Source http://www.api.org/news-and-media/news/newsitems/2013/nov-2013/~/media/Files/Policy/LNG-Exports/API-State-Level-LNG-Export-Report-by-ICF.pdf

America is in the midst of an energy revolution. As of 2012, unconventional oil and natural gas development supported 2.1 million jobs, and it is projected to support 3.9 million jobs by 2025. In 2012, according to EIA, we surpassed Russia as the world’s energy superpower – producing more oil and natural gas than any other country. At the same time, we’ve reduced U.S. carbon dioxide emissions to near 20-year lows thanks, in part, to the carbon advantages of natural gas. But, for American workers, the best is yet to come. The export of liquefied natural gas – or LNG – represents one of the most promising economic opportunities of the shale revolution. These exports will significantly reduce our trade deficit, increase government revenues, grow the economy, and support millions of U.S. jobs in engineering, manufacturing, construction, and facility operations.

America is in a global race to build this infrastructure and secure a competitive position in the international market. More than 60 international LNG export projects are currently planned or under construction around the world, and those nations that act quickly to attract these investments will reap the economic rewards.

Fortunately, U.S. workers are in a very good position to win that race.

The opportunities associated with LNG exports will extend beyond natural gas-producing states. According to the energy consulting firm, ICF International, by 2035:

  • LNG exports could contribute as much as $10 to $31 billion per state to the economies of natural gas-producing states, such as Texas, Louisiana, and Pennsylvania.
  • Non-natural-gas-producing states will also benefit, partly due to the boost in demand for steel, cement, equipment, and other goods. 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.
  • Natural gas-producing states could see employment gains as high as 60,000 to 155,000 jobs; and large manufacturing states, such as California and Ohio, will see employment gains upwards of 30,000 to 38,000 jobs in 2035.
  • There could also be significant job growth in states where LNG export terminals could be built. For example, in a high export scenario, in which an Alaska-based terminal is built, Alaska can expect up to a $10 billion addition to state income and over 36,000 added jobs resulting from LNG exports.

LNG, or liquefied natural gas, is a clear, odorless, noncorrosive, nontoxic liquid that is formed when natural gas is cooled to around -260 Fahrenheit. This shrinks the volume by about 600 times, making the resource easier to store and transport through marine shipments. LNG is not stored under pressure and is not explosive or flammable in its liquid state, and it cannot be released rapidly enough to cause overpressures associated with explosions.

LNG has been safely handled for several decades, with LNG vessels having made more than 100,000 voyages without major accidents or safety problems. The LNG industry is highly regulated by the Federal Energy Regulatory Commission, the Department of Transportation, the U.S. Coast Guard and the Department of Homeland Security, and other agencies to ensure that vessels, facilities and personnel provide and deliver safe operations and transport.

Industry advancements in hydraulic fracturing and horizontal drilling have led to a dramatic increase in the estimated recoverable shale gas resources located in the United States. Development of these clean-burning natural gas resources is dependent upon the ability to utilize hydraulic fracturing in operations, as an estimated 70 percent of our domestic natural gas in the future will come through the use of hydraulic fracturing. Estimates of the United States’ natural gas resource base dwarf projections for total cumulative consumption and cumulative exports (2015–2035).

The U.S. Energy Information Administration (EIA) estimates that total U.S. consumption of natural gas from 2015 to 2040 is only 31.6% of their resource estimates, and consumption is only 17.9% of resource estimates by ICF International. And export amounts in the EIA’s AEO 2015 Reference Case projections in no way threaten America’s supply of natural gas.

Some have suggested that the federal government should establish an artificial limit on LNG exports, but government action is not necessary, because we already have a limit, courtesy of supply and demand. The level of planned and proposed facilities for natural gas liquefaction – the process to make natural gas exportable – far exceeds projected global demand. And the window for the U.S. is closing rapidly – some of the planned capacity outside of the U.S. is already under construction. To capture this economic opportunity we must act quickly.

A limit is not needed to protect consumers as recent studies conclude that LNG exports would have a minimal impact on domestic natural gas prices. According to an October 2014 EIA study, the price impact of 12-20 billion cubic feet per day (Bcf/day) of LNG exports would range from between 4 and 11 percent. A U.S. Department of Energy (DOE) study concludes that global markets limit how high U.S natural gas prices will rise and that U.S. natural gas prices do not become linked to oil prices in any of the cases they examined.

As energy historian Daniel Yergen put it: “There are two points to be made now. First, the scale of American LNG exports would be naturally limited by the competition from other existing suppliers around the world, as well as by new supplies coming from recent large gas discoveries offshore of East Africa and Israel. Second is a larger context. The U.S. is successfully pushing Japan to reduce its oil imports from Iran, one of its largest traditional suppliers. At the same time, Japan…is buying expensive LNG from both spot markets and traditional suppliers in the Middle East and Asia to replace nuclear power for generating electricity. How can America, having asked Japan to reduce Iranian oil imports, turn around and prohibit the export of surplus natural gas to this key ally?”

Japan is not alone in seeking U.S. natural gas exports. American allies around the world have expressed a keen interest in LNG as a means of diversifying their energy portfolios. In his remarks to a U.S. congressional panel, Zygimantas Pavilionis, Lithuanian Ambassador to the United States and Mexico, said this: “An ability to import natural gas from the U.S., even if very small amounts by U.S. standards, would make a huge impact on the Lithuanian gas market and allow the nation to develop a reliable alternative to Russian gas.”

U.S. Domestic Gas Production & Gas Consumption Changes

LNG Export Case 2012-35 Annual Growth (%)
Zero Export Case 1.49%
ICF Export Case 1.64%
Middle Export Case 1.79%
High Export Case 2.05%


Source: ICF estimates: http://www.api.org/news-and-media/news/newsitems/2013/nov-2013/~/media/Files/Policy/LNG-Exports/API-State-Level-LNG-Export-Report-by-ICF.pdf

A December 2012 National Economic Research Associates (NERA) study completed for the DOE concluded: “Across all [studied] scenarios, the U.S. [is] 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.”

Exporting natural gas would directly support thousands of U.S. jobs in engineering, manufacturing, construction, and operation of the export infrastructure, as well as others indirectly along the equipment supply chain. Contrary to claims that LNG exports would reduce domestic supply, LNG exports will drive additional U.S. natural gas production and support thousands of additional jobs created through increased production: An IHS report on the economic impacts of shale gas estimates that for every 1 Bcf/d of shale gas production, approximately 32,000 total jobs are supported throughout the economy

An October 2014 report from the EIA confirmed previous findings that higher levels of LNG exports would yield greater economic gains for the U.S. The report found that higher levels of exports prompt more U.S. growth and increase investment in American energy security. Across the board, demand for exports was met with higher domestic production, showing that America has the resources to supply affordable energy here at home, while lowering the trade deficit, creating new jobs, and supporting our allies overseas. Even in a pessimistic scenario the EIA called ‘particularly implausible’, the economic gain for America far outweighed a modest increase in natural gas prices. In more likely scenarios, the potential change in prices was marginal, with an impact on electricity bills near zero. More importantly, America’s economy will grow as exports grow, providing more jobs and more income here at home.

More than sixty competing LNG projects are planned or under construction on foreign shores. It’s time to lock-in America’s position as an energy superpower by speeding up the federal review process for dozens of projects still facing lengthy delays.

LNG has been safely handled for several decades, more than 135,000 LNG carrier voyages have taken place without major accidents or safety or security problems, either in port or at sea. LNG history in the US dates back to 1940’s and LNG tanker trade initiated with exports in 1969. LNG ships are double-hulled, with more than six feet of void space or water ballast between the outer and inner hulls and the cargo tanks. The double hulls help to prevent leakage or rupture in the event of an accident. LNG ships are also equipped with sophisticated leak detection technology, emergency shutdown systems, advanced radar and positioning systems, and numerous other technologies designed to ensure the safe and secure transport of LNG.

The U.S. Coast Guard determines the suitability of every LNG ship that delivers cargoes into and out of the U.S. through a rigorous annual inspection. If a ship fails the inspection, all deficiencies must be fixed before it can unload its cargo or leave the country. LNG ships are issued a Certificate of Compliance by the Coast Guard to state that they are in complete compliance with U.S. regulations. In addition numerous other federal agencies regulate this industry in the United States, including the Federal Energy Regulatory Commission (FERC), the Department of Transportation (DOT), and the Department of Homeland Security (DHS).

White House Council of Economic Advisers—Annual Report—Feb. 19, 2015

“An increase in U.S. exports of natural gas, and the resulting price changes, would have a number of mostly beneficial effects on natural gas producers, employment, U.S. geopolitical security, and the environment. . . [E]xpanded natural gas exports will create new jobs in a range of sectors including natural gas extraction, infrastructure investment, and transportation.”

NERA Senior Vice President David Montgomery – Bipartisan Policy Center Event – Jul. 25, 2013

“In some ways the pursuit of this notion of where is the ‘sweet spot’ is a will-o-the-wisp, and I’ve gone through many efforts to try to figure out why there is so much concern about our exporting too much. …The question is where the government is trying to make something happen that would not happen without the affirmative action of government. …But natural gas exports are not something which are being created by government action. They’re something that will happen. The market itself will determine quite well (the proper balancing point). …In this case all we really need to do is get out of the way.”

Wall Street Journal Editorial Board—Energy Economics in One Lesson—Dec. 6, 2012

“In the real world, growing demand for a product leads to rising prices and then an increase in supply. If world demand rises for LNG, natural gas prices will rise and U.S. producers will look for more gas. Many U.S. drilling rigs have moved to extract more oil rather than gas in the last couple of years precisely because of a glut of gas in the U.S. market that saw prices fall to as low as $2 per million BTUs. As exports rise, so will income for U.S. producers and workers.”

Washington Post Editorial Board—Natural gas exports: A boon to the economy—Dec. 7, 2012

“Usually, opponents of freer trade argue that Americans shouldn’t be buying so many cheap products from abroad, sending their cash overseas. But when it comes to exporting some of this nation’s abundant supplies of natural gas, those who oppose opening up to the world turn that logic on its head — arguing, strangely, that Americans shouldn’t be trying to sell this particular product to other nations, bringing money into the country in the process. Both arguments are unconvincing, and for the same reason: When countries can buy and sell to each other, their economies do what they are best at, producing more with less and driving economic growth.”

New York Times Editorial Board—Sending Natural Gas Abroad—Dec. 15, 2012

“A new and long-awaited report from the Department of Energy has concluded that the government should quickly begin easing restrictions on the export of natural gas to take advantage of the vast new discoveries of a fuel that only a decade ago was in relatively short supply in this country… we are persuaded by the report’s core finding that the benefits of selling gas to other countries would more than offset the modestly negative impact of higher prices for domestic users of the fuel.”

Bill Richardson and Spencer Abraham, former U.S. Secretaries of Energy—Shale Gas Exports will Aid US and its Allies—Dec. 22, 2012

“We believe, however, that LNG exports can buttress US geopolitical leadership and trade, while at the same time continuing to support low domestic natural gas prices and a renaissance in domestic manufacturing. In addition LNG exports offer the potential for lower global carbon emissions. The US Department of Energy has confirmed this view in a new report examining the wisdom of exporting LNG. The report, which echoes many other studies, concludes that exports would broadly benefit the US economy with little impact on domestic natural gas prices.”

Michael Levi, Council on Foreign Relations—The Case for Natural Gas Exports—Aug. 15, 2012

“The United States, which has imported natural gas for many years, has long benefited from a relatively open system for global trade in energy. Allowing natural-gas exports while protecting the environment and low-income consumers is the right way to go.”

  1. NERA Study: Macroeconomic Impacts of LNG from the United States http://bit.ly/19to1lN
  2. EIA – Effect of Increased Natural Gas Exports on Domestic Energy Markets, January 2012 http://energy.gov/sites/prod/files/2013/04/f0/fe_eia_lng.pdf
  3. Deloitte: Made in America: The Economic Impact of LNG Exports from the United States http://bit.ly/19toep7
  4. Deloitte: Exporting the American Renaissance: Global impacts of LNG exports from the United States http://bit.ly/YSgsnP
  5. Daniel Yergin: The Real Stimulus: Low-Cost Natural Gas – The Wall Street Journal http://on.wsj.com/19tnxfs
  6. Sending Natural Gas Abroad–The New York Times http://nyti.ms/11LWnvz
  7. The Case for Natural Gas Exports–Michael Levi, Council on Foreign Relations http://nyti.ms/11LW2sQ
  8. Say Yes to LNG–The Baltimore Sun http://bit.ly/11LWN57
  9. Natural-Gas Exports Could Lift U.S. Trade and Economy–Bloomberg View http://bloom.bg/11LX7kk
  10. Shale gas exports will aid US and its allies–Bill Richardson and Spencer Abraham http://1.usa.gov/11LXoDS
  11. ICF International, “U.S. LNG exports: Impacts on energy markets and the economy” http://www.api.org/~/media/Files/ Policy/LNG-Exports/API-LNG-Export-Report-by-ICF.pdf
  12. ICF Study: U.S. LNG Exports: State-Level Impacts on Energy Markets and the Economy http://bit.ly/1cYmNBi
  13. API Map of LNG sites Critical to U.S. Export Goals http://bit.ly/15Xdin6
  14. EIA – Effect of Increased Natural Gas Exports on Domestic Energy Markets, October 2014 http://www.eia.gov/analysis/requests/fe/pdf/lng.pdf