Indo-Pacific Strategic Energy Initiative Act

II 118TH CONGRESS 1ST SESSION S. 1720 To provide support for energy infrastructure projects in the Indo-Pacific region, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 18, 2023 Mr. SULLIVAN (for himself and Mr. HAGERTY) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To provide support for energy infrastructure projects in the Indo-Pacific region, 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 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Indo-Pacific Strategic 4 Energy Initiative Act’’. 5 SEC. 2. FINDINGS. 6 Congress makes the following findings: 7 (1) The United States currently has an approxi- 8 mately 100-year supply of natural gas in proven re- 9 serves. 10 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1720 IS (2) The Department of Energy projects global 1 consumption of natural gas to increase through at 2 least 2050, driven primarily by demand growth in 3 Asia. 4 (3) United States natural gas production in- 5 creased by 91 percent from 2005 to 2021. At the 6 same time, United States energy-related carbon di- 7 oxide emissions decreased by 18 percent. 8 (4) The growth in domestic natural gas produc- 9 tion has resulted in a change from the United States 10 importing a net 566,000,000,000 cubic feet of 11 liquified natural gas in 2005, to exporting a net 12 3,539,000,000 cubic feet in 2021. During that pe- 13 riod, crude oil production in the United States more 14 than doubled. 15 (5) As a result of the revolution in oil and gas 16 production technologies, the United States petroleum 17 trade went from its peak net import volume of 18 12,549 barrels per day in 2005, to a net export of 19 62,000 barrels per day in 2021. At Brent crude 20 prices, in nominal dollars, this reflects a trade deficit 21 of about $250,000,000,000 in 2005, changing to a 22 surplus of about $1,600,000,000 in 2021. 23 (6) Demand for natural gas is rising in the 24 Indo-Pacific region, particularly as countries look to 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1720 IS make emissions reductions and transition from high- 1 er emissions fuel sources. 2 (7) According to the International Energy 3 Agency, ‘‘The number of countries and territories 4 with [liquefied natural gas] import terminals has 5 grown from nine in 2000, to 42 in 2020.’’. Further, 6 the International Energy Agency has found that 7 ‘‘transition[s] in Asian gas markets [are] even more 8 important in the wider context of global clean energy 9 transitions, where natural gas will be required to 10 make a more flexible contribution’’. 11 (8) Australia and the United States are both 12 important global energy exporters and thus have a 13 shared interest in supplying the growing energy de- 14 mand in the Indo-Pacific region. 15 (9) Japanese companies have long invested in 16 United States liquefied natural gas projects and the 17 Government of Japan has shifted from relying on 18 liquefied natural gas from the Middle East to lique- 19 fied natural gas from the United States. 20 (10) The People’s Republic of China currently 21 is one of the largest financiers of overseas energy- 22 and greenhouse gas-intensive projects and the ex- 23 panding number of infrastructure projects in the 24 Indo-Pacific region, carried out under the People’s 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1720 IS Republic of China’s Belt and Road Initiative, is 1 leading to higher emissions, coercive dependence, 2 and environmental degradation in the region. 3 (11) European Union demand for liquefied nat- 4 ural gas is expected to rise from about 72,000,000 5 tons per year in 2021, to more than 110,000,000 6 tons per year until at least 2030. 7 (12) United States-produced oil and natural gas 8 has one of the lowest lifecycle emissions profiles in 9 the world. A 2019 analysis by the Department of 10 Energy found that natural gas pipelined from the 11 Russian Federation to Europe’s electricity sector has 12 41 percent higher lifecycle greenhouse gas emissions 13 than United States liquefied natural gas shipped to 14 Europe. The World Bank estimates that the flaring 15 intensity of United States oil and gas production in 16 2021 was 69 percent lower than in the Russian Fed- 17 eration. 18 (13) Between 2009 and 2019, use of United 19 States natural gas as a feedstock for hydrogen pro- 20 duction increased from 143,004,000 cubic feet to 21 199,050,000 cubic feet, or a 39.2 percent increase. 22 According to the Department of Energy, 95 percent 23 of the hydrogen produced in the United States is 24 made by natural gas reforming in large central 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1720 IS plants. That is an important technology pathway for 1 near-term hydrogen production and reducing global 2 emissions. 3 SEC. 3. SENSE OF CONGRESS. 4 It is the sense of Congress that— 5 (1) the United States reaffirms its commitment 6 to quadrilateral cooperation with Japan, India, and 7 Australia (collectively, with the United States, 8 known as the ‘‘Quad’’), and that the United States 9 should continue to pursue strengthening cooperation 10 in the energy sector in light of the global threats 11 and challenges facing all 4 countries, including 12 through upstream investments in energy infrastruc- 13 ture and other investments across the natural gas 14 value chain to enhance energy security; 15 (2) the Association of Southeast Asian Nations 16 (commonly referred to as ‘‘ASEAN’’) and its 10 17 members (Brunei, Cambodia, Indonesia, Laos, Ma- 18 laysia, Myanmar, the Philippines, Singapore, Thai- 19 land, and Vietnam) have worked with the United 20 States toward stability, prosperity, and peace in 21 Southeast Asia, and ASEAN will continue to remain 22 a strong, reliable, and active economic and strategic 23 partner in the Indo-Pacific region; 24 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1720 IS (3) the United States and the Republic of 1 Korea enjoy a comprehensive alliance partnership, 2 founded on shared strategic interests and cemented 3 by a commitment to democratic values, which in- 4 cludes recognizing the important role of energy co- 5 operation through the United States-Republic of 6 Korea Energy Security Dialogue; 7 (4) the United States and Japan also enjoy a 8 comprehensive alliance partnership, which is founded 9 on shared strategic interests and cemented by a 10 commitment to democratic values, including recog- 11 nizing the important role of energy cooperation and 12 maintaining an enabling regulatory environment to 13 facilitate continued and increasing liquefied natural 14 gas supplies through the United States-Japan En- 15 ergy Security Dialogue; 16 (5) the United States has economic, national 17 security, and domestic interests in assisting allies 18 and partners in Indo-Pacific countries to reduce 19 greenhouse gas emissions and achieve energy secu- 20 rity through diversification of their energy sources 21 and supply routes; 22 (6) the Group of Seven (G7), which includes 23 both the United States and Japan, recognized the 24 important role of energy cooperation and that ‘‘in- 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1720 IS vestment in the gas sector can be appropriate to 1 help address potential market shortfalls’’ through 2 the G7 Climate, Energy and Environment Ministers’ 3 Communique´; and 4 (7) the United States should not create unnec- 5 essary domestic obstacles to exporting liquefied nat- 6 ural gas and impose restrictions on the international 7 financing of liquefied natural gas infrastructure 8 abroad. 9 SEC. 4. STATEMENT OF POLICY. 10 It is the policy of the United States— 11 (1) to advance United States foreign policy and 12 development goals by assisting allies and partners of 13 the United States in the Indo-Pacific region to de- 14 crease their dependence on energy resources from 15 countries that use energy dependence to coerce, in- 16 timidate, and influence other countries; 17 (2) to develop strategies to counter competition 18 from the Russian Federation and the People’s Re- 19 public of China to protect the energy and national 20 security of the United States and the energy and na- 21 tional security of allies and partners of the United 22 States in the Indo-Pacific region; 23 (3) to support free and open trade in clean en- 24 ergy products and promote the continued develop- 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1720 IS ment of lower-emissions energy fuels and tech- 1 nologies in the Indo-Pacific region; 2 (4) to improve free, fair, and reciprocal energy 3 trading relationships with allies and partners of the 4 United States in the Indo-Pacific region; 5 (5) to promote the energy security of allies and 6 partners of the United States in the Indo-Pacific re- 7 gion by encouraging the development of energy in- 8 frastructure and accessible, transparent, and com- 9 petitive energy markets that provide diversified 10 sources, types, and routes of energy; 11 (6) to encourage public and private sector in- 12 vestment in energy infrastructure projects in the 13 Indo-Pacific region; 14 (7) to engage and lead on international emis- 15 sions reductions through the export of United 16 States-produced fuels and emission-reduction tech- 17 nologies and provide access to modern and reliable 18 energy services that promote economic development; 19 (8) to help facilitate the export of United States 20 energy resources, technology, and expertise to global 21 markets in a way that benefits the energy security 22 of allies and partners of the United States in the 23 Indo-Pacific region; and 24 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1720 IS (9) to supply countries that rely on higher-emit- 1 ting fuel sources with abundant alternatives that 2 have lower lifecycle emissions profiles. 3 SEC. 5. ENERGY INFRASTRUCTURE PROJECT SUPPORT. 4 (a) IN GENERAL.—The Secretary, in consultation 5 with the Secretary of Energy, the heads of other relevant 6 United States agencies, and energy-importing allies and 7 partners of the United States, shall, as appropriate, 8 prioritize and expedite the efforts of the Department of 9 State, the Department of Energy, and such other agencies 10 in supporting the governments of like-minded Indo-Pacific 11 countries to increase their energy security and reduce en- 12 ergy emissions, including through— 13 (1) providing diplomatic and political support to 14 those governments, as necessary— 15 (A) to facilitate international negotiations 16 concerning cross-border infrastructure; 17 (B) to enhance the regulatory environment 18 with respect to energy projects in the Indo-Pa- 19 cific region; and 20 (C) to develop accessible, transparent, and 21 competitive energy markets supplied by diverse 22 sources, types, and routes of energy; and 23 (2) providing support— 24 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1720 IS (A) to improve energy markets in the Indo- 1 Pacific region, including early-stage project sup- 2 port and late-stage project support for the con- 3 struction or improvement of energy projects and 4 related infrastructure; 5 (B) to diversify the energy sources and 6 supply routes of Indo-Pacific countries to 7 strengthen energy security; 8 (C) to enhance energy market integration 9 across the region; and 10 (D) through— 11 (i) investments in infrastructure to 12 support the importation of liquefied nat- 13 ural gas and other clean energy products 14 by Indo-Pacific countries; 15 (ii) energy-related international tech- 16 nical assistance; 17 (iii) energy technology collaboration; 18 (iv) commercial engagement; and 19 (v) any other mode of energy infra- 20 structure support the Secretary considers 21 appropriate. 22 (b) PROJECT SELECTION.— 23 (1) IDENTIFICATION.—The Secretary, the Sec- 24 retary of Commerce, and the Secretary of Energy 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1720 IS shall identify energy infrastructure projects that 1 would be appropriate for United States assistance 2 under this section. 3 (2) ELIGIBILITY.—A project is eligible for 4 United States assistance under this section if the 5 project— 6 (A) has been identified by the Secretary, 7 the Secretary of Commerce, and the Secretary 8 of Energy as promoting energy security in the 9 Indo-Pacific region or the country in which the 10 project is located; 11 (B) promotes the use of liquefied natural 12 gas and other clean energy products and related 13 energy infrastructure; 14 (C) has the potential to use goods and 15 services produced in the United States or an 16 Indo-Pacific country during project implementa- 17 tion; and 18 (D) is located in an Indo-Pacific country. 19 (3) PREFERENCE.—In selecting projects for 20 United States assistance under this section, the Sec- 21 retary, the Secretary of Commerce, and the Sec- 22 retary of Energy shall give preference to projects 23 that are expected to enhance energy market integra- 24 tion; 25 VerDate Sep 11 2014 03:08 Jun 03, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1720.IS S1720 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1720 IS (4) EQUAL CONSIDERATION.—In carrying out 1 the requirements of this subsection, the Secretary, 2 the Secretary of Commerce, and the Secretary of 3 Energy shall give equal consideration to each type of 4 eligible project, without regard to the type of clean 5 energy product or related energy infrastructure in- 6 volved. 7 (c) PRIORITY REPORT REQUIRED.— 8 (1) IN GENERAL.—Not later than 180 days 9 after the date of the enactment of this Act, and an- 10 nually thereafte [Text truncated for display. 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