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May 07, 2015

King Introduces Bills to Preserve American Natural Gas Supply

WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine), a member of the Senate Energy and Natural Resources Committee, announced today that he has introduced two pieces of legislation that would protect Maine’s interests when it comes to the exportation of natural gas.

“Increased natural gas exports will likely lead to increased energy prices. That’s why sending more natural gas abroad right now isn’t in the best interest of the country or in the best interest of the people of Maine – especially when Maine and the rest of the Northeast continue to grapple with how to bring more natural gas into the region,” Senator King said. “My bills would ensure that the majority of domestically-produced natural gas stays in the country and that if any is exported through Maine, then the region gets something out of the deal.”

As a consequence of inadequate natural gas pipeline infrastructure, Maine has experienced volatile natural gas price fluctuations that have hurt consumers and businesses alike. Senator King has pressed to expand pipeline capacity in the state and region and has fought against increasing exports, particularly when more natural gas is needed in the Northeast. To that end, Senator King yesterday introduced the Domestic Energy Security Act, legislation that would cap the amount of natural gas exported from the United States to help preserve America’s advantage in the market and ensure that there is adequate supply available within the country. He also introduced the Regional Gas Consumer Protection Act, which would require The Federal Energy Regulatory Commission (FERC) to consider regional markets and provisions of benefit to regional consumers as part of its review of any proposal to export natural gas through Maine.

The Domestic Energy Security Protection Act

The rapid growth in domestic energy production, driven largely by abundant natural gas and new drilling methods, has unlocked new potential for American energy security and provided a much-needed economic boost by ensuring that American manufacturers, energy-intensive industries, and residential consumers have access to inexpensive energy resources.

However, the growth in domestic production has also led to calls for the U.S. to increase natural gas exports. While a limited expansion of natural gas exports could result in benefits for producers with only modest price increases, unrestrained exports pose an unnecessary risk to our economy and to our domestic energy security at a time when domestic consumption of natural gas is only expected to increase. As we look to reduce carbon emissions and transition to renewable sources of energy, natural gas will play an increasing role in managing reliability and costs in the electricity sector. 

The Domestic Energy Security Protection Act would effectively cap the export of liquefied natural gas at 8 billion cubic feet per day, roughly 10 percent of current and short-term projections of production, by prohibiting the Department of Energy from approving applications that surpass that threshold. The result would allow for natural gas to be exported while preserving America’s advantage in the market.

The Regional Gas Consumer Protection Act

Like many other parts of the country, the Northeast has invested heavily in natural gas as a source of electric generation and heating, but a lack of existing infrastructure has led to a major supply shortage on the coldest days of the year when competition for gas peaks between home heating and electric generation. As a result, the region has so far lagged behind the rest of the country in receiving the benefits of the shale gas revolution with natural gas prices far above the national average.

Meanwhile, some companies have expressed interest in reversing the flow of the Maritimes and Northeast Pipeline, which for the last fifteen years has brought offshore natural gas from Canada’s Sable Island fields into New England, to instead bring natural gas north from the Marcellus for export overseas.

The Regional Gas Consumer Protection Act would require that, if presented with such a proposal, FERC consider the interests of regional consumers as well as constraints in regional natural gas markets.

The legislation follows a Senate Energy and Natural Resources Committee hearing in which Senator King pressed Secretary of Energy Ernest Moniz to allow for some of that natural gas running through the pipeline to be retained within the region during times of peak demand before being exported. Senators King and Susan Collins also recently sent a letter to the Department of Energy urging the agency to conduct a full review of any such proposal.


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