In a rapid turn of events, the bipartisan “Energy Policy Modernization Act” went from the legislative dustbin to an upcoming Senate floor vote. And not a moment too soon considering the unexpectedly rocky road the bill embarked on since it was first introduced.
In February, the Senate took up the bipartisan bill, introduced last summer by Senate Committee on Energy and Natural Resources Chairman Lisa Murkowski (R-Alaska) and Ranking Member Sen. Maria Cantwell (D-Wash.), that would modernize our nation’s energy policy for the first time since 2007.
Yet, the bill—on track to pass owing to strong support on both sides of the aisle—was derailed when a small group of senators objected because of an impasse over funding for the Flint, Michigan, water crisis and other separate policy initiatives. Votes on final amendments to the bill were postponed, and the package ultimately stalled, leaving our nation’s energy sector without the comprehensive policy reform it desperately needs.
But with the bill now likely moving forward this week as a result of Sens. Bill Nelson (D-Fla.), Debbie Stabenow (D-Mich.) and Mike Lee (R-Utah) lifting their respective holds, it’s time to revisit the important provisions contained in the legislation.
The bill first addresses issues within our nation’s aging electric grid and would improve energy efficiencies in buildings. It would also increase support for energy sector workers, hit hard by falling oil and coal prices, implementing a Department of Energy (DOE) workforce advisory board while also creating a four-year pilot grant program designed to incentivize job training programs through competitive grant awards.
Perhaps most notable, however, is the provision addressing U.S. exports of liquefied natural gas (LNG). Section 2201 of the bill requires that the DOE issue final decisions on LNG terminal applications within 45 days after review by the Maritime Administration or Federal Energy Regulatory Commission. This is a critical improvement because currently, the DOE has an open-ended timetable for completing reviews, resulting in terminal applications building up in the approval queue. In fact, several requests for new LNG terminals have been awaiting a decision from DOE for more than four years.
If we can free LNG exports from this bureaucratic red tape, significant economic and global benefits will follow.
According to a 2015 Economic Report released by President Obama’s Council of Economic Advisers, U.S. LNG exports could generate as many as 65,000 American jobs. The report also suggests we’d see additional capital investments by U.S. producers—ultimately bolstering national GDP—as a result of expanded domestic production. Separate analysis from DOE and Rice University came to an equally favorable conclusion, projecting that a larger LNG exports scenario could result in 35,200 new jobs and $20.5 billion in revenue annually.
Globally, LNG exports would provide a reliable source of energy to our allies around the world, particularly the European Union and Japan, who now depend upon politically unstable nations such as Russia for valuable energy resources. We can support these allies by helping them diversify their energy supplies, enhancing American national security in the process.
It’s not often that both parties in Washington can come together on such a significant issue, especially on a bill that is an important step in the right direction for our nation’s energy future. Let’s hope senators join together in passing this historic legislation and their counterparts in the House quickly follow suit.
William Shughart, research director the Independent Institute, is J. Fish Smith Professor in Public Choice at Utah State University’s Huntsman School of Business and a senior fellow of Strata, a policy research center in Logan, Utah.