US Senate energy chair offers bill to bolster European-North American energy ties

Seeking to strengthen energy security partnerships between European and North American allies, US Senate Energy and Natural Resources Committee Chairman Joe Manchin is pushing legislation to bolster US Department of Energy authority and financing available for projects that could help ease reliance on Russian supplies.

The West Virginia Democrat has introduced legislation, dubbed the North American Transatlantic Resource Security Partnership Act of 2023 (S. 458), alongside Senator Lisa Murkowski, Republican-Alaska, with both senators emphasizing a need to protect energy supplies and critical minerals from dependence on adversaries.

"The United States is ready and able to be Europe's primary energy partner, and the additional authority this bill gives to the Secretary of Energy will help to make that partnership possible," Manchin said in a statement Feb. 22.

Murkowski added that "[f]rom our own domestic production and exports, to the assistance our international development organizations can provide, no nation can do more to advance this cause than the United States."

To support such efforts, the legislation would authorize $500 million for a new DOE and Department of Interior program intended to help allies and partner nations shift away from reliance on Russia for natural gas, oil, coal, critical minerals, nuclear fuel, isotopes and other technologies. The efforts could entail developing resources domestically, providing them to allies, offering loans or other financial assistance, or providing technical assistance.

Yet another $500 million would be authorized for the program if Energy Secretary can certify to Congress that the Nord Stream 2 natural gas pipeline is permanently discontinued, according to text of the bill, introduced Feb. 15.

Throughout the legislation, there is an emphasis on developing resources and production in the US. And amid debate over whether international development finance organizations should spurn fossil fuel investments, the legislation affirms support for natural gas infrastructure development.

The bill also takes aim at securing supply chains in collaboration with Mexico, Canada and private industrial partners. The secretaries of energy and interior would be tasked with creating a new program, authorized at $200 million, to assure reliability of supply chains for energy production, mining, mineral processing and manufacturing.

Development finance

In an effort to counterbalance financial support for projects potentially available from adversaries, the lawmakers seek to boost development finance from US entities. The bill would expand the direction given to the US International Development Finance Corporation to make clear the organization can support "any type of energy" including fossil fuels, renewables and nuclear energy, as well as critical minerals development.

Further, the US Export-Import Bank would set up a new strategic energy and minerals portfolio -- capped at $50 billion in aggregate amount of loan, guarantees and insurance. The portfolio would be focused on financing civilian nuclear infrastructure, natural gas infrastructure projects (including regasification projects) and critical minerals projects that may facilitate US exports.

The legislation further includes a sense of Congress that it is in the highest US interest to develop the resources domestically, while also backing enhanced cooperation between the US, Mexico and Canada to increase energy production, improve energy efficiency and ease regulations to support cross-border activities. DOE loans and guarantees could be available to support research, development and commercialization, and a new US-Mexico-Canada Energy Center would also seek to foster collaboration.

David Goldwyn, president of Goldwyn Global Strategies, and a former State Department and DOE official, said the bill's support for civilian nuclear development and gas infrastructure needed to back up renewables could send a "constructive" signal for the energy transition process.

That said, Goldwyn noted there are hurdles to advancing legislation other than must-pass bills in the current Congress.

As for European gas infrastructure development, "what's really missing" to support facilities, Goldwyn said, is a long-term commitment from European governments or European utilities to access the gas resources to replace Russian gas.