[Congressional Record Volume 158, Number 160 (Wednesday, December 12, 2012)]
[Senate]
[Pages S7977-S7978]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR:
  S. 3671. A bill to provide certain assistance to North Atlantic 
Treaty Organization allies; to the Committee on Banking, Housing, and 
Urban Affairs.
  Mr. LUGAR. Mr. President, I rise to introduce the Liquefied Natural 
Gas, LNG, for NATO Act.
  The United States is in possession of vast resources that could 
directly contribute to the energy security of our closest NATO allies, 
who face over-reliance on Russian and Iranian gas sources. In 2009, the 
United States overtook Russia as the world's largest natural gas 
producer due to vast unconventional reserves. At current U.S. 
consumption rates, the United States possesses perhaps a century of gas 
supply. This development has caused U.S. natural gas prices to fall to 
nearly a half to a third of gas prices in other key European and Asian 
markets and has prompted numerous applications for export licenses of 
U.S. liquefied natural gas exports.
  Pursuant to Section 3 of the Natural Gas Act, gas exports are subject 
to approval by the Department of Energy's Office of Fossil Energy and 
the Federal Energy Regulatory Commission, which must certify that a 
particular export is in the U.S. public interest. For destination 
countries with which the United States has a free trade agreement, a 
presumption is created that the export is in the public interest, and 
the license is automatic. For non-free trade agreement nations, a study 
must be conducted to determine the public interest, entailing a notice 
and comment period. Several companies have submitted applications to 
retrofit U.S. LNG import terminals for regasification and export; to 
construct new LNG export terminals; and to export cryogenic natural gas 
to Latin America by rail and ship. After approving one application, the 
Obama administration deferred others until at least 2013, pending a 
study completed last week. This study found that under any scenario, 
LNG exports will be a net benefit for the U.S. economy. Moreover, 
continued development of unconventional gas suppliers is an important 
source of job creation in the United States.
  U.S. shale gas reserves are already transforming European natural gas 
markets since LNG previously destined for the United States has now 
been made available for Europe. The United States can do much more to 
both use LNG exports to benefit NATO allies facing energy insecurity in 
Europe and to promote economic growth in the United States.
  Turkey currently relies on Iran for 20 percent of its gas imports, 
which could come under increased pressure when the European Council's 
decision of October 15, 2012 to prohibit the ``purchase, import or 
transport of natural gas from Iran'' is implemented. Moreover, several 
allies and partners in Central and Southeastern Europe, Bulgaria, 
Croatia, Hungary, Greece, the Czech Republic, and Moldova, will see 
their long-term contracts with Gazprom expire in the coming years. For 
these countries, targeted U.S. LNG exports, along with infrastructure 
investment and other policy responses, could help alleviate energy 
insecurity. It is possible that several other NATO allies and partners 
may opt for U.S. natural gas imports, and even paying a reliability 
premium for them, if the opportunity existed.
  Meanwhile, European nations are ramping up capacity to import LNG. At 
present, Europe imports LNG primarily from Algeria, Egypt, Oman, and 
Qatar to meet about 26 percent of its gas needs, due in large part to a 
lack of LNG import terminals, which are mostly located in Western 
Europe, as well as underdeveloped onward interconnectors and storage 
capacity in Europe. However, numerous European countries, some with 
financing from the European Bank for Reconstruction and Development, 
EBRD, are considering construction of additional LNG import terminals, 
including Bulgaria, Croatia, Estonia, Lithuania, Latvia, Poland, 
Romania, Turkey, and Ukraine. In light of these dynamics, the United 
States is well-positioned to

[[Page S7978]]

become a strategic energy supplier of LNG to NATO allies in need of 
diversification.
  The LNG for NATO Act would not direct supply, which should remain 
exclusively the function of private industry. Instead, this legislation 
would affect Section 3 the Natural Gas Act to create a presumption that 
licenses to export U.S. natural gas to NATO allies is in the U.S. 
public interest, giving NATO allies the same preferential treatment 
enjoyed by our free trade partners. Specifically, swift passage of this 
act will make gas export licenses automatic for Turkey, which relies on 
Iran for 20 percent of its gas demand, and those NATO countries, whose 
long-term gas contracts with Russia's Gazprom expire in the coming 
years.
  Through market forces, NATO allies will be more secure and the 
Alliance will be stronger. While the U.S. Congress will no doubt 
continue to debate full liberalization of natural gas exports, the LNG 
for NATO Act follows other precedents for narrowly tailored exceptions 
to our export licensing regime.
  I am hopeful that the LNG for NATO Act can command bipartisan support 
and swift passage.
                                 ______