Posted October 3, 2017
Here’s what we’ve learned since a 2013 study projected job and economic gains from exporting U.S. liquefied natural gas: The jobs and economic growth are still positive and significant, the domestic price impacts are about half of what was estimated four years ago and we have more natural gas than we thought.
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
- Add between $50 billion and $73 billion to the U.S. economy by 2040
In export scenarios that average up to 24 bcf/d (assumes an LNG export terminal capacity level of up to 30 bcf/d), ICF finds that increased LNG exports would have minimal effect on natural gas prices – about half as much as the 2013 study projected. ICF’s chart:
A big reason is advances in efficiency and technology. We’re producing more natural gas at less cost, with broad benefits for consumers, manufacturing users, the economy and the environment. Marty Durbin, API executive vice president and chief strategy officer:
“This report confirms that increasing U.S. LNG exports would bring great benefits to American workers and consumers and the U.S. economy. Increasing the use of U.S. natural gas throughout the world means more production here at home, cleaner air and increased energy security for our nation and our allies. Today’s report is the latest to exemplify the benefits that come from this clean, affordable, abundant, and reliable energy resource.”
As for America’s natural gas base, it’s bigger than ICF previously estimated – about 3,700 trillion cubic feet (Tcf), compared to the 2013 estimate of 3,550 Tcf, even though more than 100 Tcf was produced/drawn from the resource base in the intervening four years. Again, technology. From the report:
Technology advances in natural gas development in recent year have been related to the drilling of longer horizontal laterals, expanding the number and effectiveness of stimulation stages, use of advanced proppants and fluids, and the customization of fracture treatments based upon real time microseismic and other monitoring.
The second point is that the potential global LNG market is estimated to be significantly bigger than it was – 32 Tcf by 2040, compared to 22 Tcf estimated in 2013. The report:
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 Bcfd 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.
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 while supplying the natural gas market here at home.
Implied in all of this is increased use of natural gas, in the U.S. and around the world, which could help 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. Durbin:
“The U.S. is the world’s leader in producing clean and abundant natural gas, and today’s study demonstrates that the U.S. can export additional supplies of U.S. natural gas without sacrificing our competitive advantage here at home.”
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.