US would generally benefit from LNG exports, House panel told

Authorizing more liquefied natural gas exports potentially could increase domestic gas prices, but the US would benefit overall, witnesses told a US House Foreign Affairs Committee subcommittee.

“The shale gas boom can continue to strengthen the US economy, cut carbon emissions, and bolster US national security if Congress and the administration make the right decisions,” Michael A. Levi, director of the energy security and climate change program at the Council on Foreign Relations, told the committee’s Terrorism, Non-Proliferation, and Trade Subcommittee on Apr. 25.

“Allowing growth in LNG exports as part of a broad strategy aimed at capturing the opportunities created by abundant shale gas while protecting against accompanying risks would be a wise step forward,” he said in a prepared statement.

LNG exports could raise depressed gas prices and stimulate more drilling and development, noted Rob Bryngelson, chief executive of Excelerate Energy LP of The Woodlands, Tex., which is preparing to export LNG from a floating liquefaction storage unit on the Texas Gulf Coast to countries having a free trade agreement with the US.

This would encourage investment and stabilize the US gas industry by increasing the size and diversity of demand; create opportunities for rapid, voluntary supply diversions if domestic demand changes rapidly; and move production to a flatter part of the supply curve, making price changes smaller and available supplies larger, Bryngelson said.

David L. Millino, legislative department director at the Laborers’ International Union of North America, said that more LIUNA members would get jobs building pipelines from new US gas field developments.

“American workers need access to the good paying, family sustaining jobs that growth in the oil and natural gas sector provide,” he maintained. “In addition to drilling operations to recover gas, there is an extensive pipeline-compressor station infrastructure required

to move gas to facilities for processing or export.”

Net economic benefits

W. David Montgomery, a senior economist and vice president at NERA Economic Consulting who led the study the independent analytical firm did for the US Department of Energy on US LNG exports’ macroeconomic impacts, said researchers found there were net economic benefits to the US across all scenarios examined from allowing LNG exports.

“Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased,” he told the subcommittee. “In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports. There was no ‘sweet spot’, and no point where any “balance” was required to gain the greatest benefits.”

The decision to permit or restrict LNG exports potentially could raise trade considerations, warned Michael Ratner, an energy policy specialist at the Congressional Research Service.

“As a member of the World Trade Organization (WTO), the United States could be subject to cases under the General Agreement on Tariffs and

Trade’s General Prohibition Against Quantitative Restraints if exports were limited,” he said in his written statement.

“While certain exemptions from this prohibition may be granted, export restrictions may put the United States in a contradictory position vis-à-vis cases it has brought to the WTO,” Ratner said.

Contact Nick Snow at nicks@pennwell.com

Related Articles

China’s demand growth may make it globally dominant, speakers suggest

09/18/2014 China potentially could dictate terms as the fastest growing market in a world suddenly awash in potential oil and gas resources, speakers suggeste...

Spectra, NU announce New England gas pipeline expansion

09/17/2014 Spectra Energy Corp., Spectra Energy Partners, and Northeast Utilities (NU) plan to build the 1-bcfd Access Northeast natural gas pipeline expansio...

Senators offer bill to reform energy project cross-border permitting

09/16/2014 Four US senators—2 Democrats and 2 Republicans—introduced legislation to prevent extended delays of energy projects requiring a cross-border permit...

API official calls for end to nearly 6-year Keystone XL permit delay

09/16/2014 Three days before the sixth anniversary of TransCanada Corp.’s original filing for presidential approval of the proposed Keystone XL crude oil pipe...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected