Natural gas export between U.S and India on the brink of a new dawn

Natural gas is soon emerging as a highly preferred fuel due to its high efficiency and cost effectiveness. Over the past year, the surplus production of liquid natural gas (LNG) in the U.S. has given impetus to the prospect of LNG exports to strategic allies. The United States and India are two of the world’s top five energy consumers. To date, policy debates have focused on finding sustainable ways to satisfy the ever-expanding demand for energy by advanced economies and big emerging markets such as India and China. Now, as the global energy landscape shifts, and as the Indian economy continues to grow rapidly, increasing U.S. energy exports to the region is becoming a win-win proposition. Taking this into consideration, a bill H.R 2471, the “Expedite Our Economy Act of 2013”, has been introduced by Congressman Ted Poe, Chairman of the Subcommittee on Terrorism, Non-proliferation and Trade to amend the existing Department of Energy Organization Act. The bill aims to completely transfer regulatory authority over exports of natural gas from the Department of Energy (DOE) to the Federal Energy Regulatory Commission.
The bill proposes to make it easier for companies to export U.S. surplus of natural gas, creating new jobs, boosting the economy, and strengthening international trade relationships. For countries like India that do not have a Free Trade Area( FTA) with the U.S., the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports will not be consistent with public interest. This bill will remove Department of Energy from the LNG export permitting process. Congressman Ted Poe has urged lawmakers to cosponsor H.R. 2471, The heart of the matter is that the U.S. move to free LNG exports to the non-FTA countries is not an “India-centric” move. Let us say, India could be a “stakeholder.” The decision takes into account a variety of factors, which include the persisting demands of competing countries such as China and Japan whose companies have been aggressively participating in shale gas activities in the U.S. through stake purchases and forming joint ventures.
But the decision paves the way for India, which does not have a FTA with the US, to get its companies to seek similar licenses for import of much needed gas from the United States. The existing federal law generally requires approval of natural gas exports to countries that have an FTA with the United States.
It is time to remove bureaucratic roadblocks and take the Department of Energy out of the approval process for natural gas exports,” said Congressman Poe. “Unnecessary federal red tape is the only thing standing in the way of the United States exporting natural gas. Exporting natural gas would grow our economy and create thousands of new jobs. Washington should be supporting, not stonewalling, the development and exportation of this valuable resource. ”
Dominion Resources Inc. has announced deals with Indian and Japanese companies to export liquefied natural gas from a proposed export plant in Maryland as it hopes it will obtain permission from U.S. authorities to export LNG to these customers by 2017. Affiliates of India’s state-controlled natural-gas processing and distributing company Gail Ltd have signed 20-year agreements to buy half of the proposed plant capacity.

The United States India Political Action Committee (USINPAC) has been constantly working for the past several months with the lawmakers at the Capitol Hill to expedite the export of natural gas between U.S and India. It has been closely working with the Subcommittee on Terrorism, Non-proliferation and Trade that held the recent Congressional Hearing on the LNG export issue in April 2013.

If the bill proposed by Congressman Poe is passed in both the House and the Senate, the India and the U.S. will be able to significantly strengthen their economic and political relations and herald an era of energy security for India.


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