Key Issues for TTIP: A Conversation with Christopher Smith, Assistant Secretary for Fossil Energy
Two days after he was confirmed by the United States Senate as the Department of Energy’s Assistant Secretary for Fossil Energy, Christopher Smith discussed American natural gas production, export potential, and the natural gas export licensing process with ambassadors to the United States and senior embassy staff members who represent many of the countries which are interested in the ways that they may benefit from these exports. The German Marshall Fund of the United States and The Lugar Center hosted the program as part of their continuing Transatlantic Research and Debate Grant from the Delegation of the European Union to the United States (learn more about this project here). This important discussion touched on themes including the practical matters of the export licensing process and the role of natural gas exports in energy security and foreign policy in the United States and Europe.
Assistant Secretary Smith opened the discussion by noting the unique present circumstances in which the United States has become the world’s largest natural gas producer and fossil fuels are an important component of energy security considerations in Europe. AS Smith detailed some of the implications of the Natural Gas Act as it pertains to liquefied natural gas (LNG) exports and emphasized the importance of the public interest as a determining factor in whether LNG export applications are approved. Under the Natural Gas Act, export applications involving countries that have a free trade agreement (FTA) with the U.S. are approved promptly and without modification, while applications involving non-FTA countries are examined much more stringently to determine if they are in the public interest. Although federal law dictates this standard, it does not define it. AS Smith explained that this public interest determination is not measured with a specific formula, but rather it considers many factors such as prices, energy security, and the impact on the environment, consumers, and economic activity. Additionally, AS Smith highlighted that, once the Department of Energy’s Office of Fossil Energy approves an export permit, it does not control the final destination of exported gas. He noted that the Office of Fossil Energy strives for a deliberate and transparent application process that is not politicized and allows the market to dictate this final destination. To date, four export projects have been granted final authorizations.
At a time of unprecedented abundance of natural gas, LNG has become an important consideration not only in energy security at home but also in the context of energy and national security abroad. As the discussion turned to international considerations, AS Smith raised important considerations for nations to consider as they seek to attain long-term energy security, while representatives of some embassies pointed to their view that U.S. LNG is of fundamental importance in increasing security especially in the near term. The Transatlantic Trade and Investment Partnership (TTIP) free trade agreement being negotiated between the United States and the European Union could significantly impact the current export situation because free trade countries have preferential status when export applications are being considered.
The German Marshall Fund and The Lugar Center express their appreciation to Assistant Secretary Smith for addressing the complexities and controversy of this important domestic and international issue.
Improved drilling technologies have set in motion a natural gas revolution in the United States. In the matter of a few years, the country has gone from a projected net importer of natural gas to a growing exporter of these resources. The abundance of U.S. natural gas reserves and the high demand for these resources in international markets have brought forth a growing number of applications to export liquefied natural gas. The Department of Energy plays an important role in regulating these exports, particularly in instances where importing countries lack a free trade agreement with the United States.
This roundtable event will be an opportunity to intimately discuss U.S. natural gas production growth and export potential with Deputy Assistant Secretary for Fossil Energy Christopher Smith who has responsibility for overseeing the Department of Energy’s natural gas export licensing process. Participants will have the opportunity to learn about the process and discuss in detail the impact these resources may have on European energy security vulnerabilities and how fossil fuel exports may be addressed in the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations.
Christopher Smith is assistant secretary for fossil energy with responsibilities for office operations and managing the oversight of Fossil Energy's Research and Development program (encompassing coal, oil and natural gas) and the U.S. Petroleum Reserves. He was appointed to the Department of Energy in 2009 as deputy assistant secretary for Fossil Energy's Office of Oil and Natural Gas. Smith served as the designated federal official for the national commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. Prior to his appointment, Smith served in managerial and analytical positions of increasing responsibility in the private sector. Most recently he spent 11 years with two major international oil companies focused primarily on upstream business development and LNG trading, including three years negotiating production and transportation agreements in Bogotá, Colombia.
Neil Robert Brown is a fellow at the Lugar Diplomacy Institute of the German Marshall Fund of the United States. Brown is a principal at KKR, a leading global investment firm, where he is director of policy and research at the KKR Global Institute. Previously, Brown served on the senior staff of the U.S. Senate Foreign Relations Committee and of Senator Richard G. Lugar, and he was a senior advisor at Goldwyn Global Strategies. As the lead for international energy in the Senate, he spearheaded major laws and strategic initiatives in energy security, infrastructure, transparency, and U.S. State Department reorganization and helped expand counter proliferation efforts through the Nunn-Lugar Global Program. Brown graduated with a bachelor's from Harvard University and MSc and MPhil from Oxford University, which he attended as a Rhodes Scholar.
This project is funded in part by the European Union.