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Nat Gas Exports Could Add $73B To U.S. Economy

natural gas pipeline

Higher natural gas exports from the U.S. in the years to 2040 could add between US$50 billion and US$73 billion to the economy and create 220,000-452,000 new jobs, ICF said in a press release from the American Petroleum Institute.

The authors of the report, titled Impact of LNG Exports on the U.S. Economy: A Brief Update, note that its purpose was to check whether there is really a cause for worry that raising LNG exports would lead to higher natural gas prices at home as well as other, related negative consequences.

The report is a revision of an earlier one compiled in 2013, and the revision suggests the situation in U.S. natural gas has changed for the better. First, there is a greater resource base thanks to tech advances in production. Today, ICF says, the Lower 48 and Canada can produce 1,798 trillion cu ft of gas at US$5 per mmBtu in 2016 dollars. This compares with 1,250 trillion cu ft for the same price four years ago.

As regards the global natural gas market, the study suggests that the market for U.S. LNG exports has grown substantially since 2013 and now the country can export between 8 and 24 billion daily versus earlier projections of 4-16 billion cu ft daily.

The reason the U.S. can export more, besides ample supply, is also lower cost. In 2013, ICF projected that if exports rise, natural gas prices will increase by US$0.11-0.12 per mmBtu. Now, the market researcher says the price increase will be in the range of US$0.05-0.06 per mmBtu.

Related: Scotland To Permanently Ban Fracking

Factors such as a drive for cleaner energy sources will support demand for U.S. natural gas, and so will the delays and production outages at non-U.S. LNG projects, ICF noted in its report. Lower terminal construction coasts on the Gulf Coast will also support U.S. LNG’s competitiveness.

On the other hand, slower economic growth globally will act as a head wind for natural gas demand, Also, floating production, storage, and offloading vessels are starting to be deployed by international competitors, encroaching on the competitiveness of U.S. supplies.

Despite these challenges, the ICF study suggests growth in natural gas exports will ultimately be beneficial for the economy at no great additional cost.

By Irina Slav for Oilprice.com

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  • John Machowicz on October 06 2017 said:
    How much it adds to the economy does not matter when we are in the midst of a Climate Crisis caused by the reckless pursuit of extracting fossil fuels. Who will be profiting from this is really the issue? Follow the money. https://www.thedailybeast.com/how-congress-makes-regular-taxpayers-foot-the-bill-for-oil-pipeline-fat-cats
  • Refman on October 04 2017 said:
    Best be careful we don't follow Australia's example and let these companies export so much that Natural Gas prices sky rocket here at home.

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