ICF study outlines LNG exports’ benefits to US economy

LNG exports could create at least 73,100-145,100 and up to 220,100-452,300 new US jobs over 20 years while having a minimal impact on US gas prices, a new ICF International study commissioned by the American Petroleum Institute concluded.

The study, US LNG Exports: Impacts on Energy Markets and the Economy, also found LNG exports would increase US gross domestic product by $15.6-73.6 billion/year from 2016 to 2035. The projection included the impacts of liquids that would be produced with the gas, greater petrochemical (olefins) production from more abundant natural gas liquids feedstock, and all economic multiplier effects.

As many as 25,000 of the new jobs would be in manufacturing, the study indicated. “You’re going to see a corresponding growth in manufacturing as LNG exports take off,” said US Rep. Bill Johnson (R-Ohio), who chairs the recently formed House LNG Export Working Group, which released the report at its first public meeting on May 15.

“I find that when I mention exporting natural gas, I get calls from other countries asking when we’re going to decide to do it,” added Rep. James Lankford (R-Okla.), another member of the group who also chairs the Oversight & Government Reform Committee’s Energy, Policy, Health Care, and Entitlement.

Harry Vidas, an ICF International vice president who directed the study, said ICF used a base-case scenario with 4 bcfd of exports, a medium case with 8 bcfd, and a high case with 16 bcfd.

An 8-25% market share

“There are many countries which are trying to market their excess gas,” he noted, pointing to 63 foreign LNG projects that potentially could export 50.5 bcfd. The US could wind up with an 8-25% incremental share of the potential market, he indicated.

The study also found that 79-88% of US LNG exports would be offset by new domestic production. “This would have a more positive economic impact than taking the gas from other uses,” Vidas said.

Gas liquid volumes would grow because they would be stripped out of the gas before it is liquefied, he indicated. “[Natural gas liquids] such as ethane and propane are important to the petrochemical industry,” Vidas said.

“A lot of manufacturing jobs associated with more LNG exports would be created,” Vidas said, adding, “In order to drill wells to produce the gas, you need manufactured goods. There also would be a small net jobs gain in the petrochemicals sector.”

Vidas said ICF’s study basically confirmed conclusions National Economic Research Associates reached when it study LNG export impacts for the US Department of Energy, which is considering whether authorizing them to countries which don’t have a free trade agreement with the US would be in the national interest.

Both found that LNG exports would produce net economic benefits which would grow as volumes increased, he said.

Lankford said the Natural Gas Act presumes that LNG exports would be allowed. “We need to make sure arbitrary limits aren’t imposed,” he maintained.

Contact Nick Snow at nicks@pennwell.com.

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