Posted May 21, 2013
Two new reports outline the importance of crafting the right policies to capitalize on America’s vast wealth in shale natural gas.
An American Chemistry Council (ACC) analysis points to rich capital investments and job gains to be realized in that sector because of abundant, affordable supplies of shale natural gas:
- $71.7 billion in chemical industry investments publicly announced through the end of March.
- 46,000 new chemical industry jobs by 2020.
- 264,000 jobs in supplier industries by 2020.
- 226,000 induced jobs in communities where chemical industry workers spend their wages.
- $20 billion in federal, state and local tax revenue.
ACC President and CEO Cal Dooley:
“The United States has become a magnet for chemical industry investment, a testament to the favorable environment created by America’s shale gas as well as a vote of confidence in a bright natural gas outlook for decades to come. What’s especially exciting is that half of the announced investments are from firms based outside the U.S., which means our country is poised to capture market share from the rest of the world.”
“Right now, the chemistry industry has the confidence needed to drive new U.S. investment. Policymakers can help ensure that confidence continues for decades to come.”
Then there’s this report from the Bipartisan Policy Center (BPC), finding that the U.S. has ample domestic supplies to meet future demand for natural gas without significant price increases, and that exports of liquefied natural gas (LNG) are unlikely to have much impact on domestic prices. BPC:
“Overall, the United States is projected to become a net exporter of natural gas between 2017 and 2021 in all of the modeled scenarios. As domestic production of natural gas exceeds domestic consumption, the United States is projected to export natural gas via pipeline and as LNG. However, contrary to the concerns recently expressed by some large users of natural gas, increased exports are likely to have only a modest impact on domestic gas prices.”
Let’s make an argument that the two reports have an important connection. First, the abundance of natural gas, thanks to hydraulic fracturing in shale and other tight-rock formations, is a game-changer for the United States – provided the right policy choices are made. These include access to new reserves and oversight policies that foster safe and responsible development without chilling investment – which is a concern about the Bureau of Land Management’s just-proposed fracking rule, that it could place additional regulatory layers on top of effective state regulation and delay efforts to develop federal areas.
Second, adopting a market-based approach to LNG exports is a key to keeping a robust domestic natural gas industry sector healthy. Allowing natural gas producers to supply the domestic market as well as buyers in friendly countries overseas is fundamental to sustaining strong exploration and development activity in this country. That’s the way to ensure a market demand-based dynamic will work for the domestic industry and the U.S. workers employed by it.
The ACC report shows how this dynamic is working in that sector. The BPC report underscores that there’s no good reason to limit the natural gas sector by arbitrarily limiting our country’s capacity to be a natural gas exporter.
Marty Durbin, president and CEO of America’s Natural Gas Alliance:
“… selling natural gas to our allies in the global market is a no-brainer. It will improve the U.S. trade balance, deliver billions of dollars in economic benefits and jobs here at home while helping the President achieve his goal of doubling exports. And because of significant international competition for the global LNG market it’s critical that the United States get in the game soon.”
Currently, the Energy Department is considering requests for LNG export licenses from 19 U.S. applicants, after approving one last week. It should approve the remaining requests as well.
This will require rejecting the kind of protectionist, build-a-wall-around-America approach proposed by Rep. Edward Markey and others, who claim restricting LNG exports is the best thing for America. The Markey approach ignores analysis in two other reports (here and here) that shows significant gains for our economy, consumers and workers would come from LNG exports.
Policymakers should reject an approach that limits America's natural gas exporting potential - a position that's simply overwhelmed by the projected benefits of LNG exports. API President and CEO Jack Gerard:
“Allowing the export of LNG would mean more jobs, growth in U.S. GDP, and less debt – key priorities of the American people. The government can demonstrate its commitment to addressing these priorities by promptly approving authorizations to export LNG."
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.