November 20, 2014
Practice Groups:
Public Policy and
Law;
Oil & Gas;
Liquefied Natural
Gas;
Global Government
Solutions
2014 Midterm Elections: Implications for U.S. LNG
Exports
By: James A. Sartucci, David L. Wochner, Sandra E. Safro, Michael L. O’Neill and Grant W.
Carlisle
Federal elections held nationwide on November 4 ushered in Republican control of the U.S.
Senate and expanded the Republican majority in the U.S. House of Representatives. The
Republicans now hold majorities in both houses of Congress, but because their majorities
will not overcome a veto by President Barack Obama, a Democrat, Republicans will not
wield unlimited legislative power. Although Congress is likely to remain deadlocked on major
issues, the election may signal significant shifts in priorities for liquefied natural gas (LNG)
export policies in the 114th Congress.
Both the Senate and House committees with jurisdiction over LNG export policy will see a
reshuffle of their membership. In particular, the Senate Energy and Natural Resources
Committee will see a leadership change and, depending on the outcome of run-off in the
Louisiana senate race, may see a significant change in membership. These issues, as well
as analysis of select Senate races, are analyzed below.
Senate Shake-Up
The new Republican majority in the Senate is undoubtedly friendlier to LNG exports than the
former majority. Legislation that expedites LNG export applications has already passed in the
House on a bipartisan basis, and may move to the Senate floor subject to a filibuster threat
from newly re-elected Sen. Ed Markey (see below). If such legislation could pass the
Senate, the critical question would be whether the President would veto such legislation and
if there are enough moderate Democrats in the Senate to override that veto.
Depending on the impending run-off in the Louisiana Senate election, which could unseat
current Senate Energy and Natural Resources Committee chair Sen. Mary Landrieu, a
longtime friend of the LNG industry, there could be a marked change in the leadership of the
committee. Senator Lisa Murkowski is expected to take over as chair of the Committee and
is likely to continue her strong advocacy for LNG exports. However, if Sen. Landrieu loses in
the run-off election (see below), then Sen. Maria Cantwell of Washington would become the
highest ranking Democrat on the Committee. Senator Cantwell is a strong proponent of
renewable energy and less friendly toward fossil fuels in general. Given retirements and
Democratic losses in the Senate, Republicans may add two new members to the Committee,
and the Democrats may add one new member.
During the current “lame duck” session of Congress, Sen. Landrieu’s Energy and Natural
Resources Committee scheduled consideration of Sen. John Hoeven’s (R-N.D.) bill to
expedite the Department of Energy’s consideration of LNG export applications for November
13. However, prior to the mark-up Sen. Hoeven withdrew his bill from consideration, stating
that he would work with Secretary of Energy Ernest Moniz to improve the legislation for
consideration in the next Congress. According to Sen. Hoeven, Secretary Moniz wants to
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2014 Midterm Elections: Implications for U.S. LNG Exports
ensure that DOE has adequate time to perform its statutory obligations (including a NEPA
required environmental review) before it is forced to act on a pending application for LNG
exports.
Status Quo in U.S. House of Representatives
The Republicans in the House of Representatives increased their majority significantly. Most
interestingly, several new members were elected from moderate districts, which could
prompt Speaker John Boehner to bring more moderate legislation to the floor.
Representative Fred Upton, Chairman of the House Energy & Commerce Committee, has
been a strong supporter of LNG exports along with the Republicans on his committee and
several Democrats. This Congress will be the Chairman’s last leading the Committee (and
he is expected to retire at the end of the 114th Congress), and because LNG exports are a
legacy issue, it is possible he will attempt to move more pro-LNG export legislation.
Representative Frank Pallone of New Jersey was chosen to replace retiring Representative
Henry Waxman of California as the Ranking Member of the Committee.
Due to changes in the Republican and Democratic caucuses, as many as six to eight
Republicans may join the Committee, and two or three Democrats might join the Committee.
But it is not likely that these new additions would alter the policy direction set by Chairman
Upton.
U.S. Senate Races Affecting LNG Policy Development
Louisiana: Sen. Mary Landrieu (D) to face Rep. Bill Cassidy (R) in run-off election
Incumbent Sen. Mary Landrieu will face current U.S. Rep. Bill Cassidy in a run-off election
scheduled for December 6, because neither candidate received a majority of the votes cast.
The Senate’s inability to break a filibuster on a Keystone XL pipeline authorization bill on
November 18 is viewed as hurting Sen. Landrieu’s re-election chances. Both Sen. Landrieu,
current chair of the Senate Energy and Natural Resources Committee, and Rep. Cassidy
have advocated for increased LNG exports from the United States, so there is no significant
policy difference between the candidates. However, as noted above, Sen. Landrieu’s role as
committee chair gave her broad influence to set the energy policy agenda in the U.S.
Senate. If Rep. Cassidy defeats Sen. Landrieu in next month’s run-off election, then LNG
export projects, particularly projects located in Louisiana, will lose a powerful advocate in the
Senate. Nonetheless, Senate Republican leadership has indicated that if Republican Rep.
Bill Cassidy beats Sen. Landrieu in the run-off election in December, he will sit on the Energy
and Natural Resources Committee, although he will not have the same senior position from
which to advocate for LNG exports that Sen. Landrieu did.
Colorado: Rep. Cory Gardner (R) defeats Sen. Mark Udall (D)
Representative Cory Gardner defeated incumbent Sen. Mark Udall by a vote of 49% to 45%.
During the campaign, Rep. Gardner and Sen. Udall proposed competing legislation that
would require the U.S. Department of Energy (DOE) to act on LNG export applications to
nations without a free trade agreement requiring national treatment of natural gas by a date
certain. Although neither bill became law, Rep. Gardner’s bill, H.R. 6, was passed by the
U.S. House in June 2014. It remains to be seen whether LNG exports will remain a
legislative priority once Rep. Gardner joins the U.S. Senate, and it is not clear whether
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2014 Midterm Elections: Implications for U.S. LNG Exports
another Member will assume Rep. Gardner’s leadership role on the issue of LNG exports in
the House of Representatives.
Alaska: Dan Sullivan (R) defeats Sen. Mark Begich (D)
Dan Sullivan, the former Commissioner of the Department of Natural Resources in Alaska,
defeated incumbent Sen. Mark Begich, in another close contest, which Sen. Begich did not
concede until November 17. Both candidates support LNG exports. Sullivan has advocated
in favor of expanded LNG exports from Alaska to commercialize natural gas reserves in the
North Slope, and has supported the industry-led Alaska LNG project. Sen. Begich proposed
legislation to support the Alaska LNG project and co-sponsored Sen. Udall’s LNG permitting
bill. With Sen. Murkowski and Senator-elect Sullivan, the Alaska Senate Delegation remains
united in its support for LNG exports.
Massachusetts: Sen. Ed Markey (D) defeats Brian Herr (R)
Incumbent Sen. Ed Markey defeated Republican Brian Herr by a vote of 62% to 38%.
Senator Markey, a long-time opponent of LNG exports, has introduced legislation to remove
DOE’s presumption in favor of LNG exports and has raised environmental concerns with
increased natural gas production. Senator Markey, elected during a special election
following John Kerry’s resignation to become U.S. Secretary of State, now has a full six-year
term to pursue his legislative agenda.
Authors:
James A. Sartucci
Government Affairs Counselor
jim.sartucci@klgates.com
+1.202.778.9374
David L. Wochner
Partner
david.wochner@klgates.com
+1.202.778.9014
Sandra E. Safro
Associate
sandra.safro@klgates.com
+1.202.778.9178
Michael L. O'Neill
Associate
mike.oneill@klgates.com
+1.202.778.9037
Grant W. Carlisle
Government Affairs Specialist
grant.carlisle@klgates.com
+1.202.778.9349
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2014 Midterm Elections: Implications for U.S. LNG Exports
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