of coming before this 
Committee to talk about the exact same issue we're here to talk 
about today. At the time the Department of Energy had placed 
all license applications on a temporary hold while it studied 
the macroeconomic impact of exporting LNG, and that study 
actually forecasted that the U.S. would gain net economic 
benefits from doing so.
    The NAM at the time urged the Committee that the free 
market will find equilibrium here and that exports of LNG 
should be governed by principles of free trade and open 
markets.
    The NAM also urged the DOE to provide LNG license 
applicants an up or down decision as expeditiously as possible 
to avoid market distorting barriers to trade.
    Now some witnesses at that hearing took the opposing view 
calling it a question of validity of the DOE study's findings 
and warning of constrained natural gas supplies, ``unfettered'' 
LNG exports and skyrocketing natural gas prices. Now fast 
forward two years to today and the doomsday predictions really 
just have not come true. Proven natural gas reserves increased 
by ten percent in 2013 setting another new record.
    We don't have anything even remotely resembling unfettered 
LNG exports because only five of the terminals out of 37 are 
under construction. The overwhelming numbers of economists who 
have looked at this issue, including the DOE itself, have all 
repeatedly concluded the LNG exports and a strong domestic 
manufacturing sector can coexist. As of last night the Henry 
Hub spot price for natural gas stood at $2.92 which is a full 
38 cents lower than the day I was here to testify on this issue 
two years ago.
    And throughout, the nation's natural gas boom has sparked a 
manufacturing comeback. That's a wonderful story. Study after 
study has confirmed and continues to confirm that manufacturers 
are investing in the United States thanks to a competitive, 
abundant and secure supply of energy.
    Manufacturers in Arkansas, California, Colorado, Iowa, 
Louisiana, Maryland, Minnesota, Nevada, New York, Ohio, 
Oklahoma, Pennsylvania, Texas, Utah, Virginia and many others 
are already taking part in the LNG supply chain to support the 
terminals that are under construction.
    Dominion's Cove Point LNG facility in Maryland will create 
14,600 jobs in manufacturing, service and other sectors across 
the supply chain.
    Cheniere's $12 billion Sabine Pass project, which is quite 
possibly the largest capital project in Louisiana history, will 
support the livelihoods of up to 18,300 Louisiana residents at 
peak construction at an average of nearly 6,400 Louisiana 
workers over 8 years.
    Now to put 6,400 workers in perspective there's actually 14 
individual parishes in the State of Louisiana that have fewer 
than 6,400 residents employed. The project's supply chain for 
Sabine Pass contains 54 manufacturers in 17 different states. 
This is just the tip of the iceberg as many other manufacturers 
across the United States have made investments in their own 
businesses to position themselves to participate in LNG 
exports.
    At NAM we applaud the DOE for taking a hard look at the 
inefficiencies within its own process and trying to fix them. 
While two license decisions happened relatively quickly after 
the new procedures went in place, we once again do find 
ourselves in a situation where the approvals are starting to 
lag. For Cove Point, a project that received conditional 
approval as far back as 2013, we're now approaching the end of 
the fourth month of deliberations on a final license.
    So the NAM therefore believes that S. 33, the LNG 
Permitting Certainty and Transparency Act, is both timely and 
warranted. This truly bipartisan, heavily negotiated bill 
ensures that the free hand of the marketplace rather than 
bureaucratic inertia will govern international trade by 
providing a 45 day deadline on the DOE to approve or deny 
pending LNG export applications. It does not impact the 
economic, environmental or safety studies that the FERC and 
other agencies are required to conduct, nor does it remove any 
other relevant regulatory requirement.
    By eliminating unnecessary delays, the bill would protect 
against running afoul of our international obligations under 
the WTO. It would provide a clear resolution to the outstanding 
questions surrounding the regulatory approval of the 
infrastructure necessary to allow the export of a product, and 
that's a principle that domestic manufacturers strongly 
support.
    Developers looking to build an LNG facility must subject 
themselves to basically running a gauntlet of a long, complex 
and multifaceted permitting process. At a minimum they should 
be able to rely on some amount of certainty that once they've 
gone through that process and received all their permits and 
approvals that the DOE will quickly decide on a final license 
to export. S. 33 provides this certainty while ensuring that 
all environmental laws will be complied with to their absolute 
fullest extent.
    Manufacturers support S. 33, and we urge the Committee to 
approve this legislation.
    Thank you.
    [The prepared statement of Mr. Eisenberg follows:]
    
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    The Chairman. Thank you, Mr. Eisenberg. And finally, Mr. 
Koranyi.

 STATEMENT OF DAVID KORANYI, DIRECTOR, EURASIAN ENERGY FUTURES 
                  INITIATIVE, ATLANTIC COUNCIL

    Mr. Koranyi. Thank you, Madam Chair. Thank you, Ranking 
Member Cantwell, members of the Committee. I am honored to 
appear before you today to discuss the LNG Permitting Certainty 
and Transparency Act geopolitical implications.
    I will make three brief points in support of the act.
    Point number one, European energy security is a matter of 
national security for the United States.
    As Mr. Putin continues his aggression against Ukraine that 
threatens the Trans Atlantic community as a whole, energy 
import dependence points to a strategic vulnerability of key 
allies especially in Central and Eastern Europe. As a Hungarian 
I witnessed firsthand the devastating effects of the 2006 and 
2009 Russia/Ukrainian gas crises in the region. We cannot be 
sure that another cutoff does not happen, if not this year, 
then the next.
    Furthermore, compromising energy security and corruption in 
the energy sector are at the heart of Moscow's strategy to 
divide our alliance and render it ineffective. OPEC deals cut 
with the Kremlin question a country's ability to conduct an 
independent foreign policy that is boasting their national and 
in the allied interest. This is especially unnerving as the 
European Union needs unanimity to uphold or extend sanctions 
against Russia, a critical element in an allied strategy to 
deter further aggression; therefore, lessening European 
dependence on Russian natural gas is vital.
    The good news is that Europe is finally stepping up to the 
plate, but Europe cannot succeed without the help of the United 
States. Europe has access to multiple sources of piped gas as 
well as LNG supplies. Yet in addition to the risks associated 
with supplies from Russia current and prospective, pipe 
supplies from both the south and the southeast face their own 
challenges due to the turmoil in North Africa and across the 
Middle East.
    Most LNG supplies outside the U.S. are not without risk 
either. LNG exporters such as Nigeria and Yemen are facing 
terrorist and insurgent activity. Producers such as Egypt and 
Indonesia have to grapple with increasing domestic demand that 
limit their export capabilities, and Qatar is the biggest 
energy producer to date. Its LNG tankers have to pass through 
the Strait of Hormuz and the Suez Canal, both potential 
liabilities.
    Meanwhile U.S. LNG supplies do not face such geopolitical 
qualms. U.S. LNG would provide a reliable and competitive 
alternative to the allies in Central and Eastern Europe. U.S. 
LNG would introduce much needed additional liquidity to the 
global gas markets, complement European measures forcing 
Gazprom to act in a competitive manner and send a critically 
important message of strategic reassurance to a region that is 
under the most serious threat since the end of the Cold War.
    Point number two, even if not a single drop of gas makes it 
to Europe, which I believe is a very unlikely prospect, U.S. 
LNG exports will nevertheless substantially improve European 
energy security including that of Ukraine. U.S. LNG is 
admittedly no panacea. In and of itself it will not solve 
Europe's energy security problems nor will it push Russia to 
its knees, but clarity in the LNG export licensing procedure 
would put a downward pressure on gas prices and accelerate the 
interconnection of the European gas markets well before, or 
even in the absence of, a single American gas molecule reaching 
Europe. That is because LNG markets are global. Markets are 
shaped by the future expectations and the mere existence of a 
credible alternative would incentivize infrastructure 
development and put pressure on the dominant supplier, Gazprom. 
LNG recertification terminals enabled both Greece and Lithuania 
recently to secure substantial price discounts from Gazprom.
    Finally, unhindered U.S. energy exports, in general, and 
LNG exports in particular, are critically important for the 
credibility of the United States foreign and trade policy. 
Historically the U.S. has been promoting transparency and open 
markets and opposing resource nationalism to the great benefit 
of the whole world. Introducing that transparency into the 
export licensing procedure would be critical to bolster trust 
in America's global leadership.
    Thank you, Madam Chair.
    [The prepared statement of Mr. Koranyi follows:]
    
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    The Chairman. Thank you. Thank you all this morning for 
your testimony and comments. We greatly appreciate it.
    We'll now begin questions from the members. I would ask 
members to be sure to limit your time to five minutes as we've 
got a lot of folks to get through, and we've got votes that are 
theoretically going to begin around 11 o'clock.
    Mr. Smith, I would like to start with you.
    Reading through both your written testimony and the 
comments you've provided this morning, you've outlined the 
steps that DOE has taken that really get us to a point where 
there is less time between the approvals. I appreciate what you 
have done with the realignment.
    Your testimony states that this legislation is ``not 
necessary.'' Now this is not saying that you don't support the 
legislation. I certainly understand that. Under your leadership 
and with Secretary Moniz, you've issued several final 
authorizations.
    Again, I appreciate the comments and the direction you're 
taking, but I think we here in Congress need to be thinking 
long term. Secretary Moniz has made very clear that he wants to 
work through this process, but I worry that perhaps a future 
Secretary of Energy might not be as favorable to LNG exports as 
we have seen coming out of this Secretary and the 
Administration.
    So the question that I would ask you very directly is 
whether or not you think S. 33, as it is written, is workable 
and achievable?
    Mr. Smith. Well, thank you, Madam Chair, for the question.
    First of all, we understand the intent and interest of this 
legislation. In fact, as I listen to many of the comments that 
have been made here in opening statements, we share many of 
these drives, many of these core values of transparency, 
efficiency, of making prudent public interest determinations. 
So I think we have a lot in common in terms of what we want to 
accomplish, and we understand the intent of the legislation.
    In fact, the changes that the Department has made to our 
internal process have been along exactly those same lines to 
make sure that we're making good, solid, public interest 
decisions that withstand scrutiny. So we think that we are 
currently moving in that direction, and we're using the current 
statute in a way that protects the public interest.
    That said, your direct question is about the workability of 
the legislation that's being proposed. Certainly if this 
legislation is passed as is currently written the Department 
will be able to accomplish the mission. We will, as always, 
accomplish the letter and spirit of the law and we believe this 
is a solution we will be able to comply with.
    The Chairman. Well, I appreciate that. So what you're 
telling me is you can do it. You have been doing it. 45 days is 
workable?
    Mr. Smith. Yes, Senator. Again, if this is the legislation 
that's passed in the current form.
    The Chairman. Understood.
    Mr. Smith. That we can comply with the regulation or the 
law.
    The Chairman. I appreciate that.
    Let me ask you a question regarding LNG and Alaska. As you 
know the facility there on the Kenai Peninsula has been 
exporting LNG since 1969. Some forget that Alaska has been 
engaged in the export business for a long, long period of time. 
Granted, these have been small amounts, but it has been a 
process that has been without interruption. It's been the 
longest export contract that we've had in the country. I think 
it has laid the ground work, most certainly, for things to 
come.
    Of course we also have the bigger project, the Alaska LNG 
project that, I believe, merits a conditional authorization 
from DOE on the basis of what the Department itself has 
described as these ``unique'' features of an Alaska project. 
Not only will the project require the liquefication facilities, 
but you've got an 800 mile pipe that we're dealing with.
    So the question for you this morning is whether it is DOE's 
understanding that this legislation would in no way affect 
Alaska LNG's eligibility for a conditional authorization to 
export to non-FTA countries? Further that S. 33 will, in fact, 
impose a 45 day deadline for the project to receive a final 
authorization after it has completed the environmental review?
    Mr. Smith. Thank you for the question, Madam Chair.
    So, I've actually visited the Kenai facility in Alaska and 
spent time on the North Slope. We've got a keen understanding 
of the opportunities and some of the challenges with all of 
those projects.
    It is my understanding that we've already stated that we 
have held the right to do a conditional authorization for 
projects coming out of Alaska. It's my view that this bill, as 
written, would not change that. We would still have the ability 
to issue a conditional authorization for both of these 
projects, particularly the North Slope project, which has some 
additional complexities that might require a conditional 
authorization.
    In addition, as we read the law as currently written it 
doesn't appear to make any distinction between the lower 48 and 
Alaska in terms of the time limit that it would impose on the 
Department.
    The Chairman. Okay. Thank you. I appreciate that, and I 
also appreciate you going up there and spending some time. I'll 
turn to my Ranking Member.
    Senator Cantwell. Thank you, Madam Chair. I want to be 
clear. I like the natural gas juxtaposed to what we're 
discussing on the Floor which, I think, is a dirtier source of 
fuel, and I definitely like exports. But I like something even 
better than those two. I like cheap, domestic sources of 
energy.
    So I think part of this discussion is how we ensure that 
the U.S. economy takes best advantage of this. I have a bunch 
of different questions, and maybe I can just cue it all up and 
you guys can go from there.
    Mr. Durbin, if you could just talk a little bit about the 
domestic natural gas markets and some of the other uses that 
are going to come into the picture like heavy duty fleet trucks 
and the potential for the maritime industry. We're very, very 
excited about the transition of the maritime industry to 
natural gas as a fuel source, again, to comply with 
environmental issues in places like L.A., Long Beach and all up 
and down the coast. So how do we get that right?
    Mr. Cicio, what price point impacts your business? During 
the Enron crisis, and again, those were very exaggerated rates, 
but the aluminum industry and several other mineral industries 
just had no choice. The price fluctuation came and guess what? 
Those factories shut down forever.
    So these long term contracts get locked in on export at say 
a preferential rate for a long period of time because the 
nature of those contracts. Then the domestic market sees this 
fluctuation based on that international market, not locked in 
to long term contracts. What price point do you start worrying 
about the impact to industry?
    My guess is it's a lot narrower than people might imagine. 
Then the doors shut, and the factory is not open again. It's 
not like you turn the lights back on. This is what we saw in 
the Northwest. Aluminum plants shut down forever and forever. 
Okay? This is very important to Midwest industry issues.
    The third point is, Mr. Smith, I just don't know what 
happens when you get this list and you say, okay, alright, here 
we are. And we're not done. Denied. Okay? So is that denied and 
now you're back at the bottom of a hundred permit list or 
denied and maybe in two years I'll think about you again?
    So my question is the denial part of this legislation is a 
good idea in concept, but I think what it might actually mean 
on projects that really shouldn't be denied is an interesting 
question. I wonder if you have a process?
    So as quickly as people can answer that would be 
appreciated.
    Mr. Durbin. Senator, if I could, to start where the markets 
are for natural gas going forward. It's fairly clear. EIA has 
come with some very good projections on what they think the 
demand increase will be in these areas.
    We think there may be some additional opportunities as an 
industry, but nonetheless, first is power generation. I don't 
think there's any question that we're going to continue to see 
natural gas grow in the power generation market.
    Second is the industrial and manufacturing. Again, 
petrochemicals are going to be a huge part of that not only 
because of the dry gas itself but because of the natural gas 
liquids that we're producing and that's been increasing.
    Third is in transportation. It's over the road, rail, and 
marine. I will tell you that even if we're wildly successful 
there it barely moves the needle as far as demand goes.
    We're all for it. We're pushing for it. We want to see it 
happen everywhere we can, but that's not a huge demand draw.
    Exports, of course, is last.
    Senator Cantwell. Okay, Mr. Cicio, on the price?
    Mr. Cicio. My energy intensive consumers consume about 75 
percent of all the natural gas of the entire manufacturing 
sector. Their operating costs range from about 20 percent 
energy to as much as 80 percent of the cost of making anything 
from plastics, chemicals to fertilizers, cement, steel, 
aluminum, plastic, glass.
    There's two parts to the answer to that question. There's 
no specific price point.
    First on the table is the fact that natural gas is 
subsidized and regulated in so many countries across the world 
that is kept at a low price. For example, China may buy--last 
year they bought LNG at $16, but they were providing that gas 
to their non-residential consumers, manufacturers, at $1.78. 
Alright?
    So when we come to this issue, we are not looking short 
term. We're looking long term because the fact is there are 
uncertainties. In the domestic market in terms of what price 
point can producers produce gas? That can impact investments.
    No one forecasted the price drop of crude oil. That was a 
surprise, and that's impacting investment in oil and gas going 
forward. That will impact the supply. No one forecasted it.
    So we can't answer the question what is the price point, 
but what we do know is from 2000 to 2008 the price of natural 
gas increased by over 200 percent in the United States. That 
was over a 20 percent increase per year, and over that time 
frame we lost 44,000 manufacturing facilities.
    Now those plant shut downs were not entirely because of 
energy, but they were a major part of the plant shutdowns.
    Senator Cantwell. Thank you. Mr. Smith, that's a pretty big 
question. Our time is over, but we can either get a short 
answer or a longer written answer. However, Madam Chair, do you 
want to proceed?
    The Chairman. Very quickly.
    Mr. Smith. I can give a quick answer.
    I think it's important to emphasize that when we look at 
each one of these applicants we are looking at each of these 
applicants on a case by case basis. Each of the orders is a 
long, detailed document that we've endeavored to write in good, 
clear, common sense English that has to address all of the 
points that are made by the interveners in each of the cases. 
So we get varied comments. Some strongly pro, some strongly 
against. And depending on the comments that we get, we have to 
address each of those comments and make our public interest 
determination based on a variety of factors. What we do 
subsequent to that would depend on the individual case. So 
there's not a rubber stamp. There's not a particular answer 
that comes out of a spreadsheet. It would depend on the case.
    Senator Cantwell. Thank you.
    The Chairman. Thank you. I'm now going to turn to Senator 
Barrasso, followed by Senator Heinrich, going a little bit out 
of order with the early bird rule, as the sponsors of the bill 
for their questions and then we'll go to those who are next in 
line which would be Senator Stabenow after that. Senator 
Barrasso.
    Senator Barrasso. Thank you, Madam Chairman.
    Mr. Smith, just following up. You correctly state the 
intent of S. 33 is to add greater regulatory assurance to the 
application, to the applicants for the LNG exports. And as you 
said, the Department does share the goal of transparency and 
certainty of process.
    One of the areas that we disagree a bit is the Department 
is committed to act expeditiously, but I don't think we've 
gotten those results because the DOE has given final approval 
to only five LNG export applications. There are 33 export 
applications pending at DOE. A dozen have been pending for more 
than two years. An additional 13 have been pending for more 
than a year.
    So could you explain a little bit this discrepancy that 
we're seeing here?
    Mr. Smith. Well, thank you, Senator. First of all, I concur 
that, as we understand the intent of the legislation, I think, 
there's some agreement.
    In terms of how the process currently operates. The way the 
Department is operating is that there are two important things 
that a particular exporter needs in order to build a plant.
    They need to have authorization from FERC that shows that 
they can build the plant in a way that's safe. So they have to 
be able to build the plant. They also need authorization from 
the Department of Energy to actually export the molecules. And 
those two together create a project.
    Our process now says that we look at a particular applicant 
after it's completed that FERC process to demonstrate that they 
can actually build the plant safely. In that aspect we've moved 
very quickly. Essentially as soon as these projects have come 
out of the queue, out of the FERC process, we've moved very 
quickly. And in the case of one of the applicants we acted the 
next day, within 22 hours.
    So I think we've demonstrated that our intent certainly is 
to move quickly, but we also have to act in a way that's 
judicious and write these orders in a way that withstands the 
scrutiny that they're sure to receive. There's a variety of 
views that we have to balance.
    Senator Barrasso. So is it fair to say that the Department 
of Energy would be able to comply with the deadline that's set 
in the bill?
    Mr. Smith. That's my view, yes.
    Senator Barrasso. Thank you very much. Mr. Koranyi, it's my 
understanding there are 21 countries now that import more than 
40 percent of their natural gas from Russia. And we have a list 
of those.
    [The information referred to follows:]
   
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    Senator Barrasso [continuing]. In your testimony you stated 
that the United States is in an excellent position to improve 
liquidity on the global LNG market thereby improving conditions 
for Central and Eastern European countries to access LNG and 
that an accelerated process, you go on to say, of LNG export 
licensing would put downward pressure on gas prices in Central 
and Eastern Europe well before even a single molecule of 
American gas might even reach Europe. So would you further 
explain how U.S. LNG exports can help European nations even if 
U.S. LNG is actually not shipped to Europe?
    Mr. Koranyi. Thank you, Senator. That's an excellent 
question. It actually already has because the mere fact that 
the United States no longer imports in large quantities LNG 
from outside the U.S. actually put a downward pressure on 
European pressure already. One of the reasons why Gazprom had 
to renegotiate long term natural gas supply contracts in Europe 
and in Central and Eastern Europe as well is that these 
countries built up LNG terminals, reclassification terminals, 
and they have access to this global energy market. And because 
supplies from Qatar, supplies from Nigeria, from other places 
that were supposed to go to the United States ended up in 
Europe and put a downward pressure on prices. So this has 
already happened in the past couple of years.
    Looking forward if there are additional quantities on the 
international gas markets, LNG markets, that will put a further 
downward pressure on these prices, especially if Central and 
Eastern Europe will manage to complete its regional market 
integration and integrate well into the rest of the EU. So 
there is a single, unified European energy market.
    Senator Barrasso. Thank you. Mr. Eisenberg, you stated that 
the overwhelming number of economists who have looked at this 
issue, including the Department of Energy itself, have all 
repeatedly concluded that LNG exports and a strong domestic 
manufacturing sector can co-exist. Could you expand on your 
comments for that?
    Mr. Eisenberg. Thank you, Senator. That's a really 
excellent point. I've read most of the studies at this point. 
I'm not an economist, but I know a lot of very smart ones, and 
I've read most of them.
    The list is pretty long. They've all basically come out to 
the same place which was NERA. IHS Global Insight, ICF 
International, Deloitte, NERA, again, Baker Institute at Rice 
University, Brookings, they all come to the same spot.
    If I could read you something--NERA actually updated the 
study that it did for the EIA or for the DOE a couple years 
ago. The last page of the Executive Summary has the title, 
``U.S. Manufacturing Renaissance is unlikely to be harmed by 
LNG exports.'' They say, ``Our analysis suggests that there is 
no support for the concern that LNG exports, even in the 
unlimited export case, will obstruct the chemicals or 
manufacturing renaissance in the United States.''
    At the end of the day we're also seeing this is in real 
life on the ground. Everybody is winning here.
    Senator Barrasso. Thank you. Thank you, Madam Chairman.
    The Chairman. Senator Heinrich.
    Senator Heinrich. Thank you, Madam Chairman.
    Mr. Durbin, you've heard the claim that U.S. liquid natural 
gas exports could result in the kind of inflated LNG prices 
that we've seen in Australia or that Australia has experienced. 
Could you talk a little bit about and explain to the panel why 
the Australia example is not directly analogous to the U.S. 
markets, particularly in light of the traumatic differences in 
market size?
    Mr. Durbin. Sure. I appreciate the question, Senator. I 
would say it would be like comparing apples and oranges, but 
I'm not even sure they're both fruits.
    If you look at the size of the economy, our NGDP, we're 
more than ten times greater. Our production of natural gas is 
more than 11 times greater. The infrastructure that we have in 
the U.S. for being able to produce natural gas is just--there 
is no comparison which allows us to be able to produce the gas 
at a much lower cost.
    I think the real important point here is that right now 
what Australia is experiencing is because they're exporting 
literally 50 percent. In fact, more than 50 percent of what 
they're producing, they're exporting. Even in, you know, the 
most--but in the EIA projections show that we'll be exporting 
only nine percent, between nine and ten percent of our 
production in 2040.
    So I think there really is no comparison to make there and 
no threat that the United States would end up experiencing the 
same type.
    Senator Heinrich. My understanding is that our market is 
roughly about 40 times the size of Australia, and we're talking 
about much lower levels of overall exports, correct?
    Mr. Durbin. That's correct.
    Senator Heinrich. Yes. Mr. Smith, I want to turn to you 
real quick. If it were enacted, if this legislation is passed 
and signed, would you expect our bill to change the number of 
applications for exports to non-FTA countries that eventually 
would be approved or disapproved by DOE?
    Mr. Smith. Well, thank you for the question, Senator. I 
honestly think it would be impossible for me to determine, 
based on the language, if this is going to impact the number of 
final applicants. It would depend on the applicants, on the 
conditions at the time, et cetera. So I would demur from making 
any prediction or forecast because these are case by case 
evaluations that we make in a way that's very serious.
    Senator Heinrich. Right. As you know, our bill also 
requires DOE to publish the list of countries that receive 
shipments of liquid natural gas from the United States. Do you 
have a view as to whether or not that would be important 
information for the public to have access to?
    Mr. Smith. We think that more transparency is good. So we 
have endeavored to create a process that's open, that is 
transparent and that makes all this information available to 
potential interveners. So we think that is important.
    Senator Heinrich. Great. I'll have one last question for 
you, and then I will yield back the remainder of my time.
    One of my interests is making sure that we continue to grow 
jobs while reordering our energy infrastructure to recognize 
the challenges that we have with carbon pollution and climate 
change. Natural gas has a unique place within those changes. We 
have limited capacity right now to do electrical storage, for 
example, but natural gas allows us to see them together. 
Different sources of energy in more real time much more 
effectively than old fashioned coal generation just because of 
how fast you can ramp up and down the turbines.
    Do you want to talk a little bit about your thoughts on how 
relatively low natural gas prices that we have experienced with 
current policies will affect the ability to deploy those other 
sources of clean, renewable energies, for example, solar and 
wind power?
    Mr. Smith. Well, thank you, Senator. So I'll focus on the 
natural gas portion. That's the technology program that I 
oversee.
    One general comment that I'll make is that these are long 
term, important and decadal challenges. And so we don't manage 
our technology programs based on the short term fluctuation or 
the futures curve. I mean, we think these are important 
existential challenges, that development of the technologies 
that are going to drive the clean energy economy of the future.
    All of these solutions, from wind to solar to natural gas 
to enhanced geothermal and nuclear, remain core and important 
parts of the Department of Energy's technology program.
    That said, we have seen big fluctuations in natural gas 
prices that have come from a variety of sources, and that is 
something that we have to take into account. We look at the 
importance of price when we look at our public interest 
determination. They impact the price it can have on consumers, 
on manufacturers and a lot of the issues that you've heard here 
on the panel.
    So that is something we're focused on. We think that it is 
very important. But over time as you look at our research and 
development program normally in the area that I manage which 
deals with fossil energy but throughout the Department of 
Energy we certainly have a commitment to making sure that we're 
pushing those technologies here in the United States that are 
going to be important for the clean energy country of the 
future.
    Senator Heinrich. Thank you, again.
    The Chairman. Senator Capito and then Senator Stabenow.
    Senator Capito. Thank you, Madam Chair, and I thank the 
Ranking Member, and I thank the witnesses for being here today.
    I'm very pleased to be here and also to be a co-sponsor of 
Senator Barrasso's bill. Many people think that the shale boom 
is occurring in the Western states, like Senator Barrasso's 
home state of Wyoming. But that is not the case, as we know.
    The Eastern United States and my home state of West 
Virginia have been blessed with vast shale gas reserves, and we 
are just discovering, really, how massive they are.
    If I could illustrate the point for a few minutes let me 
share with you a few facts from the December 2014 Department of 
Energy report on oil and gas reserves in the United States.
    In 2013 West Virginia surpassed Oklahoma to become the 
third largest shale gas reserve state. West Virginia also had 
the second largest discoveries of natural gas reserves behind 
only Pennsylvania. In fact, a full 70 percent of the 2013 
increase in proven gas reserves is because of West Virginia and 
Pennsylvania and the Marcellus shale play.
    We have more than enough gas to power both an industrial 
renaissance back home in West Virginia and to export liquefied 
natural gas. Supplying LNG to our friends and allies decreases 
their dependence on often hostile regimes in the Middle East 
and Russia, as we've heard from the testimony, and as a result 
will increase our own national security, not to mention a huge 
economic boon to certain areas of the country and certainly my 
state of West Virginia.
    I'd like to start with a question for Mr. Smith. Just 
really briefly, as you know the Cove Point LNG facility in 
Maryland has received a finding of no significant impact on 
November 5, 2014. That was nearly three months ago. Can you 
give this Committee an idea of when the DOE expects to provide 
final approval of the Cove Point LNG application?
    Mr. Smith. Thank you for the question, Senator. So under 
our current process we move on these applications in the public 
determination once they've completed the FERC process. That 
includes all of the deliberations that FERC has to make 
including the final notice for rehearing in that process. So we 
watch these as they go through the FERC process. It's our 
expectation that that would probably be concluding, probably, 
in the February time frame.
    And so, depending on FERC finishing that process, that 
would allow us to move forward with our final determination.
    Senator Capito. Thank you. Thank you.
    As we all know the estimates of what the actual reserves 
are is sort of a moving target. It starts slow. It started 
slower, and it seems to be expanding greatly.
    I like the way Mr. Eisenberg framed it that everybody's 
winning, but I'm curious to know from you, Mr. Eisenberg and 
Mr. Durbin, as these estimates of the vast resource change, how 
do your projections on the economic impact they will have and 
job creation and manufacturing resurgence? How does that change 
in your estimates and how closely are you monitoring that as we 
look at what the vast reserves actually provide?
    Mr. Eisenberg. Our policy, and frankly the will of the 
manufacturers that I speak for, is to have a stable, secure and 
consistent supply of natural gas and so because we use it not 
only for electricity but also as a feed stock.
    Senator Capito. Right. Right.
    Mr. Eisenberg. For the many things we do. That's a lot of 
what I do for a living. That's basically, you know, we need to 
keep an eye on policies that are coming out of Washington, the 
states and places like that to make sure that manufacturers can 
still continue to do what they do. And so, obviously, yes, the 
supply matters significantly.
    We are now staring at a situation where EIA every single 
year tells us we have more and more and more.
    Senator Capito. Right.
    Mr. Eisenberg. And so we're very, very optimistic and 
continue to be optimistic.
    Senator Capito. Okay. Mr. Durbin, do you have a response to 
that?
    Mr. Durbin. Yes, and I've got it in my written testimony, a 
chart that EIA puts in there for showing the difference in the 
projections on reserves from 2009 through today and I mention 
that. And again, the point is it's dynamic.
    Senator Capito. Right.
    Mr. Durbin. And what we're saying every year, it's 
increasing. But I think what's really important about this--
even this morning EIA put out a new paper, a new report, or I 
should say a statement. I'm talking about the vast increases in 
ethane crackers and propane facilities.
    Senator Capito. Right.
    Mr. Durbin. All driven by these natural gas liquids that 
are being produced with these greater reserves.
    Senator Capito. Right. We're seeing that in West Virginia 
certainly. I should mention that the Brazilian chemical 
manufacturing company, Odebrecht Braskem, is looking to site a 
major cracker in West Virginia which will have major residual 
economic benefits to that region, and hopefully a resurgence of 
our chemical industry which has shrunk quite a bit over the 
last several years because of the usage of the natural gas as a 
feed stock.
    You know, I understand, Mr. Smith, just quickly when you're 
looking at these wells, I think my time is up and I know we're 
under. As a good former House member I know that I should quit 
when the red light comes on, so thank you. [Laughter.]
    Senator Capito. I'll learn. I'll learn to talk through it 
eventually I'm sure. [Laughter.]
    The Chairman. We like that part of it, Senator Capito. You 
are more than welcome to this Committee. With that we'll turn 
to Senator Stabenow and I thank you.
    Senator Stabenow. Well, thank you, Madam Chair. You know, 
this is a big deal here. We have this great new resource for us 
in America that's giving us an edge that we haven't had in a 
long time in other areas, and how we make this decision is 
really, really important.
    I appreciate very much different states, different 
perspectives, but this is a big deal. And I want to first say 
to Mr. Smith, thank you for DOE not only taking seriously the 
need to move forward, but understanding that you need to update 
your study on economic impact for America and the fact that you 
are doing that. I don't know why we wouldn't wait for that to 
happen if we want to make sure we're doing this the right way.
    So, but I'm going to thank the Secretary and thank you for 
doing that.
    We know jobs are created when we build export facilities, 
right? But we also know, according to the Charles River 
Associates, using natural gas to increase American 
manufacturing output is twice as valuable to the overall 
economy as just jobs in general and creates eight times more 
jobs than exporting. So I don't know why we are not very 
concerned about what Mr. Cicio is saying here.
    You're the end user, right? You're the guys that buy it. 
You're here, and you're buying it for industrial consumers.
    We also have a whole lot of consumers concerned about 
heating oil and costs and so on. So the consumers, as you said, 
are taking all of the risks on this. I'd like you to expand a 
little bit more on this from the standpoint of leveraging this 
great resource. I get it from an oil and gas standpoint. You 
want to sell to the highest user, price. I get that. China says 
we'll take it for $16 rather than American producers at $4 or 
$5, and I get that. But from an American standpoint, what I'm 
hearing, Mr. Cicio, when you're saying that, China buys it for 
$16 last year and then turns around and subsidizes it so their 
folks pay $1.78. So now they're paying $1.78 and you're paying 
$16.
    How is that good for American jobs? I'm desperately 
concerned about manufacturing jobs and getting that eight times 
leverage here for America. I don't want a China first policy 
which I'm afraid this is. I want an American first policy.
    So if you could speak to that, and then also on Australia. 
To me it's not the size of the country, it's how the government 
handled the issue which is exactly what this bill does. This is 
Australia-like in terms of the bill, and I am very concerned.
    I appreciate differences, but I have to say, to me and 
history, folks are going to look back at this and decide what 
were we doing here in terms of Americans and American jobs?
    Mr. Cicio. Well, thank you for that question. When we come 
to this issue we are not thinking short term about and 
particularly looking at the NYMEX and seeing three dollar 
prices out for the next several years. That is not the point. 
We are looking out long term.
    And there's references to how much gas we have, okay? Now 
we look at ten years out. And when we look at the EIA 
technically recoverable resources, we have 58 year supply. We 
don't have 100 year supply.
    So, in terms of jobs, you are correct. We can take that gas 
and create eight times more permanent jobs than if you export 
that gas. We recently looked at the permanent jobs created by 
the export terminals. Great. Any job is a good job, okay? Make 
no mistake. But construction jobs are short term. These 
terminals, the seven terminals first up, create 1,890 permanent 
jobs. When that gas goes offshore, it's gone. Okay?
    All we're doing here is--let's emphasize that we need to be 
looking long term. Each approval puts new demand on the 
marketplace that will, every study says the same thing, 
increase the price of gas. And it will increase the price of 
electricity.
    We cannot forget that there's two parts. We can understand 
that, as I said earlier, manufacturing is subsidized in these 
countries that we are competing with, the real world.
    And so we have to be sensitive. It's not just the price 
that we're paying here in the United States that matters to 
manufacturers who compete around the world. So we need to come 
to this with great care.
    Now for those of you who feel that we never have to worry 
about affordable supply of natural gas then you should be all 
for putting in place the full implementation of the Natural Gas 
Act that has these cautions, that ongoing review of these 
terminals. These applications monitoring and the DOE having a 
requirement to revisit that and be sure that it's not impacting 
the economy because if you feel we have so much gas then you 
know then that trigger will never happen. So you should be 
supportive and not afraid of fully implementing the Natural Gas 
Act.
    The Chairman. Senator Portman.
    Senator Portman. Thank you, Madam Chair. I appreciate your 
having this hearing today, and thanks to the witnesses for 
giving us some great testimony. I represent Ohio which is a 
state that didn't used to be viewed as a great natural gas 
producer. Now we are, thanks to the Marcellus shale find and 
also Utica, most significantly, Utica right now.
    We're also a great manufacturing state, and we're proud of 
that heritage.
    I appreciate the fact that the National Association of 
Manufacturers is here supporting this bill. The Chamber of 
Commerce supports this bill. I support this bill. I'm a co-
sponsor now, because I've looked at all the alternatives. I 
think this is the best balance.
    To Senator Stabenow's point, DOE does have the ability to 
review these plans and approve or disapprove based on the 
impact to the American economy. And that's in this legislation. 
It's a balanced approach. And again, that's why so many 
manufacturers are supporting it.
    Also I will tell you Ohio does a lot of manufacturing for 
facilities including LNG export facilities. I noticed in your 
testimony this morning you talked about Chart Industries, who 
testified in the Ways and Means Committee, an Ohio-based 
manufacturer that's involved in the LNG supply chain. It's 
going to help us with the manufacturing as well, but I do think 
it's important that we have a balance in the legislation.
    I'm really interested in the legislation because of a 
broader interest that I have. I think this regulatory regime we 
have in this country is putting us behind in so many ways. Back 
in the good old days you could get a green light to produce 
something, make something, move forward with a project in the 
United States of America pretty quickly. Now we're ranked 41st 
in the world in the dealing with construction permit category 
by the World Bank.
    We're getting worse. Other countries are getting better. 
Germany is something like number eight. South Korea is 
something like number 12. Capital is flowing to different 
places around the world and not coming here because of the time 
it takes to permit something.
    Yesterday I introduced legislation with Senator McCaskill 
that we also introduced last year that's bipartisan, a balanced 
approach to how do you get at some of this permitting.
    Senator King is a co-sponsor of that legislation. He's got 
an incredible background in this having been a governor, but 
also in the private sector dealing with permitting.
    What I like about this legislation is it doesn't take away 
DOE's approval authority, but it does say you've got to do it 
within 45 days. So it's a certainty.
    I appreciate what Mr. Smith said today about the fact that 
this legislation can be implemented by DOE. That it's enough 
time given the run up to that to be able to understand whether 
this is an appropriate project or not.
    The legislation that we introduced will help more broadly. 
This legislation is specifically with regard to LNG exports, 
but I think it's part of a bigger effort we've got to undertake 
in this Congress and, by the way, consistent with the 2006 and 
2012 transportation bills. Our legislation pretty much mirrors 
that in terms of how the permitting and how the litigation 
reforms work and so on.
    So, Mr. Eisenberg, let me ask you a question. Can you speak 
some more on the importance of the requirement in the bill that 
DOE does approve or deny these pending permits within the 45 
days of a completed NEPA review? Again, Mr. Smith has indicated 
to you he could live with that. I assume you would agree that a 
deadline like this gives DOE ample time to review the 
application, but also is giving investors some certainty that 
this project is actually going to be completed. Is that 
correct?
    Mr. Eisenberg. That's absolutely correct. Thank you. We 
poll our members very regularly. And I want to be clear about 
who we represent. We represent 14,000 members, and that is 
small manufacturers, medium sized manufacturers and large and 
energy intensive manufacturers that are also represented by Mr. 
Cicio's group.
    On balance, we are for regulatory certainty for free trade. 
Regulatory certainty is actually the number one priority of our 
membership right now as we poll them quarterly. It came up the 
most. It was the most frequently cited answer.
    There are two types of regulatory certainty. There's 
regulatory certainty on the front end making sure the 
regulations that are put in place that are new are reasonable, 
and there's regulatory certainty on the back end to make sure 
that when you apply for a permit you can get it.
    Your legislation that you recently introduced, the 
legislation in the RAPID Act in the House, these mirror all 
sorts of other legislation and laws that are in place at the 
states at the federal level that would impose a deadline or 
shock clock or something like this that say you can please, 
please uphold the law but do it in a quick, expeditious 
fashion. That is the closest thing to what our policy at the 
NAM wants on this which is just a quick up or down decision on 
an export license.
    Senator Portman. Let me ask another question to you, Mr. 
Smith and anybody else who wants to chime in.
    I think there is some misunderstanding. And again, I really 
appreciate the leadership Senator Barrasso and Senator Heinrich 
have brought to this. There is some misunderstanding that this 
is the only permit that's needed, but the LNG export 
application is not the only federal permit. What other federal 
permits are you aware of that projects like this are required 
to get? And is that in addition to any local or state permits 
that might also be required? Mr. Eisenberg or Mr. Durbin or 
anybody else?
    Mr. Eisenberg. So sure. Like I said, you have to run a 
gauntlet to get these things. It takes about two years before 
you even pre-file to scope out the site and all of these kinds 
of things. Then you have to go through NEPA which on average, I 
believe, takes about three and a half years by recent studies 
by the government. It can take longer. It can take less.
    But you have all of that time that you have to then have 
basically, have every single agency check the box and make sure 
that everything is compliant with environmental laws, with 
economic interests. That is part of the NEPA process. You do 
examine the economic impact.
    And then you get a final decision. So and once you get 
that----
    Senator Portman. By the way, are there other deadlines 
associated with those permits?
    Mr. Eisenberg. On NEPA, absolutely not. There actually are 
none, and you can actually sue on it for it falls under the six 
year civil statute of limitations. So you can sue, basically, 
forever to delay these things internally. That's part of why 
the Senate is debating Keystone XL right now.
    Senator Portman. Okay, and with regard to state and federal 
permits? Mr. Durbin or Mr. Smith or others who want to chime 
in?
    Mr. Durbin. Absolutely. The Cove Point in Maryland, 
Dominion, is the perfect example where, in addition to 
everything they're doing at the federal level, there are many 
state permits they have to get as well.
    Senator Portman. My time is expired. I appreciate the 
indulgence, Madam Chair, and I appreciate your testimony today, 
gentlemen.
    The Chairman. Thank you, and we turn to Senator Hirono.
    Senator Hirono. Thank you, Madam Chair. Senator Heinrich 
asked Mr. Smith a question regarding if we could create 
administrative or regulatory certainty in the time frame for 
approvals that wouldn't we expect more applications, and Mr. 
Smith didn't want to reply.
    But I'd like to ask the other panelists whether you think, 
in very brief answers, please, whether you think there would be 
more applications if we create certainty as this bill does.
    Mr. Durbin. I don't believe the number of applications is 
going to be affected by the timeline. It's going to be affected 
by companies that believe they were going to be able to get the 
financing, be able to line up customers. Again, these are very 
long term, very expensive propositions.
    So, I think those that are moving forward, knowing that 
there is some certainty at the end, after a very long, 
extensive and again, but a predictable process at FERC. By the 
way, during that entire FERC process DOE is one of the 
cooperating agencies, so they're a part of that effort as well.
    Senator Hirono. Just for clarification, it sounds as though 
the FERC process is a much longer process than what DOE has to 
do once FERC approves.
    Mr. Durbin. Indeed.
    Senator Hirono. Is that correct?
    Mr. Durbin. It is a longer process, but DOE is part of that 
process. And to DOE's credit during that--this entire time, not 
on a case by case basis, but they have been engaged in the 
studies that have been raised several times here with NERA to 
look at the broader national interest, the economic impact and 
those are ongoing.
    So that's why our feeling is having gotten through the FERC 
process they've got the basic, you know, they've got the 
foundational items they need, at that point, to then in a very 
timely and specific way, make a determination.
    Senator Hirono. So I think the rest of you will agree that 
it's the FERC process that's really the big question mark, and 
you wouldn't expect additional or increased applications as a 
result of this bill. I don't want to open a can of worms, but 
are you okay with the FERC process?
    Mr. Durbin. Again, I'll speak for ANGA. We believe that the 
end for the companies that we've worked with. As I've said, 
it's a long, expensive, comprehensive process--but it's a 
predictable process.
    Senator Hirono. Okay.
    Mr. Durbin. It's one they're familiar with and so there 
have not been big complaints about the FERC process.
    Senator Hirono. Thank you. Let's move on.
    I do have one note of caution though about exporting 
natural gas, because it has to do with our ability to predict 
what is going to happen. After all about ten years ago we 
thought we would actually be importing natural gas, so it gives 
me pause.
    Also a state like Hawaii, where we're looking to import 
liquid natural gas, I would love for the industry to help us 
figure out how we can do that and meet domestic needs in a cost 
reasonable way. But that's not for this hearing.
    I understand that the extraction of gas does create a 
byproduct, the methane, and that there are methane leaks, and 
methane is an extremely potent greenhouse gas that contributes 
to climate change. So I would like to ask this of Mr. Durbin. 
Assuming that LNG exports increase and therefore there will be 
more extraction activity, are there efforts by gas producers to 
reduce methane gas emissions during the production process?
    Mr. Durbin. Thank you, Senator, and I'm glad you asked the 
question because the answer is an emphatic yes. Now let me tell 
you what's already happened.
    If you just look at EPA's own data, so this is nothing from 
the industry, on methane emissions from natural gas producers. 
If you go from 2006 which was kind of a peak to the emissions 
we saw in 2012, okay? The reduction of methane just from 
natural gas producers was 39 and a half percent. Now the dates 
are important here. 2006 was before the shale gas revolution, 
so in those six years we've added thousands of wells. We've 
increased production by over 25 percent during that time. Yet 
methane emissions from natural gas production have been reduced 
by 39 and a half percent, and that's going to continue because 
it is in our interest to capture the methane. Methane is 
natural gas. That's what we're wanting to sell.
    It's also just the continued improvements in efficiency and 
innovation in technology in the industry that have us today 
where the most productive natural gas well in the country, in 
Northern Pennsylvania, is producing 30 MCF a day. Ten years ago 
the most productive well in the United States produced only 
five. So the numbers are just for relative scale. We are 
producing a heck of a lot more gas and at the same time methane 
emissions are plummeting within our industry.
    Senator Hirono. So I take it that you would not be in favor 
of EPA of regulating methane emissions from this activity?
    Mr. Durbin. Well, to be clear, it is regulated by EPA under 
current NSPS through volatile organic compound. So--the current 
regulations, you know, we're having all these reductions under 
current regulations. I would argue that EPA does not need 
another new regulation.
    Senator Hirono. Thank you. I think my time is up.
    The Chairman. Thank you, and we are now going to turn to 
Senator Gardner. I will be excusing myself from the Committee 
right now. We're going to start votes here very shortly, and 
Senator Cantwell will be here for a period of time.
    We want to make sure that we get through all members and 
have an opportunity before the panel, so it's going to be a 
little bit choppy from here on out. I apologize that I won't be 
able to hear your further comments, but please know how much I 
appreciate what you have provided the Committee today. This is 
a very important issue. I think we recognize that. And again, I 
appreciate the level of cooperation that we have had. I think 
we have a compromise bill that will be helpful to the country.
    With that, I will turn to Senator Gardner, and he will be 
followed by Senator Franken.
    Senator Gardner. Thank you, Madam Chair, and thank you 
also, Ranking Member Cantwell, for the hearing today. Thanks to 
our witnesses for your time.
    Over when I was in the House of Representatives we 
introduced H.R. 6, the Domestic Prosperity and Global Freedom 
Act, that we passed with overwhelming bipartisan support. One 
of the things that made that bill so successful was many of the 
statements made today by the witnesses including conversations 
that we had with people like Dr. Orbaan from Hungary and others 
who recognize the national security implications of a strong 
and vigorous opportunity for the United States to share in our 
energy security with our partners around the globe.
    So today we are talking about Senate bill 33, a very short, 
straight forward piece of legislation, granting approval for 
LNG export applications already pending or languishing, 
depending on how you look at it, at the Department of Energy. 
It's not too often that we share in these kinds of 
opportunities where you have a bipartisan bill that will create 
jobs, create energy security, and add to our national security, 
all at the same time. Something that I wish we could do more 
of.
    I do believe this has the opportunity to create a number of 
American jobs across this country including in Colorado, my 
home state, one of the nation's leading producers of both oil 
and natural gas and renewable energy as well.
    Mr. Smith, a question for you just to start with.
    Dr. Paula Gant with the Department of Energy testified last 
Congress, the 113th Congress, that the Department of Energy is 
keenly interested and invested in the energy security of our 
allies and trading partners. Do you think American LNG exports 
add to the energy security of our allies?
    Mr. Smith. Well, thank you for the question, Senator. So we 
look at a variety of factors including international aspects. I 
would say that currently the fact that we are importing less 
LNG than we had expected is already impacting global markets 
and that's benefitting our allies and trading partners. The 
fact that U.S. producers are potentially out negotiating 
contracts in advance of any terminal being built has an impact 
on global markets. So we think that all those things are 
positive, and those are things that we explicitly care about 
and note in our applications.
    Senator Gardner. Okay. Reading between the lines it is 
clear that you believe the Department of Energy believes that 
exporting LNG adds to the energy security of our allies?
    Mr. Smith. We believe it has an impact, yes.
    Senator Gardner. Mr. Koranyi, you believe in the same 
position, correct?
    Mr. Koranyi. Absolutely, and that actually goes back also 
to Senator Barrasso's question as far as the future is 
concerned. So we have this past benefit of diverting energy 
supplies that were supposed to come to the United States.
    Also looking into the future, if you look what the 
traditional wisdom says that because Asian gas prices are 
higher most of the supplies will go to Asia. I'm not really 
sure about that.
    If you look at Cheniere's contracts, a bulk of those 
actually are going to European countries, European natural gas 
suppliers. They will provide gas to Spain, and they will 
provide gas to the UK.
    Asian gas prices, since last February, came down by 47 
percent. So the gap between European and Asian prices is not 
that big. If there is another cutoff from Russia through 
Ukraine, then that very quickly could send up European natural 
gas prices. So to sum up, yes.
    Senator Gardner. Mr. Smith, again, you, in response to the 
question by Senator Barrasso you had mentioned that, or I 
believe maybe it was the Chairman, you had said that the 45 day 
timeframe in S. 33 was workable. Is that correct?
    Mr. Smith. That's our view. We could comply with the law.
    Senator Gardner. Do you have the same view about 
Representative Johnson's bill in the House that moved through 
the House yesterday? I think it's a 30 day timeframe.
    Mr. Smith. I haven't compared the details, but overall I 
can say that the 45 day limit in this bill is something that we 
could comply with.
    Senator Gardner. Okay. Mr. Durbin, Dr. Daniel Yergin 
testified in front of Congress that the United States is demand 
constrained, not supply constrained. This was testimony last 
Congress, again, when it comes to natural gas. In Colorado on 
the Western Slope the Piceance Basin has been suffering due in 
part to the overabundance of natural gas supplies. Would you 
agree with Dr. Yergin that the U.S. is demand constrained and 
not supply constrained?
    Mr. Durbin. Absolutely, and if anything it's a matter of 
infrastructure that we need to be focusing on that.
    Senator Gardner. If we are demand constrained, as you said 
that we are, does that lend itself to having too much supply 
and therefore drive down investment in new production?
    Mr. Durbin. Absolutely.
    Senator Gardner. And is that something S. 33 could achieve, 
as well as giving our production investment opportunities a 
chance to once again flourish and make new investment?
    Mr. Durbin. Yes, by making clear that we have a new, robust 
demand outlet here. It will provide consistency. It will 
provide the incentive and the motivation for the industry to 
continue the production not only in the gas for exports, but 
for the natural gas liquids and everything else is going to 
drive the manufacturing here in the United States.
    Senator Gardner. Well, I too want to keep in line with the 
spirit of Senator Capito and the House coming over here, when 
the red light comes on. Once again I want to express how 
important this legislation is when it comes to national 
security. I know last Congress there was significant debate 
amongst people whose states have put moratoriums in place on 
practices like hydraulic fracturing, who voted for the LNG 
export bill knowing full well that our potential to export LNG 
is only available because of our opportunities to utilize 
techniques like hydraulic fracturing. They understand and 
recognize the importance of an abundant supply of energy that 
we can share with our allies and what it means for national 
security. I hope that that continues to be a part of this very 
important debate.
    Senator Barrasso [presiding]. Thank you, Senator Gardner. 
Senator Franken.
    Senator Franken. Well, I'll pick up from Senator Gardner 
there. We're able to do this because of hydraulic fracturing, 
and I want everyone here to understand who developed that 
technology and who is responsible for that. It's the taxpayers 
of the United States.
    Mr. Durbin talked about how in 2009 projections of the 
supply of natural gas going out were so low that the prices 
were going to be very, very high and mentions that now they're 
much lower than the projections.
    We're hearing Senators talk about discoveries of reserves 
of natural gas in their state as if this is just a discovery 
that happened out of nowhere.
    This is because of the taxpayers doing investments in 
research, into three dimensional, micro-seismic imaging done in 
Sandia National labs. Please listen to this because I say this 
over and over again in this Committee. This whole renaissance 
in natural gas is due to research done by the Department of 
Energy, paid for by the United States taxpayers and projects 
done with the oil and gas industry in horizontal drilling.
    Understand this didn't come out of nowhere, and let's have 
some historical context here. Who paid for this? Who is 
responsible for this unbelievable renaissance? The American 
taxpayer, and that includes the Minnesota taxpayer.
    Now, do you know how much natural gas we produce in 
Minnesota, just as an estimate? Mr. Durbin.
    Mr. Durbin. I am not aware of natural gas production in 
Minnesota, Senator.
    Senator Franken. Zero. This does us no good whatsoever. 
This does Minnesota no good whatsoever.
    The EIA just says this is going to increase the price of 
natural gas. This is going to increase the price of electricity 
to every Minnesotan, of heat to every Minnesotan, the cost of 
operations to every Minnesota manufacturer. This does my state 
no good whatsoever.
    Now I would appreciate it if those from the other states 
who will benefit--the benefits of this, the jobs, the GDP 
growth and the jobs will be very concentrated by sector and 
region.
    Mr. Durbin, you represent the natural gas producers. I 
would venture to say that your sector will benefit from it the 
most. Don't you think?
    Mr. Durbin. We certainly are benefitting from it, Senator, 
but I would argue with your contention and say that the entire 
nation has been benefitting from this. If we didn't have this 
natural gas revolution----
    Senator Franken. The nation has been?
    Mr. Durbin. If you didn't have the production, the prices 
where they are, you wouldn't have manufacturers in Minnesota 
that would be able to take advantage of it.
    Senator Franken. So you should be thanking the taxpayers of 
Minnesota.
    Mr. Durbin. I don't think----
    Senator Franken. Don't reward them by raising----
    Mr. Durbin. I don't take question with either your 
contention of DOE's role in helping us get to this point.
    Senator Franken. Okay. I only have a little bit of time, 
sir. The point is there's no benefit at all for the people of 
Minnesota in sending this abroad. This is what will happen is 
this will benefit--the steel workers are against this.
    At Minntac in Minnesota they mine iron ore and make pellets 
called taconite. They heat those pellets up to 25 hundred 
degrees Fahrenheit with natural gas. This is going to drive up 
the cost of natural gas.
    This is going to hurt Minnesota. This is why the steel 
workers are against it, the United Steel Workers. Manufacturing 
creates eight times as much jobs. Yeah, if you export a natural 
resource the people who produce that natural resource benefit, 
but it doesn't do anything like the kind of--create the kind of 
jobs that we, in Minnesota, have created because of this 
technology that we, taxpayers in Minnesota, helped to promote.
    So I just want this perspective. And going forward, I know 
my time is up, but I've been here a little longer than Senator 
Capito.
    So I just want, going forward, for members when they talk 
about this natural gas renaissance to understand where this 
came from. Aside from this subject on natural gas when we're 
talking about renewable energy, when we're talking about all 
energy, let's understand the role that research, basic research 
and applied research, have played in our nation in making sure 
that we are energy independent.
    Thank you.
    Senator Barrasso. Thank you, Senator Franken. Turning to 
Senator Cassidy let me just remind the Committee and point out 
that the Committee heard concerns about natural gas prices two 
years ago.
    Prices have fallen since then, and the Obama Administration 
has issued three separate studies showing that natural gas 
prices will remain low with LNG exports. The Administration's 
most recent study shows that prices will remain low even if the 
Department of Energy approves four times the amount of LNG 
exports that's already approved, so at least four additional 
studies have confirmed the Administration's findings.
    Senator Cassidy.
    Senator Cassidy. Yeah, to speak of the pervasiveness of the 
benefits of fracking. I have an article right here where 
Minnesota actually produces much of the frack sand. So the 
price of fracking sand has increased much to the benefit of 
Minnesotans and Wisconsins. The benefit of this was George 
Mitchell taking the DOE research, but actually commercializing 
this. He even goes to Minnesota which is really good.
    I have a couple questions though. One related to that, one 
to another.
    In Haynesville this is about jobs. Let me tell you there 
are families struggling because they don't have jobs. We know 
there's going to be a downturn in employment in the oil patch 
because of the falling oil prices.
    I'm interested if we can increase the jobs in natural gas 
production because of an exportation. Haynesville shale is in 
North Louisiana, and that play has decreased production because 
it's dry gas. That's not what the people want to make 
petrochemical products.
    Mr. Durbin or Mr. Smith, do you all have an idea of how 
many jobs will be created if we could unshutter those closed 
down wells in places like the Haynesville and begin to ship 
that dry gas to markets that actually want dry gas? Mr. Durbin, 
any idea of how many jobs would be created by that?
    Mr. Durbin. Well, I don't have the specifics to that, but I 
know there have been several studies. In fact, NAM had one done 
with PricewaterhouseCoopers that show with expanding natural 
gas development we could create a million jobs in the 
manufacturing sector across the country. So there's no question 
that by providing for these exports you have now a much more 
certain demand outlet for this product, and we're very 
fortunate here in the U.S. that natural gas prices and oil 
prices are largely decoupled.
    Senator Cassidy.  So if we increase that production, by the 
way, we'll also be decreasing the demand for steel pipe which 
is produced in places like Minnesota, Ohio, et cetera, correct, 
fair statement?
    Mr. Durbin. We'd be increasing demand, yes.
    Senator Cassidy. Absolutely. Mr. Smith, it seems this has 
been a great hearing, but I have a perception, it may be false, 
but there's a certain kind of languidness about the approval of 
some of these permits. Now that may be a perception. I, myself, 
I'm happily married which means I speak of my perceptions, not 
of what I know, okay?
    So that said, when I look at the FERC and DOE processes 
FERC says I understand under DOE there's a statement that they 
want to look at the life cycle, the increase in life cycle 
methane emissions if exportation requires increased production 
of gas. FERC says in their approval process they cannot 
ascertain that, therefore they do not consider it.
    The fact that DOE would consider something which FERC says 
is an imponderable to me makes me wonder if they're just, 
before I throw all the bells, that they're almost inviting 
litigations by those who wish to retard this process. So why 
would DOE consider something which FERC considers an 
imponderable?
    Mr. Smith. Well, thank you for the question, Senator. For 
aside, I certainly challenge the characterization of 
``languid'' as a process. The most recent authorization that we 
issued, we literally issued one day after the FERC process was 
completed.
    Senator Cassidy.  As I would say to my wife, I apologize. 
[Laughter.]
    Mr. Smith. Duly noted. Thank you, Senator. So in terms of 
the FERC process and DOE/FERC process, I think it's important 
to consider the fact that we are looking at two very different 
considerations, two very different decisions.
    The job of FERC is to determine if the plant itself can be 
both safely built and the print of that plant itself is 
consistent with the values of safety and environmental 
sustainability. So that's what FERC looks at. Can the applicant 
build that terminal on that footprint?
    Senator Cassidy. Don't you also consider the life cycle, if 
there would be an increase in the life cycle release of methane 
or greenhouse gases relative to increased production?
    Mr. Smith. So that is what the Department of Energy looks 
at, and the Department of Energy is looking at giving the 
applicant the ability to actually export the molecule.
    Senator Cassidy. Correct.
    Mr. Smith. We have to look at all the things that would be 
impacted, all the things will be part of a public interest 
determination of giving the applicant that ability to export 
that molecule. And that includes a lot of things that are 
surrounding----
    Senator Cassidy. But particular consideration is going to 
be full of assumptions. For example, Mr. Durbin has pointed out 
since 2006 there's been a dramatic decline in emissions. So you 
have to predict what in 2022 will be the rate of emissions.
    Mr. Smith. Right.
    Senator Cassidy.  You also have to guess the market. You 
also have to guess the transportation of its life cycle and how 
much is through pipeline and how much is through whatever.
    So it seems, again, an imponderable. But the fact that it's 
a variable with lots of variables makes me wonder why is it in 
there?
    Mr. Smith. Well, Senator, you're actually very nicely 
framing the challenge of this incredibly important public 
interest determination. These are decadal investments. The 
decisions that companies make now in terms of spending billions 
of dollars to build plants are going to have an impact on our 
economy, on our environment, on job creation, on a lot of 
things we care about for a very long period of time. In its 
very nature a lot of that does involve a lot of diverse views.
    I hear from Mr. Cicio's members. I hear from Mr. Durbin's 
members. And they have different views.
    Senator Cassidy.  But that----
    Mr. Smith.  But we do have to consider a lot of different--
--
    Senator Cassidy. But really we don't know which of those is 
correct. So if we have a variable in which we cannot possibly 
know with any kind of the r square, the statistical analysis of 
the correlation is going to be huge.
    Mr. Smith. Right.
    Senator Cassidy. And so therefore you are picking a number 
which is subject to political considerations. Do we want to 
approve this or not? I think that would be the fear. And we can 
prove one which has a big number of methane release or one that 
says no, this is the glide path. We think it will come to down 
to your lower number.
    Mr. Smith. Well, Senator, our job is to make good public 
interest determination. And one thing that I'd point everybody 
to is when we issue an order it's not a sticky we put up on the 
wall that says yes or no. We actually issue a very complex 
document that has to take into consideration all of the 
arguments that have been made by all of the different 
stakeholders that intervene in this process.
    They include Mr. Cicio's members. They include Mr. Durbin's 
members. They include all of the diverse ideas that we've heard 
here in this very hearing.
    Our goal is to write an order that's clear, that's 
consistent with the letter and spirit of the law and that's 
going to withstand the scrutiny that it's sure to receive.
    Our goal at the end of the day is that should we approve a 
particular applicant that they can look at that order and that 
applicant has the confidence and go and spend the multiple 
billions of dollars that it takes to build that terminal 
because they can see that we've had a thorough process that's 
consistent with the letter and spirit of the law.
    It does require us to think about assumptions, but make 
those assumptions clear and explicit in a way that withstands 
scrutiny.
    Senator Cassidy. Well, I'm out of time, way over. I yield 
back. Thank you.
    Senator Barrasso. Senator King.
    Senator King. Thank you, Senator. First I want to say I'm 
good with regulatory reform. I like bills that generally lay 
out clear regulatory guidelines and time. I'm also good with 
natural gas.
    So good with it, in fact, that I don't want to blow an 
advantage that this country has. I have been to factories, 
gentlemen, and looked in the eyes of people who have lost their 
jobs to Asia, to other parts of the world, to Mexico. And they 
looked at me and said, how did you let them ship my jobs away?
    We have no advantage on wages. We have no advantage on 
labor protections. We have no advantage on environmental 
protection. We have today an advantage on energy costs. I 
cannot understand this discussion that will inevitably lead to 
higher energy costs.
    Mr. Eisenberg, I can't understand an organization called 
the National Association of Manufacturers supporting this 
program. This bill, maybe. I understand because this is really 
a regulatory bill. But the larger issue is what really concerns 
me. Right now if you export, if we export to China, add in the 
cost of transportation, the cost of liquefication, un-
liquefication, you're talking $10 dollars. China is paying $12 
or $13, so we're giving them a 30 percent cut in their energy 
cost. I just don't get it.
    Now Mr. Durbin, you testified that you thought projected 
out 10 years, 20 years, 30 years, I think you said 2040, nine 
percent would be all we'd be talking about. Would you accept a 
friendly amendment to this bill that the limit that the 
presumption of the public interest would be reversed if the 
export was more than nine percent of domestic production?
    I believe you when you say it, but I subscribe to President 
Reagan's admonition, ``Trust, but verify.'' I trust the 
industry when they said, oh, we only want us to do just a 
little bit. It's not going to really affect the price that 
much. And there's endless supply. And it's all going to happen.
    Okay, fine. Let's put it in writing. Ten percent I'll go 
with. Nine percent is what you said. So maybe that's where we 
ought to start the negotiation.
    I think this moment will be looked back at, at a time when 
Americans say what were you thinking when we have, what I call, 
America's second chance at manufacturing, but we're going to 
give it away. Mr. Durbin.
    Mr. Durbin. Sure.
    Senator King. There's a question in there somewhere.
    Mr. Durbin. Yeah, and I'm happy to answer it. I think the 
problem is we're posing a question as an either/or that we can 
only have this abundance of natural gas domestically for our 
manufacturing or we can export it. We have both. We can do 
both. The issues that certainly manufacturers in New England 
need to be concerned about is pipeline constraints, getting 
those pipelines. And I----
    Senator King. Oh, that's a separate issue.
    Mr. Durbin. I know you're a very strong supporter of that, 
and I appreciate that.
    Senator King. Our natural gas prices were the highest in 
the world last winter, the world.
    Mr. Durbin. Exactly. So I mean----
    Senator King. That's a pipeline problem.
    Mr. Durbin. But if you look at the estimates, not industry 
estimates, but the government estimates about how much 
production is going to increase, what demand is going to--how 
demand is going to increase, going out to 2040. We are going to 
be outstripping consumption and demand here all along.
    Senator King. That's fine. All I'm saying is put it in 
writing.
    Mr. Durbin. But I think the other aspect of----
    Senator King. Accept a cap on the export so that we don't 
end up with Australia. We're producing 75 BCF a day. In the 
queue is 38 BCF a day for export. That's more than half, and 
that's what you said was the problem. You said, oh that will 
never happen, that's Australia.
    But that's what worries me. If there's no limit here and 
there's no definition of the public interest in the statute 
that these guys are administering, I'm just saying let's define 
it.
    Mr. Durbin. I'd say the limit is being provided by the 
global markets. We're not going to be exporting ten, 15, 20, 
whatever, or the----
    Senator King. Why not if they're going to pay 12 or 15 over 
there, why wouldn't we?
    Mr. Durbin. Because the markets--if we're going to be 
exporting that much it's going to be because gas prices here 
are so low and we have enough to provide it to those markets 
that they're willing to pay.
    I mean, you can see the global market dynamics right now 
are going to influence the number of facilities that are going 
to be built, and that's always been the case.
    Senator King. Mr. Cicio, what do you think?
    Mr. Cicio. Look at Australia, alright? So, okay, the scale 
is different. I agree with what was said earlier, but the 
government did not provide the necessary safety nets. The 
resources that they have in Australia were contracted out under 
long term contract to ship LNG offshore to customers at higher 
prices.
    Senator King. And once you do that you're locked in.
    Mr. Cicio. Those are--yeah. And so the reserves were not 
available for the Australian consumer anymore, and that's why 
prices went up and the Australian consumer now is being asked 
to pay an equivalent net back price to that LNG price that they 
would sell to Japan or South Korea or China. And so, again, 
think long term here.
    Senator King. That's----
    Mr. Cicio. Again if there's lots of resources everybody 
should support putting the necessary full implementation of the 
Natural Gas Act in the safety net for the consumer.
    Senator King. Well, thinking long term it seems to me a 
simple solution is to cap the amount of exports as a percentage 
of domestic production. Then you can say, okay, there will be 
some effect on gas prices, but it isn't going to be 
catastrophic like it was in Australia.
    There's one law Congress can't repeal, the law of supply 
and demand, and if you increase demand Economics 101 says the 
price is going to go up. So you can't deny that the price is 
going to go up. That's the whole point.
    But the question is how far is it going to go up? I realize 
you've got to have a price that's sufficient to call forth the 
production and open the wells and all those kinds of things. I 
don't know exactly where that number is, but if we take an 
action here in this Congress to just open the door and end up 
with an Australia situation, shame on us, in my opinion.
    Thank you, Mr. Chair.
    Senator Barrasso. Well, thank you very much, Senator King. 
And before turning to Senator Daines, I want to, without 
objection, put into the record an article from the Boston Globe 
by Jay Fitzgerald, December 5th, 2014 outlining the concern 
with natural gas in New England last year related to inadequate 
pipeline capacity to get the gas to where it needed to go.
    Senator King. Absolutely. I'm fully in agreement with that, 
on that problem. Thank you.
    Senator Barrasso. Thank you.
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    Senator Daines. Thank you, Mr. Chairman. I remember back in 
the 70s I was going to high school and in the early 80s when I 
was going to college studying chemical engineering and hearing 
the concerns about someday we're going to run out of oil and 
what that might mean to the United States and mean to the 
world. Here we sit today as we've shifted from what used to be 
a scarcity mentality, certainly, on oil and natural gas. Now 
we're in an abundance mentality.
    The Bakken formation bleeds into Montana. We are seeing 
firsthand what's going on with hydraulic fracturing, with oil 
production, with natural gas production, and I can tell you we 
would like to produce more natural gas in Montana. Our natural 
gas production has declined for lack of demand, and this 
intersection of the demand and also the transmission issues and 
the pipeline issues that the Senator from Maine was painfully 
aware of last winter. I believe as we move to an abundance 
mentality, as we gain more production which increases the 
supply chain and pipelines ultimately the person who wins is 
the American consumer.
    As we've seen what's happened with oil where with the drop 
in oil prices we're going to go from $3100 per average 
household expense of oil to $1900. That's $1200 a year for the 
average American household as a result of what's happened here 
in America and the shale play.
    The geopolitical implications are significant. I saw 
Senator Barrasso's chart. I was struck by the dependency of the 
European nations on Russia for natural gas.
    I remember when I was serving back in the House in the last 
term getting letters from leaders from the European nations who 
were looking to America for energy leadership. How can we now 
start supplying natural gas to Europe instead of the dependence 
upon the Putin regime? So I'm very excited about where this 
might lead to.
    In terms of global competitiveness I was a manufacturing 
guy for years. I had a day job in the private sector for 20 
years before I came up here. I looked at operations in China. I 
managed an operation to Asia/Pacific.
    What these mean? Low energy and low natural gas prices and 
the ability to export is great for global competitiveness to 
bring these manufacturing jobs back to America. We can't 
underestimate, I think, the national security implications as 
well. This is a very exciting discussion. It's been a great 
hearing for me.
    But I was struck, Mr. Eisenberg. You made a comment, and I 
guess let's bring it back to the scope. I've been up here at 40 
thousand feet. Why are we here in this hearing today? Because 
we're looking at the permitting process. That's the scope of 
this legislation. How do we create more certainty in this 
uncertain process about permitting? Mr. Eisenberg, I believe 
you said that regulatory uncertainty, was it the number one 
issue?
    Mr. Eisenberg. Currently it is the most cited issue that 
our members would like to see Washington fix right now.
    Senator Daines. Number one issue of your manufacturers?
    Mr. Eisenberg. Yes.
    Senator Daines. So I guess with my engineering background I 
look at what problem are we trying to solve here today. I know 
we've been circling the globe on a lot of things in this 
hearing, but we're looking at regulatory uncertainty, the 
number one issue for manufacturers in jobs here in this 
country.
    Mr. Eisenberg. That's correct, and I would take it one step 
higher. We're talking about free trade also, right? I mean, 
this is the intersection of two sets of policies. This is 
energy policy, and this is trade policy.
    And to Senator King's last point, the reason the NAM came 
out the way we did on this and we are not for or against 
anything. We were founded 120 years ago, so the manufacturers 
could find markets to export to. We believe that you're either 
for free trade or you're not, and we are.
    Imposing some sort of delay or cap or something like that 
would stand in the way of exporting just about anything whether 
it's a Honda Civic or a Bic razor blade or energy, and that is 
why we've come out the way we have on this issue which is at 
the end of the day on balance free trade wins.
    Senator Daines. Well, I think we will have further debates 
about the merits of increasing exports in natural gas or not, 
but this legislation is about creating a regulatory certainty 
in an uncertain environment. I think we want to keep the 
conversation focused there because that's what we're going to 
be voting on, on uncertainty and the regulatory process.
    Mr. Eisenberg, could you expand, perhaps, on the resources 
that are spent on the exporting permitting process including 
NEPA and how important certainty is for both energy security 
and the American taxpayer?
    Mr. Eisenberg. So this is, obviously, not an inexpensive 
process. No manufacturer would take on this without knowing 
it's going to cost you quite a bit both in terms of the upfront 
costs to actually do the environmental studies and all of the 
research and all the background, but also the cost of delay, 
right? I mean, at the end of the day time is money and the 
longer it takes--the more you are spending to not do this.
    So obviously as you said, permitting certainty is what 
we're looking for. We're just looking to make sure that the 
rules of the road are there. That if we comply with them, we 
get an up or down answer so that we can control those costs and 
we can expect those costs and we know, going in, that there is 
an end of the road to this problem.
    Senator Daines. Alright. And Mr. Chairman, I too was taught 
in the House you don't run red lights, so I guess my time is 
up.
    Senator Barrasso. Well, I appreciate that, Senator Daines, 
because in terms of certainty I am certain that the voting has 
started on the Floor of the Senate. And I am certain it is on 
the Daines amendment. It's being voted on right now, and I'm 
certain that there are certain people on this panel that don't 
want to miss that vote.
    Thank you very much. I appreciate all of the witnesses for 
being here today. This hearing is adjourned.
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    [Whereupon, at 11:31 a.m. the hearing was adjourned.]
    
                      APPENDIX MATERIAL SUBMITTED

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