Statements on Introduced Bills and Joint Resolutions
Floor Speech
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Mr. HOEVEN. We are here today to talk about energy--energy for our country but also energy for our allies. This is a discussion not just about energy, it is about jobs, good-paying jobs. It is also about economic growth. It is about generating tax revenues to help reduce the debt and the deficit without raising taxes. It is about national security--not only our national security but also working with our closest friend and ally, Canada, as well as our allies in Europe, the European Union, and working to help countries such as the Ukraine that very much need energy supply from sources other than Russia.
With the current events going on in the Ukraine, it is very clear that we need to play a long-term game, a long-term strategy--deploy a long-term strategy when it comes to helping our allies, not only in terms of our national security but working with our allies to make them stronger, their strength, their national security. The national security of allies also contributes to our strength and our security here at home. So that is what we are here to talk about. We are here to talk about the North Atlantic Energy Security Act, legislation we are introducing today--myself, Senator Barrasso, Senator McCain, and Senator Murkowski.
I am going to take a few minutes to talk about energy production, transportation, and export in terms of building our energy future in this country and working with our allies. Senator Barrasso is here, and he will be talking about the specific legislation. Senator McCain will join us as well to talk about the national security issues and implications.
I will start with the first chart.
Very simply, what we want to do is continue to produce more energy in our Nation, in the heartland of our Nation and throughout our country. We want to transport that increased production to market. That includes not only markets domestically but also markets where we can export it to our friends and allies in the European Union, to the Ukraine, and to Japan. That is the simple equation we are working on. Again, it is about energy. It is about jobs. It is about a growing economy. It is very much about national security.
That gas is produced throughout our country, more and more all the time. Right now we produce 30 trillion cubic feet of natural gas a year. We only use 26 trillion cubic feet of natural gas a year, so we are already producing more than we consume, and that number is growing.
What happens when you produce more than you consume and you do not have a market for that gas? In places such as North Dakota, we are flaring off that gas. Right now, just in my State alone, we flare $1.5 million a day of natural gas--$1.5 million a day. That is natural gas that we need to capture, that we need to get in gathering systems, that we need to transport to markets, and we need markets for that gas. This is just common sense.
How do we move gas from North Dakota to places such as Ukraine, where there is much need for a market? Well, we need both interstate and intrastate pipeline systems. On this chart, you can see that the purple is the interstate. That is how we move gas across State lines. But we also need intrastate gathering systems. A lot of oil wells produce natural gas as a byproduct; other wells are just gas wells. But you need gathering systems, the blue systems that go to all those wells so that gas can be gathered, put in the interstate system, and moved to markets--markets throughout the United States and markets overseas.
As I said a minute ago, we produce 30 trillion cubic feet a year, States such as North Dakota, Wyoming, and many others. That number is growing. We produce 30 trillion cubic feet a year, but we only consume 26 trillion, so we are flaring off that gas.
We need markets. As we work to build those gathering systems and those interstate pipelines, how do we get markets? Well, we move that product to overseas as liquefied natural gas, LNG. It is cooled and condensed, put on ships, and moved to other markets--the European Union, Ukraine, Japan--by ship. But we need the LNG facilities to do it. We do not have them. So that is a problem, right? Well, it is, except we have many companies that are not only ready and willing but anxious to build the facilities. Here are 16 right here, 16 applications.
Of the 26 applications that are pending, many of them have been pending for over a year waiting to get approval from the Department of Energy and from the FERC. So here we are flaring off natural gas, as I showed a minute ago--$1.5 million a day in my State--flaring it off because we produce more than we consume. We need markets. These applications are just sitting there and have been for more than a year.
If they get approved, what happens? Let's take an example. Here is one by a company everybody has heard of--Exxon. Exxon has an application. As you can see here, they have had an application in for over a year waiting to get approved at Sabine Pass, TX, which is right down in that gulf area. They are ready, willing, and able to spend $10 billion right now, today, to build that facility.
Where are they going to move the gas? They are going to move it to the United Kingdom so it can go right into the European system. We will touch on that European system and how it gets to places such as the Ukraine in a minute. But if they can get approval-- I have already talked to their CEO, Mr. Rex Tillerson. He indicates that within 36 to 40 months of approval, they can be moving gas into the European markets. Does that sound realistic? It certainly does. Obviously that is a very large company with the capabilities to do what they say they are willing and want to do.
Here is another example. Here is Cheniere. Same place--Sabine Pass. This is one that did get approved. This is one that did get approval. They intend to be delivering gas into the European market by the middle of next year--middle of next year. So this is not something that is going to take forever to happen.
We not only have the fact that we can start moving natural gas over here in a very reasonable amount of time, but think of the impact on the markets in Europe and the impact on Russia and gas prices when they know it is coming.
I am going to ask Senator McCain to step in here. I mentioned a minute ago that application I showed you that is pending from Exxon. They want to move that natural gas to market right here in the UK.
What this chart shows is the pipeline network throughout Europe that will enable them to move that product throughout Europe and even into Eastern Europe, including places such as Ukraine.
Right now where is all that gas coming from? Russia, Gazprom. All these pipelines are coming down from Russia and providing that gas to the European countries, to the European Union, and to the Ukraine. Of course, that makes them dependent on Russia and that enables Russia to engage in the kind of activity we have seen and we can't always be reacting short term. We need a long-term strategy to break that hold.
Here are some of the numbers. This shows not only Ukraine but look at the impact on other NATO countries, Lithuania, Estonia, Latvia, 100 percent of their gas coming from Russia. Think of the leverage that gives Russia in this situation.
The last chart is the North Atlantic Energy Security Act. Quite simply, we are going to cut the redtape that is holding up production and infrastructure, we are going to reduce flaring, and we are going to expedite LNG to our friends and allies, to countries such as the European Union, to Ukraine, to Japan. We reduce the redtape that is holding up production. We are producing 30 trillion cubic feet of natural gas, and we can produce a lot more, but we have to cut through the redtape. We also enhance and expand our ability to build the gathering systems that move that natural gas to market, and we allow export.
We have an expedited process so we can export that gas to the markets we need, to our friends, and to our allies. Again, this is about energy, but it is about creating jobs, it is about growing our economy, it is about the national security of our country and our allies, and it is about having a long-term strategy that works, not going from crisis to crisis.
With that, I turn to my colleague, the senior Senator from Arizona, to comment on some of the national security implications.
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Mr. HOEVEN. I thank the Senator from Arizona for his comments, his leadership, and for his willingness to work on this vitally important issue.
In terms of responding to his question: OK. What needs to happen--I wish to take a minute to give an overview of the legislation and then ask the Senator from Wyoming to comment in more detail.
As I said at the outset, and I actually have said several times, this is about more energy, it is about job creation, it is about growing the economy, and it is about national security.
It is also very much about environmental benefits. I showed you gas being flared off a well. This gas is just being flared.
Not only is that wasting a natural resource which we can capture and get value for, but when we capture that, we also create environmental benefits.
Nationally, we flare or vent, burn off, 212 billion cubic feet of gas a year--212 billion cubic feet of gas a year now being burned off.
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Mr. HOEVEN. Oh, boy. To convert it, it is billions, right, it is in the billions of dollars. I don't have the exact number, but it is a huge amount. It is $1.5 million a day in my State alone so the Senator can see we are talking billions of dollars. There are also tremendous environmental benefits as well.
But let's go to the legislation for a minute because I think this is responsive to the question asked by the Senator from Arizona about: OK. How do we make it happen?
The reality is we are producing the energy now, we can produce more, and this doesn't cost taxpayer money.
This creates revenues without raising taxes. This is going to create revenues to help address the debt and the deficit. This is enabling and empowering the private companies to make investments to create jobs, make investments to produce the energy.
Going back to this chart, Exxon wants to invest $10 billion today, creating thousands of jobs and a tremendous amount of revenue for the Federal Government to reduce the deficit and debt. It doesn't cost a penny. That is not what it is about. It is about streamlining the regulation, cutting the redtape. That means making sure we streamline and expedite the process to get wells approved. That is the first area of legislation that increases our production onshore. We can do it offshore as well. But we are talking about more production. As I say, we are already producing more than we consume.
Second, it is about building those gathering systems. It requires permits and approvals to build gathering systems, so we are not able to build those gathering systems. If you can't build a gathering system, what happens? You burn off the gas because you can't get it to market. So that process is being held up. Again, it is about cutting through the redtape, reducing the regulation and bureaucracy. It doesn't cost anything.
The final piece, the same thing--getting approval to export LNG. Right now there is one that has final approval from the DOE and FERC. There are 26 applications pending. One has final approval from the DOE--Department of Energy--and the FERC. Six have conditional approval and 26 are pending. It is as simple as getting the approvals and cutting through that redtape. This is not about spending taxpayer dollars; it is about generating revenues.
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Mr. HOEVEN. I would respond briefly to the Senator from Arizona and then turn to the Senator from Wyoming on that issue as well for more detail on the legislation. He has tremendous expertise in this area and has been working on it for a long time.
Clearly, it is a double win because not only are we no longer burning off or flaring that natural gas, but we are using natural gas, which is a very clean resource, for a whole range of energy uses, whether it is powering homes or many other uses. So it is a huge environmental win.
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Mr. HOEVEN. Madam President, I turn to the good Senator from Arizona for any final comments. Seeing that he doesn't have any, I thank him.
I also thank the good Senator from Wyoming and ask if there are any final comments he might have on the legislation. He has been an author of much of this legislation. I thank him for that tremendous work and for being part of this effort.
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