By Dow Jones Business News, March 22, 2013, 12:10:00 PM EDT
By Tennille Tracy
WASHINGTON--Sen. Ron Wyden (D. Ore.), one of the leading voices on energy policy in the U.S. Senate, is laying the
groundwork for a broad-based energy bill that could impose new restrictions on natural gas exports and create additional
oversight for hydraulic fracturing.
The bill represents the first serious attempt by Senate lawmakers this session to modernize U.S. energy laws following
a surge in natural gas production that has transformed the energy landscape.
Mr. Wyden, who became chair of the Energy and Natural Resources Committee earlier this year, is planning a series of
meetings in May to gather input from other senators, as well as state regulators, natural gas producers and
environmental groups, an aide for the senator said. A bill could surface shortly after that.
The goal is to find common ground on often-divisive energy issues, leading to legislation that can attract enough
support among committee members. "This is a collaborative process," the aide said.
The bill, which is in the early stages of being developed, will seek to address natural gas exports and hydraulic
fracturing, or fracking. It will also tackle infrastructure issues and could look at ways to promote natural gas
vehicles, people familiar with the issue said.
One of Mr. Wyden's most challenging tasks will be to find common ground on the issue of natural gas exports.
With nearly 20 companies seeking permission from the U.S. Energy Department to ship natural gas to countries lacking a
free-trade agreement with the U.S., the issue has divided lawmakers and pitted energy producers like Exxon Mobil against
manufacturers like Dow Chemical.
Mr. Wyden is one of the most vocal critics of exports. Like other skeptics, he's concerned swelling exports will lead
to higher gas prices at home, stripping away a key competitive advantage for manufacturers that use natural gas as a raw
Energy companies say the U.S. government should steer clear of any restrictions. The hefty cost of building an export
facility, which can top $7 billion, will inevitably weed out many applicants and serve as a natural control on export
levels, they say.
Mr. Wyden has called for finding a "sweet spot" on exports-- allowing enough shipments to incentivize energy companies
to continue producing natural gas but restrictive enough to keep a cap on domestic prices.
The top Republican on the committee, Sen. Lisa Murkowski (R., Alaska), is a strong supporter of domestic energy
production and would likely reject strict new controls on exports.
Mr. Wyden could propose a specific limit on exports--equal to 10% of daily production, for example--or create a new
legal definition for when exports should be blocked because they are no longer in the best interests of the U.S.
The boom in natural gas production has been swift and dramatic. Production increased 25% between 2007 and 2012,
according to the U.S. Energy Information Administration, due in large part to advances in drilling and production
With thousands of wells dotting the U.S. landscape, private citizens and environmental groups have started to voice
concern over the safety of hydraulic fracturing, a common practice whereby natural gas is unlocked from underground rock
formations using a high-pressured mix of water, sand and chemicals.
The fight over fracking often revolves around the question of whether state officials are capable of ensuring safety.
The natural gas bill could include additional forms of oversight by the federal government.
One possible proposal would allow states to develop their own standards and then require a federal agency such as the
Environmental Protection Agency to sign off on the states' plans. Another proposal is to strengthen the role of the
Interstate Oil and Gas Compact Commission, a group representing several states in their efforts to develop energy
The natural gas bill will serve as a key test for senators responsible for guiding U.S. energy policy. The Energy and
Natural Resources Committee has a reputation for bipartisanship but its members became gridlocked last session over a
separate issue relating to oil royalties and failed to pass any meaningful legislation in months.
If the panel can pass a substantive natural gas bill, with new leadership and new members, it will be in a good
position to tackle other thorny issues that have surfaced as a result of newfound energy supplies.
Write to Tennille Tracy at email@example.com
(END) Dow Jones Newswires
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