[House Report 118-18]
[From the U.S. Government Publishing Office]


118th Congress   }                                          {   Report
                          HOUSE OF REPRESENTATIVES
 1st Session     }                                          {   118-18

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



 
               UNLOCKING OUR DOMESTIC LNG POTENTIAL ACT 
                                OF 2023

                                _______
                                

 March 23, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mrs. Rodgers of Washington, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1130]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1130) to repeal restrictions on the export and 
import of natural gas, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Committee Action.................................................     4
Committee Votes..................................................     5
Oversight Findings and Recommendations...........................     8
New Budget Authority, Entitlement Authority, and Tax Expenditures     8
Congressional Budget Office Estimate.............................     8
Federal Mandates Statement.......................................     8
Statement of General Performance Goals and Objectives............     8
Duplication of Federal Programs..................................     8
Related Committee and Subcommittee Hearings......................     8
Committee Cost Estimate..........................................     9
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     9
Advisory Committee Statement.....................................     9
Applicability to Legislative Branch..............................     9
Section-by-Section Analysis of the Legislation...................    10
Changes in Existing Law Made by the Bill, as Reported............    10
Minority Views...................................................    11

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Unlocking our Domestic LNG Potential 
Act of 2023''.

SEC. 2. ADVANCING UNITED STATES GLOBAL LEADERSHIP.

  Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended--
          (1) by striking subsections (a) through (c);
          (2) by redesignating subsections (e) and (f) as subsections 
        (a) and (b), respectively;
          (3) by redesignating subsection (d) as subsection (c), and 
        moving such subsection after subsection (b), as so 
        redesignated;
          (4) in subsection (a), as so redesignated, by amending 
        paragraph (1) to read as follows: ``(1) The Federal Energy 
        Regulatory Commission (in this subsection referred to as the 
        `Commission') shall have the exclusive authority to approve or 
        deny an application for the siting, construction, expansion, or 
        operation of a facility to export natural gas from the United 
        States to a foreign country or import natural gas from a 
        foreign country, including an LNG terminal. In determining 
        whether to approve or deny an application under this paragraph, 
        the Commission shall deem the exportation or importation of 
        natural gas to be consistent with the public interest. Except 
        as specifically provided in this Act, nothing in this Act is 
        intended to affect otherwise applicable law related to any 
        Federal agency's authorities or responsibilities related to 
        facilities to import or export natural gas, including LNG 
        terminals.''; and
          (5) by adding at the end the following new subsection:
  ``(d)(1) Nothing in this Act limits the authority of the President 
under the Constitution, the International Emergency Economic Powers Act 
(50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 
et seq.), part B of title II of the Energy Policy and Conservation Act 
(42 U.S.C. 6271 et seq.), the Trading With the Enemy Act (50 U.S.C. 
4301 et seq.), or any other provision of law that imposes sanctions on 
a foreign person or foreign government (including any provision of law 
that prohibits or restricts United States persons from engaging in a 
transaction with a sanctioned person or government), including a 
country that is designated as a state sponsor of terrorism, to prohibit 
imports or exports.
  ``(2) In this subsection, the term `state sponsor of terrorism' means 
a country the government of which the Secretary of State determines has 
repeatedly provided support for international terrorism pursuant to--
          ``(A) section 1754(c)(1)(A) of the Export Control Reform Act 
        of 2018 (50 U.S.C. 4318(c)(1)(A));
          ``(B) section 620A of the Foreign Assistance Act of 1961 (22 
        U.S.C. 2371);
          ``(C) section 40 of the Arms Export Control Act (22 U.S.C. 
        2780); or
          ``(D) any other provision of law.''.

                          PURPOSE AND SUMMARY

    H.R. 1130, the ``Unlocking our Domestic LNG Potential Act 
of 2023,'' was introduced by Representative Johnson (R-OH) on 
February 21, 2023. The legislation would lift all restrictions 
on the import and export of natural gas, with limited 
exceptions to limit trade with a person or foreign country 
under sanction or listed as a state sponsor of terrorism.

                  BACKGROUND AND NEED FOR LEGISLATION

    The United States has emerged as the world's number one 
producer of oil and natural gas, and a leading exporter of 
liquified natural gas (LNG), contributing to enhanced energy 
security, economic growth, and diplomatic leverage.
    The Department of Energy (DOE) has studied the domestic 
benefits of LNG exports under multiple Presidential 
Administrations, beginning with President Obama, and has 
determined that as U.S. LNG exports increase, domestic 
production increases to meet global demand.\1\ DOE has also 
studied the environmental effects of natural gas production and 
LNG exports, finding that U.S. LNG production and exports are 
the cleanest in the world.\2\ According to these studies, LNG 
exports could add between $50-73 billion to the U.S. economy by 
2040, and between 220,000 and 453,000 American jobs by 2040. 
LNG exports can also create billions of dollars in revenues for 
federal, state, and local governments, and increase downstream 
industries like manufacturing.
---------------------------------------------------------------------------
    \1\See, Effect of Increased Levels of Liquefied Natural Gas on U.S. 
Energy Markets, conducted by the U.S. Energy Information Administration 
upon DOE's request (2014 EIA LNG Export Study); The Macroeconomic 
Impact of Increasing U.S. LNG Exports, conducted jointly by the Center 
for Energy Studies at Rice University's Baker Institute for Public 
Policy and Oxford Economics, on behalf of DOE (2015 LNG Export Study); 
an Macroeconomic Outcomes of Market Determined Levels of U.S. LNG 
Exports, conducted by NERA Economic Consulting on behalf of DOE (2018 
LNG Export Study).
    \2\See, Addendum to Environmental Review Documents Concerning 
Exports of Natural Gas From the United States, 79 FR 48132 (Aug. 15, 
2014); Life Cycle Greenhouse Gas Perspective on Exporting Liquefied 
Natural Gas from the United States, 79 FR 32260 (June 4, 2014); and, 
2019 Update to Life Cycle Greenhouse Gas Perspective on Exporting 
Liquefied Natural Gas from the United States, 84 FR 49278 (Sep. 19, 
2019).
---------------------------------------------------------------------------
    Expanded U.S. LNG exports also benefit U.S. energy security 
and national security by reducing the influence of Russia and 
OPEC in international markets. While U.S. LNG exports have 
allowed Europe to begin to diversify away from Russian natural 
gas, U.S. allies and trading partners continue to be threatened 
by Russian supply disruptions and unfair pricing. Russia's war 
on Ukraine has exposed the world's vulnerability to unstable 
energy suppliers, emphasizing the importance of stable, secure, 
and more affordable American natural gas supplies.
    Under current law, any person wishing to import or export 
U.S. natural gas must obtain multiple Federal and State 
permits, undergoing a regulatory review that can take many 
years and cost millions of dollars. Applicants must obtain 
authorization to import or export the commodity, natural gas, 
and must also obtain approval to construct and operate the LNG 
facility.
    The Committee has found that some aspects of the regulatory 
reviews are duplicative and unnecessary, which has contributed 
to delays and introduced regulatory uncertainty that has 
stifled economic growth and job development. For example, under 
current law, applicants must spend millions of dollars to 
complete an environmental and safety review of a proposed LNG 
export facility with the Federal Energy Regulatory Commission 
(FERC) before DOE will consider whether to grant authorization 
to export natural gas to Non-Free Trade Agreement countries, 
even though DOE has already determined that expanded LNG 
exports are broadly in the nation's public interest. The 
Natural Gas Act (NGA) does not require a separate public 
interest determination in the case of exports to countries 
where a Free Trade Agreement (FTA) is in effect; however, even 
while the statute requires DOE to issue authorization ``without 
modification or delay,'' DOE routinely waits months to issue 
FTA authorizations.
    The Committee has determined that natural gas should not be 
subject to burdensome and unnecessary trade restrictions, and 
that the regulatory framework for natural gas should be 
harmonized with that of petroleum products and crude oil. In 
2015, Congress recognized the need to adapt to changing crude 
oil market conditions and repealed all restriction on the 
export of crude oil on a bipartisan basis. Lifting the 
restrictions on the export of crude oil encouraged additional 
domestic energy production, created American jobs, and economic 
development, and allowed the U.S. to emerge as the leading oil 
producer in the world. In 2019, as a result of lifting the oil 
export ban, the U.S. became a net exporter of petroleum 
products for the first time since 1952, and the reliance of the 
U.S. on foreign imports of petroleum products has declined to 
historic lows.
    H.R. 1130 would remove restrictions on the import and 
export of natural gas, by eliminating the need for an applicant 
to apply to DOE for authorization to import or export the 
commodity. With H.R. 1130, FERC would maintain exclusive 
authority to approve or deny an application for the siting, 
construction, operation, or expansion of a facility to import 
or export natural gas. The Committee does not intend for H.R. 
1130 to affect the existing FERC procedures to review the 
facility or change any standards for environmental or safety 
review. However, H.R. 1130 directs FERC to deem the export or 
import of natural gas to be consistent with the public 
interest. The Committee intends for the scope of FERC's review 
to be limited to the facility itself, and not to extend 
upstream or downstream beyond those effects that are direct or 
reasonably foreseeable.
    The Committee finds that free trade, open markets, and 
competition have contributed to the rise of the U.S. as a 
global energy superpower. The Committee expects that lifting 
restrictions on the import and export of natural gas would 
contribute to net economic benefits, increased natural gas 
production, and improved energy security and national security 
for the American people.

                            COMMITTEE ACTION

    On February 7, 2023, the Subcommittees on Energy, Climate, 
and Grid Security and Environment, Manufacturing, and Critical 
Materials held a joint hearing entitled, ``Unleashing American 
Energy, Lowering Energy Costs, and Strengthening Supply 
Chains,'' on 17 pieces of legislation, including H.R. 1130. The 
Subcommittees received testimony from:
           The Honorable Mark Menezes, Former United 
        States Deputy Secretary of Energy, Department of 
        Energy;
           The Honorable Bernard McNamee, Former 
        Commissioner, Federal Energy Regulatory Commission;
           Jeffrey Eshelman, II, President and Chief 
        Executive Officer, Independent Petroleum Association of 
        America;
           Katie Sweeney, Executive Vice President and 
        Chief Operating Officer, National Mining Association;
           Raul Garcia, Legislative Director for 
        Healthy Communities, Earthjustice; and
           Tyson Slocum, Director of the Energy 
        Program, Public Citizen.
    On February 28, 2023, the Subcommittee on Energy, Climate, 
and Grid Security met in open markup session and forwarded H.R. 
1130, without amendment, to the full Committee by a record vote 
of 16 yeas and 9 nays. On March 9, 2023, the full Committee on 
Energy and Commerce met in open markup session and ordered H.R. 
1130, without amendment, favorably reported to the House by a 
record vote of 27 yeas and 21 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. The following reflects the record votes taken during 
the Committee consideration:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held hearings and made findings that 
are reflected in this report.

           NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND 
                            TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 1130 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, at the time this 
report was filed, the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not available.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to 
increase American energy production and restore energy 
leadership by removing restrictions on the import and export of 
U.S. LNG.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 1130 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

              RELATED COMMITTEE AND SUBCOMMITTEE HEARINGS

    Pursuant to clause 3(c)(6) of rule XIII,
    (1) the following hearings were used to develop or consider 
H.R. 1130:
    On January 31, 2023, the Committee on Energy and Commerce 
held an oversight hearing entitled, ``American Energy 
Expansion: Strengthening Economic, Environmental, and National 
Security.'' The Committee received testimony from:
           The Honorable Paul Dabbar, Former Under 
        Secretary of Energy, Department of Energy;
           Robert McNalley, President, Rapidan Energy 
        Group, LLC;
           Donna Jackson, Director of Membership 
        Development--National Center for Public Policy 
        Research, Project 21; and
           Ana Unruh Cohen, Former Majority Staff 
        Director, U.S. House Select Committee on the Climate 
        Crisis.
    On February 16, 2023, the Subcommittee on Energy, Climate, 
and Grid Security held a field hearing in Midland, Texas, 
entitled, ``American Energy Expansion: Improving Local 
Economies and Communities' Way of Life.'' The Committee 
received testimony from:
           The Honorable Lori Blong, Mayor of Midland, 
        Texas, and President of Octane Energy;
           Adrian Carrasco, Chairman Midland Hispanic 
        Chamber of Commerce, and President of Premier Energy 
        Services;
           Steven Pruett, President and CEO, Elevation 
        Resources, and Chairman of the Board for Independent 
        Petroleum Association of America; and
           Dr. Michael Zavada, Professor of Biology and 
        Geosciences, and Chair, Department of Geosciences at 
        The University of Texas--Permian Basin.
    (2) The following related hearing was held:
    On February 7, 2023, the Subcommittees on Energy, Climate, 
and Grid Security and Environment, Manufacturing, and Critical 
Materials held a joint hearing entitled, ``Unleashing American 
Energy, Lowering Energy Costs, and Strengthening Supply 
Chains,'' on 17 pieces of legislation, including H.R. 1130. The 
Subcommittees received testimony from:
           The Honorable Mark Menezes, Former United 
        States Deputy Secretary of Energy, Department of 
        Energy;
           The Honorable Bernard McNamee, Former 
        Commissioner, Federal Energy Regulatory Commission;
           Jeffrey Eshelman, II, President and Chief 
        Executive Officer, Independent Petroleum Association of 
        America;
           Katie Sweeney, Executive Vice President and 
        Chief Operating Officer, National Mining Association;
           Raul Garcia, Legislative Director for 
        Healthy Communities, Earthjustice; and
           Tyson Slocum, Director of the Energy 
        Program, Public Citizen.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974. At the time this report was 
filed, the estimate was not available.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 1130 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 provides the short title of ``Unlocking Our 
Domestic LNG Potential Act.''

Section 2. Advancing United States global leadership

    This section strikes the provisions within the Natural Gas 
Act that requires DOE to issue an authorization to export 
natural gas from the United States or import natural gas from a 
foreign country. This section clarifies that FERC shall have 
exclusive authority to approve or deny an application for the 
siting, construction, expansion, or operation of a facility to 
import or export natural gas. This section requires FERC, in 
determining whether to approve or deny an application for a 
facility, to deem the export or import of the commodity, 
natural gas, to be consistent with the public interest. This 
section also contains a savings clause that clarifies nothing 
in the Act limits authorities under other laws to impose 
sanctions or restrict trade to a country that is designated as 
a state sponsor of terror.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    With respect to the requirement of clause 3(e) of rule XIII 
of the Rules of the House of Representatives, changes in 
existing law made by the bill, as reported, this section was 
not made available to the Committee in time for the filing of 
this report.

                             MINORITY VIEWS

    H.R. 1130 would substantially weaken the Federal review and 
authorization process for natural gas exports. The bill removes 
the requirement under section 3(a) of the Natural Gas Act (NGA) 
that the Department of Energy (DOE) find that the export of 
natural gas is in the public interest before allowing an 
exporter to export gas from a facility to a country the United 
States lacks a free trade agreement with. The process under the 
bill would require the Federal Energy Regulatory Commission 
(FERC) to deem that any export or import of natural gas to be 
consistent with the public interest.
    On February 7, 2023, the Subcommittees on Energy, Climate, 
and Grid Security and Environment, Manufacturing, and Critical 
Materials held a joint legislative hearing entitled 
``Unleashing American Energy, Lowering Energy Costs, and 
Strengthening Supply Chains.'' At this hearing, the 
Subcommittees heard testimony from Mr. Tyson Slocum. In his 
written testimony, Mr. Slocum detailed how increased LNG 
exports have raised costs for American consumers, and that 
loosening the approval process for LNG exports would likely 
further increase costs Americans pay for heating and 
electricity. Mr. Slocum also testified that increased LNG 
exports would further tie American natural gas prices to 
international natural gas prices, exposing Americans to 
increased gas price volatility.\1\ A document entered into the 
hearing record underscored the point, detailing how a sudden 
decrease in U.S. LNG export capacity resulted in a plunge in 
natural gas prices.\2\
---------------------------------------------------------------------------
    \1\House Committee on Energy and Commerce, Testimony of Tyson 
Slocum, Director of the Energy Program, Public Citizen, Hearing on 
Unleashing American Energy, Lowering Energy Costs, and Strengthening 
Supply Chains, 118th Congress. (Feb. 7, 2023).
    \2\Natural Gas Plummets as Freeport Delays Facility Restart 
Following Explosion, CNBC (June 14, 2022) (https://www.cnbc.com/2022/
06/14/natural-gas-plummets-as-freeport-delays-facility-restart-
following-explosion.html).
---------------------------------------------------------------------------
    Furthermore, H.R. 1130 eradicates existing protections to 
make sure that American LNG is not being exported to rival 
nations against the public interest. According to the Energy 
Information Administration, 13 percent of U.S. LNG exports went 
to China in 2021--over 450 billion cubic feet.\3\ A Reuters 
article entered into the record during the Full Committee 
markup further underscored that point, reporting how within the 
last month, U.S. exporters continued to sign long-term supply 
and offtake agreements with Chinese LNG purchasers.\4\
---------------------------------------------------------------------------
    \3\U.S. Energy Information Administration, U.S. natural gas exports 
and re-exports by country (Feb. 28, 2023).
    \4\China Gas Holdings signs two 20-year LNG supply deals with 
Venture Global, Reuters (Feb. 24, 2023) (https://www.reuters.com/
business/energy/china-gas-holdings-signs-two-20-year-lng-supply-deals-
with-venture-global-2023-02-24/#::text=SINGAPORE%2C%20Feb%2024%20
(Reuters),and%20the%20U.S.%20since%202021).
---------------------------------------------------------------------------
    During both the Subcommittee and Full Committee markups, 
Democrats introduced amendments designed to address their 
concerns. At the Subcommittee markup, Ranking Member Frank 
Pallone (D-NJ) offered an amendment that would have prevented 
the changes made by the bill from taking effect until DOE 
certified that the changes made by the bill would not increase 
U.S. domestic natural gas prices. At the Full Committee markup, 
Ranking Member of the Subcommittee on Energy, Climate, and Grid 
Security, Rep. Diana DeGette (D-CO) offered an amendment that 
would have kept the requirement that DOE find exports are in 
the public interest for exports to China, Russia, Iran, North 
Korea, or any country under U.S. sanctions. Both amendments 
failed on a recorded vote.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.

                                        Frank Pallone, Jr.,
                  Ranking Member, Committee on Energy and Commerce.

                                  [all]