Federal elections held nationwide on November 4 ushered in Republican control of the U.S. Senate and expanded the Republican majority in the U.S. House of Representatives. The Republicans now hold majorities in both houses of Congress, but because their majorities will not overcome a veto by President Barack Obama, a Democrat, Republicans will not wield unlimited legislative power. Although Congress is likely to remain deadlocked on major issues, the election may signal significant shifts in priorities for liquefied natural gas (LNG) export policies in the 114th Congress.
Both the Senate and House committees with jurisdiction over LNG export policy will see a reshuffle of their membership. In particular, the Senate Energy and Natural Resources Committee will see a leadership change and, depending on the outcome of run-off in the Louisiana senate race, may see a significant change in membership. These issues, as well as analysis of select Senate races, are analyzed below.
Senate Shake-Up
The new Republican majority in the Senate is undoubtedly friendlier to LNG exports than the former majority. Legislation that expedites LNG export applications has already passed in the House on a bipartisan basis, and may move to the Senate floor subject to a filibuster threat from newly re-elected Sen. Ed Markey (see below). If such legislation could pass the Senate, the critical question would be whether the President would veto such legislation and if there are enough moderate Democrats in the Senate to override that veto.
Depending on the impending run-off in the Louisiana Senate election, which could unseat current Senate Energy and Natural Resources Committee chair Sen. Mary Landrieu, a longtime friend of the LNG industry, there could be a marked change in the leadership of the committee. Senator Lisa Murkowski is expected to take over as chair of the Committee and is likely to continue her strong advocacy for LNG exports. However, if Sen. Landrieu loses in the run-off election (see below), then Sen. Maria Cantwell of Washington would become the highest ranking Democrat on the Committee. Senator Cantwell is a strong proponent of renewable energy and less friendly toward fossil fuels in general. Given retirements and Democratic losses in the Senate, Republicans may add two new members to the Committee, and the Democrats may add one new member.
During the current “lame duck” session of Congress, Sen. Landrieu’s Energy and Natural Resources Committee scheduled consideration of Sen. John Hoeven’s (R-N.D.) bill to expedite the Department of Energy’s consideration of LNG export applications for November 13. However, prior to the mark-up Sen. Hoeven withdrew his bill from consideration, stating that he would work with Secretary of Energy Ernest Moniz to improve the legislation for consideration in the next Congress. According to Sen. Hoeven, Secretary Moniz wants to ensure that DOE has adequate time to perform its statutory obligations (including a NEPA required environmental review) before it is forced to act on a pending application for LNG exports.
Status Quo in U.S. House of Representatives
The Republicans in the House of Representatives increased their majority significantly. Most interestingly, several new members were elected from moderate districts, which could prompt Speaker John Boehner to bring more moderate legislation to the floor. Representative Fred Upton, Chairman of the House Energy & Commerce Committee, has been a strong supporter of LNG exports along with the Republicans on his committee and several Democrats. This Congress will be the Chairman’s last leading the Committee (and he is expected to retire at the end of the 114th Congress), and because LNG exports are a legacy issue, it is possible he will attempt to move more pro-LNG export legislation. Representative Frank Pallone of New Jersey was chosen to replace retiring Representative Henry Waxman of California as the Ranking Member of the Committee.
Due to changes in the Republican and Democratic caucuses, as many as six to eight Republicans may join the Committee, and two or three Democrats might join the Committee. But it is not likely that these new additions would alter the policy direction set by Chairman Upton.
U.S. Senate Races Affecting LNG Policy Development
Louisiana: Sen. Mary Landrieu (D) to face Rep. Bill Cassidy (R) in run-off election
Incumbent Sen. Mary Landrieu will face current U.S. Rep. Bill Cassidy in a run-off election scheduled for December 6, because neither candidate received a majority of the votes cast. The Senate’s inability to break a filibuster on a Keystone XL pipeline authorization bill on November 18 is viewed as hurting Sen. Landrieu’s re-election chances. Both Sen. Landrieu, current chair of the Senate Energy and Natural Resources Committee, and Rep. Cassidy have advocated for increased LNG exports from the United States, so there is no significant policy difference between the candidates. However, as noted above, Sen. Landrieu’s role as committee chair gave her broad influence to set the energy policy agenda in the U.S. Senate. If Rep. Cassidy defeats Sen. Landrieu in next month’s run-off election, then LNG export projects, particularly projects located in Louisiana, will lose a powerful advocate in the Senate. Nonetheless, Senate Republican leadership has indicated that if Republican Rep. Bill Cassidy beats Sen. Landrieu in the run-off election in December, he will sit on the Energy and Natural Resources Committee, although he will not have the same senior position from which to advocate for LNG exports that Sen. Landrieu did.
Colorado: Rep. Cory Gardner (R) defeats Sen. Mark Udall (D)
Representative Cory Gardner defeated incumbent Sen. Mark Udall by a vote of 49% to 45%. During the campaign, Rep. Gardner and Sen. Udall proposed competing legislation that would require the U.S. Department of Energy (DOE) to act on LNG export applications to nations without a free trade agreement requiring national treatment of natural gas by a date certain. Although neither bill became law, Rep. Gardner’s bill, H.R. 6, was passed by the U.S. House in June 2014. It remains to be seen whether LNG exports will remain a legislative priority once Rep. Gardner joins the U.S. Senate, and it is not clear whether another Member will assume Rep. Gardner’s leadership role on the issue of LNG exports in the House of Representatives.
Alaska: Dan Sullivan (R) defeats Sen. Mark Begich (D)
Dan Sullivan, the former Commissioner of the Department of Natural Resources in Alaska, defeated incumbent Sen. Mark Begich, in another close contest, which Sen. Begich did not concede until November 17. Both candidates support LNG exports. Sullivan has advocated in favor of expanded LNG exports from Alaska to commercialize natural gas reserves in the North Slope, and has supported the industry-led Alaska LNG project. Sen. Begich proposed legislation to support the Alaska LNG project and co-sponsored Sen. Udall’s LNG permitting bill. With Sen. Murkowski and Senator-elect Sullivan, the Alaska Senate Delegation remains united in its support for LNG exports.
Massachusetts: Sen. Ed Markey (D) defeats Brian Herr (R)
Incumbent Sen. Ed Markey defeated Republican Brian Herr by a vote of 62% to 38%. Senator Markey, a long-time opponent of LNG exports, has introduced legislation to remove DOE’s presumption in favor of LNG exports and has raised environmental concerns with increased natural gas production. Senator Markey, elected during a special election following John Kerry’s resignation to become U.S. Secretary of State, now has a full six-year term to pursue his legislative agenda.
