Appalachian Energy for National Security Act

II Calendar No. 177 116TH CONGRESS 1ST SESSION S. 1064 [Report No. 116–75] To require the Secretary of Energy to conduct a study on the national security implications of building ethane and other natural-gas-liquids- related petrochemical infrastructure in the United States, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 8, 2019 Mr. MANCHIN introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources AUGUST 16, 2019 Reported under authority of the order of the Senate of August 1, 2019, by Ms. MURKOWSKI, with an amendment [Insert the part printed in italic] A BILL To require the Secretary of Energy to conduct a study on the national security implications of building ethane and other natural-gas-liquids-related petrochemical infrastruc- ture in the United States, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1064 RS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Appalachian Energy 2 for National Security Act’’. 3 SEC. 2. FINDINGS. 4 Congress finds that— 5 (1) the Energy Information Administration 6 projects that— 7 (A) domestic natural gas production from 8 shale resources will more than double between 9 2017 and 2050; and 10 (B) continued development of the 11 Marcellus and Utica shale plays in the eastern 12 United States is the main driver of growth in 13 total domestic natural gas production across 14 most scenarios; 15 (2) the Department of Energy has found that— 16 (A) the shale resource endowment of the 17 Appalachian Basin is so bountiful that, if the 18 Appalachian Basin were an independent coun- 19 try, the Appalachian Basin would be the third 20 largest producer of natural gas in the world; 21 (B) with more than $300,000,000,000 of 22 net revenue, 900,000 workers, and 7,500 estab- 23 lishments, Appalachia and surrounding areas 24 account for nearly a third of United States ac- 25 tivities in 13 petrochemical industries; and 26 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1064 RS (C) the aggregate revenue growth from 1 commodity chemicals that can be derived from 2 ethane (commonly known as the ‘‘value chain’’) 3 is projected to be $716,000,000,000 between 4 2018 and 2040; 5 (3) geographical diversity and structural resil- 6 ience is critical, given that the Department of En- 7 ergy has found that— 8 (A) 95 percent of ethylene production ca- 9 pacity in the United States currently exists in 10 the States of Louisiana and Texas; 11 (B) this concentration of assets and oper- 12 ations may pose a strategic risk to the economy 13 of the United States as extreme weather events 14 impacting the production of petrochemicals (in- 15 cluding plastic resin) on the Gulf Coast can 16 limit the availability of feedstocks to manufac- 17 turers across the United States; and 18 (C) in August 2017, many Gulf Coast re- 19 fineries and petrochemical facilities shut down, 20 which affected 54 percent of United States 21 ethylene production and 36 percent of United 22 States ethylene consumption capacity; 23 (4) there are economic efficiencies and economic 24 security benefits to maintaining all elements of the 25 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1064 RS value chain for ethane and other natural gas liquids 1 in clusters in various geographical regions, provided 2 each cluster includes natural gas production, natural 3 gas processing plants, natural gas liquids fraction- 4 ation plants, natural gas liquids transportation in- 5 frastructure, natural gas liquids storage, and ethane 6 and other natural gas liquids petrochemical infra- 7 structure; 8 (5) there are economic efficiencies to building 9 ethane and other natural-gas-liquids-related petro- 10 chemical infrastructure, including storage and dis- 11 tribution systems, within the Appalachian region, be- 12 cause of the close proximity of the region to the in- 13 dustrial Midwest and manufacturers in the Eastern 14 United States that use petrochemicals, such as plas- 15 tic resins, as manufacturing inputs; and 16 (6) it is a priority of the United States to mini- 17 mize effects of volatility in any individual market by 18 maintaining— 19 (A) a robust domestic natural gas liquids 20 resource base; 21 (B) the requisite physical assets along the 22 value chain for ethane and other natural gas 23 liquids; and 24 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1064 RS (C) diversity in customers, both domesti- 1 cally and internationally. 2 SEC. 3. STUDY AND REPORTS ON BUILDING ETHANE AND 3 OTHER NATURAL-GAS-LIQUIDS-RELATED PE- 4 TROCHEMICAL INFRASTRUCTURE. 5 (a) STUDY.— 6 (1) IN GENERAL.—Not later than 1 year after 7 the date of enactment of this Act, the Secretary of 8 Energy (referred to in this section as the ‘‘Sec- 9 retary’’), in consultation with the Secretary of De- 10 fense, the Secretary of the Treasury, and the heads 11 of other relevant Federal departments and agencies 12 and stakeholders, shall conduct a study assessing the 13 potential national and economic security impacts of 14 building ethane and other natural-gas-liquids-related 15 petrochemical infrastructure in the geographical vi- 16 cinity of the Marcellus, Utica, and Rogersville shale 17 plays in the United States. 18 (2) CONTENTS.—The study conducted under 19 paragraph (1) shall include— 20 (A) the identification of potential benefits 21 of the proposed infrastructure to national and 22 economic security, including the identification 23 of potential risks to national and economic se- 24 curity of significant foreign ownership and con- 25 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1064 RS trol of United States domestic petrochemical re- 1 sources; and 2 (B) an examination of, with respect to the 3 proposed infrastructure— 4 (i) types of additional infrastructure 5 needed to fully optimize the potential na- 6 tional security benefits; 7 (ii) whether geopolitical diversity in 8 areas to which the ethane and other nat- 9 ural gas liquids will be exported from the 10 producing region would undermine or bol- 11 ster national security; 12 (iii) the necessity of evaluating the 13 public interest with respect to exports of 14 ethane, propane, butane, and other natural 15 gas liquids, to ensure the potential stra- 16 tegic national and economic security bene- 17 fits are preserved within the United States; 18 and 19 (iv) the potential benefits, with re- 20 spect to significant weather impacts, com- 21 pared to other regions, of locating the pro- 22 posed infrastructure in the geographical vi- 23 cinity of the Marcellus, Utica, and 24 Rogersville shale plays. 25 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1064 RS (b) REPORTS.— 1 (1) STATUS REPORTS.—Prior to completion of 2 the study under subsection (a), the Committees on 3 Energy and Natural Resources and Armed Services 4 of the Senate and the Committees on Energy and 5 Commerce and Armed Services of the House of Rep- 6 resentatives, from time to time, may request and re- 7 ceive from the Secretary status reports with respect 8 to the study, including any findings. 9 (2) SUBMISSION AND PUBLICATION OF RE- 10 PORT.—On completion of the study under subsection 11 (a), the Secretary shall— 12 (A) submit to the Committees on Energy 13 and Natural Resources and Armed Services of 14 the Senate and the Committees on Energy and 15 Commerce and Armed Services of the House of 16 Representatives a report describing the results 17 of the study; and 18 (B) publish the report on the website of 19 the Department of Energy. 20 VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS Calendar No. 177 116TH CONGRESS 1ST SESSION S. 1064 [Report No. 116–75] A BILL To require the Secretary of Energy to conduct a study on the national security implications of building ethane and other natural-gas-liquids-re- lated petrochemical infrastructure in the United States, and for other purposes. AUGUST 16, 2019 Reported with an amendment VerDate Sep 11 2014 20:51 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6651 Sfmt 6651 E:\BILLS\S1064.RS S1064 pamtmann on DSKBFK8HB2PROD with BILLS