H.R. 4606 would require the Department of Energy (DOE) to approve any application to export or import less than 0.14 billion cubic feet (bcf) of natural gas per day to or from any country with which the United States does not have an applicable free trade agreement (FTA). CBO expects that expediting those applications would reduce the time to approve them by several months, which could affect both the number of applications and the volume of gas exported and imported.
Changes in the price of gas, in the level of production of gas on federal lands, or a combination of the two could change the payments associated with production on federal lands. (Those payments are recorded as decreases in direct spending.) CBO expects that any additional demand for gas exports under the bill would be met by a commensurate increase in supply, which would result in no significant change in the price of gas. In addition, CBO expects that any increase in the production of gas would probably occur in states that accounted for more than 80 percent of gas exports over the 2012-2016 period. Because those states, including Michigan, Texas, and New York, contain only small amounts of federal land (between 0.5 percent and 10 percent of the total land area in each state), CBO estimates that any increase in the production of gas on federal lands would be small.
Using information provided by DOE, CBO also estimates that expediting applications to import small quantities of gas would have negligible effects on the price and quantity of gas produced in the United States, primarily because the quantity of gas imported from non-FTA countries has been very small in recent years. Over the 2013-2017 period, imports from those countries average 0.27 bcf per day (about 0.3 percent of the amount of gas produced domestically over that period). In addition, CBO expects that any effects from increased imports would probably be offset by the effects of increased exports. In 2017, imports from non-FTA countries totaled less than one-seventh of the amount of exports to those countries, and CBO expects that the United States will continue to be a net exporter to non-FTA countries over the next 10 years.
Because enacting H.R. 4606 could affect direct spending, pay-as-you-go procedures apply. However, CBO estimates that any such effects would not be significant in any year. Enacting the bill would not affect revenues.
CBO estimates that enacting H.R. 4606 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
H.R. 4606 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
On April 12, 2018, CBO transmitted a cost estimate for S. 1981, the Small Scale LNG Access Act of 2017, as ordered reported by the Senate Committee on Energy and Natural Resources on March 8, 2018. The two bills contain similar provisions, and CBO’s estimates of their budgetary effects are the same.
