Mr. DeFAZIO. Mr. Chairman, this is an amendment that I think will help deliver on some of the promises being made here today. This would say that natural gas produced on Federal lands, on Federal lands only, would not be allowed to be exported from the United States.
Now, the principal argument we are hearing on the Republican side is that, by adopting their standard, which they say is the states' rights standards--I have already raised concerns about that on fracking--that it will encourage yet more development on Federal lands, increase our domestic energy supply, and free us from the OPEC cartel. Okay. But that won't work if we produce energy on Federal lands and then we export it to other countries like China or Japan or elsewhere.
The Energy Information Administration has done a study. They say there will be a tipping point in the export of liquefied natural gas where we will create a world market; we will be subject to the world price. That means that there would be a dramatic increase in gas prices here in the United States both for residential, factory use, and as an input for manufacturing fertilizer or other sorts of manufacturing.
So, suddenly, we would see an advantage which we have only very, very recently developed. We have manufacturing companies bringing production back to the U.S. because of our plentiful natural gas and saying it is to our advantage, our energy is cheaper here, our feed stocks are cheaper here. This is a tremendous advantage for us, and they are producing here and exporting finished goods.
If we begin to export in great volume the raw material, the feed stock, the natural gas through a liquefied process, then suddenly it will be we are in the international market. It means a dramatic run-up in natural gas prices. We lose our competitive advantage for domestic manufacturing, and we are back where we are with oil, despite the idea that if we produce more oil we will somehow become free of OPEC or other countries around the world.
The fact is that oil is traded as an international commodity, and no matter how much we produce here, it is going to be priced internationally at the highest price being paid in the international market. That is not so today for natural gas. But if we export enough of it and create enough capacity to export it, that will become the case.
So this would have no impact on gas produced on State lands, Indian lands, private lands. It just simply says that that approximately 15 percent of the natural gas being produced on Federal lands could not be exported, must be used domestically to keep prices down here at home to advantage manufacturers here at home.
Mr. Chairman, I reserve the balance of my time.
Mr. HASTINGS of Washington. I yield myself 2 1/2 minutes.
Mr. Chairman, a similar amendment like this has been offered multiple times in our committee markups and they have always failed on a bipartisan vote, and similar amendments like this have also failed on the floor. This is nothing more than an effort to make production on Federal lands more challenging and less valuable.
The vast majority of the natural gas that is produced in the United States stays in North America, but that that is exported, 98 percent goes to Canada and Mexico. We ought to keep those customers.
Additionally, since 2009, the U.S. has been the largest producer of natural gas in the world, which, I guess, goes to my friend from Oregon's argument. But energy is going to be globally decided in the marketplace. Many companies operating in United States are international companies with businesses all over the world. Undercutting the basic premise of the free market and restricting the use of the resource always has real economic consequences in the future.
Now, there is one other point about this amendment, too. The amendment makes it unclear what is considered natural gas. The question arises, are products derived from natural gas also only to be sold in the United States because they are made from natural gas? It is unclear the way the amendment is drafted. But if that were to be the case, Mr. Chairman, there would be vast spin-off industries that would be affected, namely, the plastic industries.
So I tend to be one that believes that the American consumer, in fact, consumers everywhere, are benefited if we have free trade in the world. That should apply to everything, including a big resource that we are becoming a leader in, and this amendment, I think, is contrary to that approach.
Mr. Chairman, with that, I reserve the balance of my time.
Mr. DeFAZIO. To the gentleman's point, it is absolutely clear. It says ``gas.'' It does not say products derived from gas, fertilizer, or manufactured plastic or anything else. It just says the gas must be sold here in the United States.
He admits and says that it will make it less valuable. That means he is looking at increasing the price of natural gas here to accommodate exports overseas to put us in a world market. Then we are, yet again, screwed, just like we [Page: H7293]
have been with oil for years. We are back to the point where we are competing in an international market. We lose international competitiveness. We lose more manufacturing.
This is pretty transparent here. I mean, the industry is pressuring, I am sure, on their side of the aisle, saying, Oh, my God, don't do that. Don't say that that 15 percent of the gas produced on Federal lands, belonging to the taxpayers of United States, has to be used here to help keep down our prices for our homes, for our manufacturing, to give us a competitive world advantage. Let's do it like all our other free trade, which is bankrupting the country and exported millions of manufacturing
jobs over the last few years.
He talked about it again. Globally decided free market. He used those words. If we go to a globally decided free market in the export of natural gas, we lose the advantage, and their basic premise that this will lower prices for Americans is stood on its head.
If you don't adopt this amendment, if you vote against it, you are voting to increase the price of natural gas, according to the Energy Information Administration, for all consumers and manufacturers and the downstream products from those in the United States of America. So, if you really want to lower the price to consumers, vote for this amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. FLORES. I thank the gentleman for accepting the amendment, and I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the gentleman from Texas (Mr. Flores).
The amendment was agreed to.
AMENDMENT NO. 3 OFFERED BY MR.
The Acting CHAIR. It is now in order to consider amendment No. 3 printed in part B of House Report 113-271.
Mr. TURNER. Mr. Chairman, the DeFazio amendment is ill-conceived. Creating jobs in the energy sector is creating American jobs, and this amendment would, in fact, inhibit our ability to reduce our trade deficit and also affects an issue of providing natural gas to our strategic allies.
As a result of increased natural gas production, the price of natural gas has fallen over the last few years, making it competitive in the global marketplace. This presents an opportunity to export U.S. natural gas.
Many of our allies rely heavily upon a single source or unstable regions for natural gas. For example, Russia has used its European market dominance to influence other countries, cutting off natural gas supplies over various disputes. Poland is so eager to wean itself off Russia for natural gas that it plans to buy LNG from Qatar at a price estimated to be 40 to 50 percent higher than the rate charged by Gazprom, Russia's state-owned monopoly, just to be able to have some independence.
Increasing natural gas exports would provide our allies with an alternative and reliable source of energy, helping to strengthen our economic and geopolitical partnerships.
It should be noted that the boom in natural gas production has already made an impact. Supplies previously destined for our shores but no longer needed as a result of increased production have been diverted elsewhere. This increase in global supply has helped several European countries successfully renegotiate their long-term contracts with Gazprom, Russia's state-owned monopoly.
Mr. Chair, in general, when it comes to trade, we often talk about barriers that other countries have to U.S. producers, ones that we must overcome in order to export. In this case, these are regulatory burdens we are placing upon ourselves that are preventing our ability to create jobs and preventing our ability to lower our overall trade deficits. Restraining U.S. natural gas exports would only hurt our abilities to bolster strategic partnerships and create jobs right here at home.
The DeFazio amendment does nothing to decrease the cost currently of natural gas. This is an important ability to create jobs and lower our trade deficit.