Kyle Isakower's remarks at press conference on the state by state economic contributions of LNG exports
As prepared for delivery
Press Conference on the State-by-State Economic Contributions of LNG Exports
Kyle Isakower, API vice president for regulatory and economic policy
Thursday, November 14, 2013
Opening statement, as prepared for delivery:
Good morning and thank you for joining our call today.
As you are probably aware, America is in the midst of an energy revolution. U.S.-born innovations in hydraulic fracturing and horizontal drilling have unlocked vast energy reserves here in the United States. 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.
This year, 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.
A previous study by ICF International demonstrated these benefits on a national basis – a conclusion that has been confirmed in a NERA analysis commissioned by the Department of Energy.
Today’s study from ICF demonstrates, on a state-by-state basis, the anticipated contributions of LNG exports to American employment, manufacturing, and economic activity.
This latest report shows that the opportunities associated with LNG exports will extend beyond natural gas-producing states, and that the economic impacts could be substantial in many areas.
According to ICF, 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, by 2035.
However, non-natural-gas-producing states will also benefit, partly due to the boost in demand for steel, cement, equipment, and other goods. According to the report, 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 in 2035.
In terms of employment, natural gas-producing states could see employment gains as high as 60,000 to 155,000 jobs in 2035. And large manufacturing states, such as California and Ohio, will see employment gains upwards of 30,000 to 38,000 jobs in 2035.
We also see 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 in 2035 resulting from LNG exports.
However, even in a modest export scenario, new terminals elsewhere are expected to create ample job opportunities.
That is because each export terminal represents a multi-billion dollar investment in infrastructure with long-term investments in labor and materials.
It’s worth noting that 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.
But it is critical that the Department of Energy address the backlog of 22 applications to sell LNG to countries that do not have free trade agreements with the United States. Each of these terminals could create thousands of jobs, grow the economy, and significantly increase government revenues.
And, as we can see in today’s report, the economic benefits will be felt all around the country.
Even in states that don’t benefit directly from LNG exports, the overall boost to broader growth – particularly in manufacturing – is anticipated to counterbalance or exceed the relatively small expected impact of slightly higher natural gas prices estimated by ICF.
According to the report, over half of all states could see over $1 billion in state income gains from LNG exports by 2035 and at least 6,000 net jobs.
That is because the long-term impact of LNG exports will mean stronger, more reliable U.S. production of fuel for both domestic consumption and export.
And in many states, the contributions of LNG exports will play a significant role in the state’s economy.
In Louisiana, for example, we see LNG exports adding as much as 4 percent to the state’s employment relative to 2012 levels. And in Wyoming, the employment gains resulting from LNG exports in 2035 could exceed 6 percent, based on last year’s employment figures.
According to ICF, the states that will benefit most from LNG exports in terms of jobs and state income are, in order: Texas, Louisiana, Pennsylvania, Alaska, Ohio, California, New York, Wyoming, Arkansas, and Illinois.
And those numbers for all states can be found on pages 38 and 47 of the report.
Now, I’d be happy to take your questions.