The evidence is in. Liquefied natural gas (LNG) exports support jobs and economic growth. A new look at the impacts of LNG exports by ICF International projects that increased export volumes of up to 16 billion cubic feet per day (bcf/d) in 2040 could:
- Support between 220,000 and 452,000 additional U.S. jobs, and
- Add between $50 billion and $73 billion to the U.S. economy by 2040
And the increase in jobs and economic growth can be achieved with minimal domestic price impacts, which are about half of what was estimated four years ago. This is because the size of America’s natural gas resource that we are able to access is even bigger than ICF previously estimated, and technological advances are the reason. Technology advances in natural gas development in recent years allow for more precision in the location of natural gas and more efficiency in the production and extraction of those supplies, increasing our ability to access more of the resource base. And while our supplies have increased our costs have decreased, dropping and stabilizing natural gas prices and creating the perfect environment to export natural gas, while encouraging a low priced plentiful supply here at home. The U.S. is producing more natural gas at a lower cost than ever before and this has broad benefits for consumers, manufacturing users, the economy and the environment.
This new research is good news for the United States, which the International Energy Agency says could be the world’s leading LNG exporter by 2022. In addition to domestic economic growth, increased LNG exports will strengthen America’s global position, allowing the U.S. to help friends and allies overseas. Natural gas use here in the U.S. has helped to reduce carbon dioxide emissions from electricity generation. U.S. carbon emissions associated with power generation are near 30-year lows, chiefly because of increased natural gas use. Our allies around the world can utilize the increased supply of natural gas in the global market place to replace dirtier generation sources with power plants that utilize cleaner burning natural gas.
And the demand is there. The potential global LNG market is also estimated to be significantly bigger than previously thought – 32 trillion cubic feet (tfc) by 2040, compared to 22 tcf estimated in 2013. The report says:
Current expectations for cheaper and more price-responsive natural gas mean that higher levels of U.S. LNG exports can be accommodated with much lower price increases (as measured as cents price increase per one bcf/d of incremental LNG exports) than what was expected in ICF’s 2013 Report. This suggests that the economic impacts from LNG exports will still likely be positive and substantial.
The United States has an opportunity to become an influential global energy leader – a leader that will be a reliable and transparent trading partner in energy for allies abroad. A robust natural gas export policy will enhance our energy leadership, and it also will help grow our economy, support our manufacturing sector, strengthen our national security interests and protect our environment.
About Todd Snitchler
Before joining API, Todd Snitchler’s career encompassed both the public and private sectors. He served as Ohio’s Public Utilities Commissioner and chaired the state’s Power Siting Board and was also at Vorys Advisors LLC, where he led the government affairs efforts in the energy and utilities sectors. He was twice elected to represent the 50th House District in Stark County.
This LNG exports article was written by Todd Snitchler, Group Director of Market Development at the American Petroleum Institute