Should US export natural gas? Study for DOE fuels fiery debate.
According to the study, global market conditions are not yet ripe for US natural gas exports, but when they are, the exports would benefit the economy. A key issue is how that benefit is shared.
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But among others in Congress, the knives were already drawn for the study's conclusions, with opponents of LNG exports saying the higher natural gas prices would cost the nation jobs while enriching the oil and gas industry, despite the study's overall positive assessment.Skip to next paragraph
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An LNG export skeptic, Senator Wyden is in a position to do something about it as the expected new chair of the Senate Environment and Natural Resources Committee. "It is critical that exports do not squeeze out or price out the billions of dollars of new, natural gas-related investments that have been proposed in the U.S. chemical, industrial and electric generation sectors.”
Others like Rep. Ed Markey (D) of Massachusetts are adamant. He cites a House Natural Resource Committee minority report that from 2000 to 2008, natural gas prices that rose more than 400 percent were "a major contributor to the U.S. manufacturing sector losing 3.7 million jobs."
The new NERA study takes an opposing view: "LNG exports are not likely to affect the overall level of employment in the U.S. There will be some shifts in the number of workers across industries, with those industries associated with natural gas production and exports attracting workers away from other industries.
"Higher natural gas prices in 2015 can also be expected to have negative effects on output and employment," the report continues, "particularly in sectors that make intensive use of natural gas, while other sectors not so affected could experience gains. There would clearly be greater activity and employment in natural gas production and transportation and in construction of liquefaction facilities."
Chemical, steel, and fertilizer industries are likely to feel the pinch. As the largest industrial consumer of natural gas in the United States, the fertilizer industry uses 60 percent of all the US industrial-use natural gas. From 2000 to 2006, the House report said, that industry saw more than a third of US fertilizer production capacity shut down.
Other impacts will be felt in the electric utility sector. Right now gas is cheap and the industry is shifting to burning natural gas to produce electricity. That, along with increased use by buses and heavy trucks is also expected to drive up US natural gas use by 18 percent by 2035 under current policies, “causing coal demand to drop by around 9 percent and oil demand by around 6 percent,” the International Energy Agency reports.
But any price increase on natural gas could cut short the utility industry shift, Mr. Markey wrote in a letter to Energy Secretary Steven Chu in January.
"If exporting [LNG] means accelerated development, then we will more rapidly deplete natural gas resources that could help sustain future generations of Americans, leading to higher prices as resources diminish," he wrote.