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US Senate passes wide-ranging energy policy bill by 85-12 vote

A broad bipartisan US energy policy bill cleared the Senate by an 85-12 vote Wednesday, winning backing from groups across the political spectrum.

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The legislation (S. 2012), which would mark the first time the Energy Policy Act has been reformed since 2007, contains provisions highly sought after by US LNG developers seeking more certainty that projects will not be held up by changing tides in Department of Energy reviews for exports to countries without free trade agreements.

Despite wide support for the bill that was a product of compromise, the legislation stalled for several months after coming to the Senate floor amid a partisan standoff on funding for Flint, Michigan, and objections to an offshore drilling amendment.

The vote of "85 to 12 is a pretty good signal of support for a product that came to the Senate floor as a result of a good process," said Senate Energy and Natural Resources Chairman Lisa Murkowski, Republican-Alaska. "I think the vote that you see reflected this morning is indicative again of the need to update and modernize our energy policies but also a recognition of a collaborative effort."

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She and ranking member Maria Cantwell, Democrat-Washington, championed the bill as providing badly needed updates to energy policies that had not been revamped since 2007 despite dramatic changes in the energy sector.

Cantwell, for instance, on the floor Tuesday highlighted $2 billion directed for development of the microgrid and incentives for development of energy storage, which she called a "game changer." The bill also calls for investments in cybersecurity to protect the grid and make it more resilient, she said.

The bill seeks to add predictability to decision-making on LNG exports by requiring DOE to approve or disapprove applications to export to non-free trade agreement countries within 45 days of the National Environmental Policy Act review at the US Federal Energy Regulatory Commission or the Maritime Administration.

Charlie Riedl, executive director of the Center for LNG, called the action as a "watershed moment" for the US LNG sector.

"Project developers should know that they have a rock-solid timeframe to work with, and that certainty is crucial for these large, complex, capital-intensive investments in the US economy. This legislation will help catalyze the fast-maturing domestic LNG industry," he said.

Dena Wiggins, president and CEO of the Natural Gas Supply Association, also applauded the Senate for "voting for a bipartisan energy bill that will help broaden our country's opportunities to meet worldwide demand for natural gas with our abundant domestic supplies."

The bill also aims to add accountability and transparency to the interstate pipeline permitting process. It would set the Federal Energy Regulatory Commission as the lead agency in permitting pipeline projects and set a goal of completing other agency authorizations within 90 days of FERC approvals. Steps to improve transparency include requiring FERC to publish an online "regulatory dashboard" to track information related to the permit review.

The Interstate Natural Gas Association of America has seen the pipeline permitting provisions as an incremental step.

"Both the House and Senate provisions on pipeline permitting matters are modest in nature, providing incremental transparency and accountability in the permitting and approval of natural gas pipelines. They are also largely similar. As such, reconciling the two bills on this issue should be a fairly straightforward process," the group said.

On other matters, the measure requires reviews on the effectiveness of capacity markets and steps to bolster electricity infrastructure and modernize the grid. Provisions on land and water conservation and mineral security are also included, along with a section geared toward repealing obsolete programs.

A substantial energy efficiency section takes up many pieces of a bill by Senators Rob Portman, Republican-Ohio, and Jeanne Shaheen, Democrat-New Hampshire, and as such won support from the Alliance to Save Energy.

The House in December also passed a broad package of energy policy changes that includes provisions to ease impediments to pipeline permitting and energy exports, but its prospects were clouded by a White House veto threat and loss of much its Democratic support as measures with less bipartisan support were added during committee and floor action.

Murkowski said she would support holding a formal conference with the House over the legislation and suggested the time and legislative calendar would be the key hurdles to getting something through this session of Congress. She expressed optimism that differences over issues could be worked out given sufficient time.

Industry backers of the bill were hopeful that prospects for it becoming law would be bolstered a strong, bipartisan vote in the Senate, followed by compromises in conference committee.

--Maya Weber, maya.weber@platts.com
--Edited by Jason Lindquist, jason.lindquist@platts.com