New study reveals economic benefits of LNG exports
|According to a new study commissioned by the American Petroleum Institute, exports of U.S. liquefied natural gas (LNG) could create at least 73,100 to 145,100 jobs at home.|
According to a new study commissioned by the American Petroleum Institute, exports of U.S. liquefied natural gas (LNG) could create at least 73,100 to 145,100 jobs at home, with numbers potentially reaching between 220,100 and 452,300 over 20 years. At the same time, exports would have hardly any noticeable impact on domestic gas prices, the research by ICF International found.
A report called U.S. LNG Exports: Impacts on Energy Markets and the Economy predicted that LNG exports would contribute to U.S. gross domestic product a further $15.6 billion to $73.6 billion per year in the period between 2016 and 2035. These estimates were based on the impact of liquids that would be produced along with the gas and the projected increase in petrochemical production resulting from more abundant natural gas liquids feedstock. All economic multiplier effects have also been factored in, the researchers explained.
Some 25,000 of these jobs could be created in manufacturing, the Oil and Gas Journal reported. U.S. Rep. Bill Johnson, chair of the House LNG Export Working Group, commented that if LNG exports increase a corresponding growth could be expected in manufacturing as well, bringing further benefits to the economy. Rep. James Lankford (R-Okla.), also member of the group which released the report, added that there was an interest in U.S. LNG from overseas and that the United States should take advantage of this fact.
Harry Vidas, ICF International vice president, said that projections made in the study were based on a minimal scenario of exports of four billion cubic feet per day (bcfd), a medium case with 8 bcfd and a high case with 16 bcfd. He explained that many countries are trying to find markets to export their excess gas and there were at least 63 foreign projects that could potentially export 50.5 bcfd. The United States has the opportunity to claim between eight percent and 25 percent market share, Vidas estimated.
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The research found that the vast majority of LNG exports, or between 78 percent and 88 percent, could be offset by increased domestic production, which would have a more beneficial effect on the national economy than taking the necessary gas from other uses, Vidas pointed out. Gas liquid volumes would rise since they would be stripped out of the gas before it is liquefied and liquids like ethane and propane would give a boost to the petrochemical industry, he said.
Vidas also noted that the findings from the ICF research were in line with what National Economic Research Associates concluded when looking into possibility of LNG export and its potential impact. That study also found that LNG exports would result in net economic benefits that would grow as volumes increased.