State Impact | 1/5/17 Within the next decade, the U.S. could be exporting more energy than it imports, something that has not occurred since the early 1950′s. The Energy Information Administration projects that under a number of different scenarios, exports of natural gas will increase as petroleum liquid imports decrease, making the country an energy exporter by 2026. The U.S. typically imports crude oil, and exports products like diesel and gasoline. An export ban on crude oil was lifted in 2015, while new liquefied natural gas (LNG) export terminals began shipping gas overseas in 2016. Additional LNG terminals are planned // Read More
American Council for Capital Formation: Special Report: Setting the Record Straight on LNG Exports: Environmental Opposition Contradicts Studies on Natural Gas Realities
As support for lifting restrictions on liquefied natural gas (LNG) exports has gained momentum in Washington and across the country, opponents of exporting abundant U.S. shale gas have doubled down by distorting the facts about the benefits of the United States’ energy resources. This special report lays out a point-by-point rebuttal to address oft-repeated concerns related to the export of our natural gas, and to correct the record on the impacts on LNG exports on the environment.
American Council for Capital Formation:Liquefied Natural Gas: Why Rapid Approval of the Backlog of Export Applications is Important for U.S. Prosperity
July 2013 (Updated November 7, 2013)
This first-of-its-kind report provides a compilation of the status of LNG export applications, the current length of application review, the estimated economic benefits listed in each application, and total estimated capacity. Explains why the multi-year federal approval process is creating significant delays, and may derail overall U.S. investment as foreign competitors gain market share at U.S. expense.
American Council for Capital Formation: Special Report: LNG Exports: How Much Will They Impact U.S. Natural Gas Prices?
This Special Report highlights recent research from a variety of government organizations and economic consulting firms that analyze the effects of expanded LNG exports on U.S. natural gas prices.
American Council for Capital Formation: Special Report: How Federal Energy Policies Can Support U.S. Economic Recovery
Special report highlights the U.S. oil and gas industry impact on the U.S. economic recovery over the past several years and explains impact of tax policies on industry.
American Council for Capital Formation: Should Free Trade Principles Apply To U.S. Exports Of Liquefied Natural Gas?
The ACCF Center for Policy Research convened a panel of three experts on February 12, 2013, to discuss the question of how free trade principles should enter into policymakers’ decisions regarding the exportation of a commodity like liquefied natural gas (LNG).
Department of Energy Studies
Two recent Department of Energy Studies, “Effect of Increased Natural Gas Exports on Domestic Energy Markets” and “Macroeconomic Impacts of LNG Exports from the United States” provide insight on the effect of increased U.S. exports of liquefied natural gas (LNG) and the potential impact on domestic natural gas prices and the overall U.S. macroeconomy. The results of DOE’s macroeconomic study, which was prepared by NERA Economic Consulting, are in line with well-known facts regarding the merits of free trade: “Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased. In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports. In all of these cases, benefits that come from export expansion more than outweigh the losses from reduced capital and wage income to U.S. consumers, and hence LNG exports have net economic benefits in spite of higher domestic natural gas prices. This is exactly the outcome that economic theory describes when barriers to trade are removed.”
Small Business & Entrepreneurship Council: Benefits of Natural Gas Production and Exports for U.S. Small Businesses: Nationally and Key States
The newly updated report calculates the sizeable growth in the number of employer firms and jobs in the energy sector between 2005-2012. The findings underscore the need for policies that encourage and enable this positive development for the U.S. economy. It also examines the state-specific impacts of natural gas development in 19 states, 12 of which experiences natural gas production growth and an increase in jobs. They include Arkansas, Colorado Louisiana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia and Wyoming. (State-Specific Data)
NERA Economic Consulting: Updated Macroeconomic Impacts of LNG Exports from the United States
This report is an update to the study of the macroeconomic impacts of liquefied natural gas (LNG) exports that was issued by the US Department of Energy (DOE) in December 2012. The new study, “Updated Macroeconomic Impacts of LNG Exports from the United States,” updates all 63 LNG export scenarios modeled in the DOE study and adds several new scenarios. The new study, which was sponsored by Cheniere Energy, Inc., includes additional analysis of the cumulative impacts of LNG exports up to the maximum amounts that the market would allow under various domestic and international market scenarios.
House Energy and Commerce Majority Staff: Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports
The rapid growth in American natural gas production offers a variety of opportunities, including the chance for America to become a natural gas exporting nation. However, time is of the essence and DOE’s slow approval process for LNG exports is squandering the chance to maximize our energy advantage. To avert these risks to our global LNG export leadership potential, the committee urges DOE to approve all pending LNG export applications by the end of 2014. In addition, the committee will consider legislative reforms to streamline and expedite the approval process to better reflect America’s new energy abundance and the benefits of natural gas exports.
The white paper is the continuation of the conversation initiated by Senator Murkowski with the Energy 20/20: A Blueprint for America’s Energy Future and The Narrowing Window: America’s Opportunity to Join the Global Gas Trade. In the paper Senator Murkowski discusses how the architecture that governs U.S. energy exports is antiquated. She provides prescriptions to renovate our regulatory edifice, modernizing it for a 21st century in which the United States is a leader on energy, the environment, and trade.
National Association of Manufacturers (NAM): LNG and Coal: Unreasonable Delays in Approving Exports Likely To Violate International Treaty Obligations
The recent report by former WTO Appellate Body Chairman James Bacchus and commissioned by the National Association of Manufacturers (NAM) examines two central questions:
- Do unreasonable delays by the Department of Energy to issue licenses to export LNG to foreign countries constitute, in and of itself, a violation of our international obligations under the WTO?
- Do efforts by state and local authorities in the Pacific Northwest to broaden unduly the scope of the environmental review process for planned coal export terminals beyond the federal scope, and the resulting delay, constitute a violation of our international obligations under the WTO?
Bacchus concludes that unnecessary delays in the liquefied natural gas (LNG) and coal export permitting process may run afoul of U.S. international treaty obligations under World Trade Organization (WTO) agreements and ss a member of the WTO, the United States is bound to comply with trade rules contained in WTO agreements.
The state-by-state study details the significant U.S. job gains, manufacturing growth, and robust economic activity associated with future exports of liquefied natural gas (LNG) across the nation. The study states that exports could contribute as much as $10 to $31 billion per state to the economies of natural gas-producing states by 2035. However, non-natural-gas-producing states will also benefit, partly due to the boost in demand for steel, cement, equipment, and other goods. According to the report, states with a large manufacturing base, such as Ohio, California, New York, and Illinois, will see economic gains as high as $2.6 to $5.0 billion per state in 2035. In terms of employment, natural gas-producing states could see employment gains as high as 60,000 to 155,000 jobs in 2035. And large manufacturing states will see employment gains upwards of 30,000 to 38,000 jobs in 2035.
This study seeks to quantify how unconventional activity creates economic value in the broader economy through an examination of the exploration and production activity. Across America’s widening energy landscape, the economic impacts of unconventional oil and natural gas are increasingly discernible. These effects are visible within the energy value chain and are extending into the broader reaches of the US economy.
Congressional Research Service: U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes
CRS Report for Congress Prepared for Members and Committees of Congress on the topic of U.S. Natural Gas Exports.
Aspen Institute: Responding to Change: The New World of Oil and Gas
The 2013 Forum continued the recent focus on the impact of increased unconventional oil and gas production in North America. “Responding to Change: The New World of Oil and Gas” discussed production challenges and opportunities; the impact on midstream and downstream companies; the potential demand for gas in various sectors; the environmental costs of energy; and global economic and political issues resulting from the North American boom. Bill White, Chairman of Lazard Houston and former Houston Mayor and U.S. Energy Secretary, chaired the Forum.
In this natural gas briefing document, the second in a series of briefings by the Energy Security Initiative at Brookings (ESI) on developments in the natural gas market, the authors lament the vagaries of the Department of Energy’s approach to liquefied natural gas (LNG) export application approvals and recommend ways to improve the process.
Boston Consulting Group: Behind the American Export Surge
This new study by Boston Consulting Group concludes that the United States is becoming one of the developed world’s lowest-cost manufacturers. There are three main drivers of this trend: a competitive labor sector, abundant natural gas and low cost electricity. Its findings demonstrate the importance of removing barriers to natural gas exports. BCG projects that U.S. shale-gas production is projected to double to 12 trillion cubic feet by 2013.
McKinsey Global Institute: Revising the LNG Export Process: Policy Recommendations to Reduce Uncertainty
The U.S. economy faces far more than cyclical troubles. It needs deeper, structural changes to substantially boost productivity and generate new jobs. MGI identifies five catalysts for growth and quantifies their possible impact: the booming shale gas and oil industry, trade growth, infrastructure investment, advances in data analysis and educational overhauls. Though all five require large investments, the cost could be shared by different levels of government and by the private sector, the report says.
Small Business & Entrepreneurship Council: The Benefits of Natural Gas Production and Exports for U.S. Small Businesses
Report calculates the sizeable growth in the number of employer firms and jobs in the energy sector between 2005-2010. The findings underscore the need for policies that encourage and enable this positive development for the U.S. economy. It also examines the state-specific impacts of natural gas development in Arkansas, Colorado Louisiana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, and West Virginia. (State-Specific Data)
ICF International/API: U.S. LNG Exports: Impacts on Energy Markets and the Economy
The independent consultancy firm ICF International studied the energy market and economic impacts of LNG exports. ICF found that the net effects on U.S. employment from LNG exports would result in 73,100 to 452,300 net job growth between 2016 and 2013; manufacturing job gains would average between 7,800 and 76,800 net jobs between 2016 and 2035; and the net effect on annual U.S. GDP of LNG exports is expected to be positive at about $15.6 to $73.6 billion annually between 2016 and 2035.
ICF International also found that LNG exports are projected to have moderate impacts on domestic U.S. natural gas prices of about $0.32 to $1.02per million British Thermal Units (MMBtu) on average between 2016 and 2035. This results in 2016 – 2035 average Henry Hub natural gas price estimates of between $5.03 and $5.73/MMBtu, depending on the LNG export case.
American Chemistry Council: Shale Gas, Competitiveness, and New U.S. Chemical Industry Investment: An Analysis Based on Announced Projects
This report examines the potential economic benefits of U.S. chemical investments linked to robust and affordable supplies of natural gas from shale. The third in a series, the report analyzes nearly 100 chemical industry investment projects that have been publicly announced through the end of March 2013.
BiPartisan Policy Institute: New Dynamics of the U.S. Natural Gas Market
The analysis presented in this report considered the relative impact of a realistic range of supply and demand drivers that will shape future U.S. energy markets. The scenario analysis revealed that within the suite of natural gas supply and demand assumptions considered, there are ample domestic supplies of natural gas to meet future demand without significant price increases. Similarly, the analysis shows that the United States is uniquely positioned to take advantage of the economic, environmental, and energy security benefits of the country’s large natural gas resource base. Natural gas resources have the potential to create new market opportunities for expanded natural gas use in ways that will grow the economy and improve the environmental performance of the U.S. energy system, if the environmental challenges associated with natural gas development using horizontal drilling and hydraulic fracturing are addressed by industry in collaboration with state and federal regulators.
American Security Project: The Geopolitical Implications of U.S. Natural Gas Exports
This paper examines the geopolitical benefits of removing restrictions on LNG exports to two key regions – Europe and Asia. Permitting new LNG export capacity will provide more liquidity to the global LNG market, helping to reduce prices and provide alternative supplies for some of America’s closest allies. More LNG export capacity will also erode the practice of oil-indexation in Europe and Asia. This will reduce the ability of bad actors to use energy supplies as a political tool. Allowing American LNG to reach world markets will enhance the energy security of our allies, providing geopolitical benefits to the U.S.
While much attention has focused on the impact of U.S. LNG exports on the U.S. market, this study specifically analyzes the potential economic consequences of those exports on global markets. It attempts to estimate the potential price impacts, gas supply changes, and flow displacements if the U.S. exported a given volume of LNG to either Asia or Europe. This study finds that U.S. LNG exports could hasten the transition away from oil price indexation of gas supply contracts. Exports are also projected to decrease fairly significantly in regions importing U.S. LNG, but only marginally increase in the U.S.
This report, the result of a year-long study, addresses the merits of increased LNG exports through an examination of the feasibility of exports and their likely implications. It concludes that, given current information on resources, increased LNG exports from the United States are likely to make a positive, albeit relatively small, contribution to the U.S. gross domestic product (GDP) and trade balance. The authors also argue that government efforts to intervene in the market by policy makers are likely to weaken the position of the United States as a supporter of a global trading system characterized by the free flow of goods and capital.
The Hamilton Project: A Strategy for U.S. Natural Gas Exports
A surge in low-cost U.S. natural gas production has prompted a flurry of proposals to export liquefied natural gas (LNG). A string of permit applications are now pending at the Department of Energy (DOE), and more can be expected; lawmakers are also debating the wisdom of allowing LNG exports. This paper proposes a framework for assessing the merits of allowing LNG exports along six dimensions: macroeconomic (including output, jobs, and balance of trade), distributional, oil security, climate change, foreign and trade policy, and local environment. Evaluating the possibility of exports along all six dimensions, it finds that the likely benefits of allowing exports outweigh the costs of explicitly constraining them, provided that appropriate environmental protections are in place. It thus proposes that the DOE and the Federal Energy Regulatory Commission (FERC) approve applications to export natural gas. It also proposes steps that the United States should take to leverage potential exports in order to promote its broader trade and foreign policy agendas.
This report by the Deloitte Center for Energy Solutions and Deloitte MarketPoint LLC shows that the North American gas market is dynamic. If exports can be anticipated, then producers, midstream players, and consumers can act to mitigate the price impact. Producers will bring more supplies online, flows will be adjusted, and consumers will react to price change resulting from LNG exports.
Massachusetts Institute of Technology: The Future of Natural Gas
The Future of Natural Gas is the fourth in a series of MIT multidisciplinary reports examining the role of various energy sources that may be important for meeting future demand under carbon dioxide (CO2) emissions constraints. In each case, we explore the steps needed to enable competitiveness in a future marketplace conditioned by a CO2 emissions price or by a set of regulatory initiatives.
American Chemistry Council: Shale Gas and New Petrochemcials Investment: Benefits for the Economy, Jobs, and US Manufacturing
America’s chemical companies use ethane, a natural gas liquid derived from shale gas, as a feedstock in numerous applications. In its report, ACC analyzed the impact of a hypothetical, but realistic 25 percent increase in ethane supply on growth in the petrochemical sector and outlines the opportunity for shale gas to strengthen U.S. manufacturing, boost economic output and create jobs.
MJ Bradley & Associates (report for Clean Skies Foundation and Task Force for Ensuring Stable Natural Gas Markets): Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas
The analysis presented in this report provides a foundation for a discussion about natural gas markets outside the U.S. as well as a handful of non-energy commodities. It shows that major structural differences between markets in the US, UK, Germany, Japan, and South Korea set up fundamental differences in the key drivers of pricing in each market – the ever-changing mix of supply, consumption, and storage. With history as a guide, the one certain thing is that these markets will never become static. Continuous movement and increasing interdependence will drive each country to refine its own unique regulatory approach to managing markets. Price shocks will no doubt continue, and each shock will inevitably create winners and losers.