New analysis by the consulting firm ICF International indicates significant potential economic benefits from the export of U.S. liquefied natural gas (LNG):
- An average of 213,000 new jobs supported by LNG exports from 2015 to 2035.
- An average of 24,000 new jobs in the manufacturing sector over the same period.
- More than $720 billion in cumulative economic growth over the same period.
- An additional 291,000 barrels per day in natural gas liquids – the critical feedstock for chemicals and other industrial sectors – by 2035.
Each point is salient in the ongoing discussion of U.S. policy governing LNG exports. The Energy Department currently is considering more than a dozen applications for licenses to build exporting facilities. Erik Milito, API group director for upstream and industry operations, discussed the ICF study and facts surround the LNG issue during a conference call with reporters:
“We have plenty of natural gas. … The bottom line is that the arguments for exports are even stronger than before. An energy revolution is underway in the United States. New technology and the use of that technology are showing we have vastly more energy potential than we thought we had even just a short time ago. The U.S. is awash in natural gas with huge additional productive capacity that could be ramped up in relatively short order to fully supply domestic and likely export markets well into the future.”
Opponents continue to argue for government limitations on LNG exports by claiming exports would stretch domestic natural gas supplies, making it more expensive here, and that proponents want “hasty” government action that bypasses the statutory review process as well as “massive” and “unchecked” exports.
We’ve discussed these before, and Milito emphasized three countering points with reporters:
- Most recent Energy Department data confirms U.S. natural gas supplies will be robust enough to meet domestic needs while also supplying strategic allies around the world. Milito: “The critics simply didn’t acknowledge what an energy juggernaut the shale gas revolution has become and that it is still growing.”
- The costs of exports will restrain the amount of natural gas that is sold outside this country. If U.S. natural gas prices rise above a certain level, he said, export markets will prove less attractive and less natural gas will be exported. Even more downward pressure on prices will come from foreign producers who will be competing for the same business as U.S. producers.
- The potential increase in natural gas prices will be limited and won’t make domestic manufacturers uncompetitive.
“The case for more exports is clearer than ever, and consistent with basic principles of economics. Trade is good. Exports are good. And if we allow natural gas producers to export natural gas when they find opportunities to do so, American workers and our nation’s economy will be better off.”
Energy Department officials should approve the licensing applications now before them. Unnecessary delay increases the likelihood U.S. projects will not win the race with global competitors to build the LNG export facilities that can be supported by global demand. The marketplace, not the government, should decide who those winners should be.