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2014-06-26 17:30:00

US GAS PUSHING EUROPE

US GAS PUSHING EUROPE

Eastern European governments have praised US lawmakers for advancing efforts to expedite American natural gas exports, as action by Russia forces European gas users to look for alternative supplies.

The House of Representatives on Wednesday passed a bill that would give the US energy department no more than 30 days from the completion of an environmental review to decide whether to approve applications for liquefied natural gas export terminals.

A long-running debate on exporting LNG from the US's shale energy revolution has been fuelled by the Ukraine crisis, which has left the US's European allies anxious about their dependence on Russian gas.

The bill that passed the House was not as bold as some previous versions, which would have automatically approved all existing multi-billion dollar export terminals or all LNG exports to members of Nato. There are 25 pending export applications.

By watering down the bill, its Republican backers won more support from Democrats, who are wary of anything that could encourage more hydraulic fracturing or lead to higher natural gas prices in the US.

The Obama administration has not come out against the bill, but it is not clear whether Harry Reid, the Democratic majority leader in the Senate, will allow its Senate counterpart to be voted on.

The countries that have lobbied Congress to expedite LNG exports include the Czech Republic, Hungary, Poland, Slovakia and Lithuania.

A Czech diplomat in Washington said: "[The bill] is a good step in the right direction. We are happy we are moving closer to facilitating LNG exports, but the original bill was more ambitious."

The Hungarian embassy welcomed bipartisan support for the bill, which passed by 266 votes to 150. It said: "Expediting US LNG exports would create jobs in the US and send a clear message to Europe that America does everything in its power to promote [the] energy diversification of its allies."

But some industry groups that are big gas consumers – and politically influential – hit out at the bill. America's Energy Advantage, a trade group for manufacturers and other groups, said: "The bill prioritises America's overseas competitors at the expense of US consumers and manufacturers."

The Industrial Energy Consumers of America said the 30-day deadline did not give the energy department enough time to consider the domestic economic impacts of the pending export applications.

Cory Gardner, a Republican congressman from Colorado who is the legislation's chief sponsor, told the Financial Times: "This bill accomplishes something that doesn't happen enough around here. It grows American jobs, and adds to the energy security of our friends and allies around the world."

Even if the bill becomes law, US LNG will not arrive in Europe soon because the first planned terminal will not be completed until the end of 2015, and it could take several years to build newer terminals.

However, Mr Gardner said that by sending a signal about future US supplies it would help European gas buyers to negotiate better deals today.

"We've heard comments from many nations who believe that the passage of the bill will help alleviate pressures and provide alternatives to contract demands," he said.

ft.com

Tags: US, EUROPE, GAS