Report: Big Job, Economic Numbers Would Accompany LNG Exports
Posted May 15, 2013
Key findings in a new report by ICF International, analyzing the potential impacts of exporting U.S. liquefied natural gas (LNG):
Jobs – Average net growth is projected to range from 73,100 to 452,300 between 2016 and 2035.
This wide estimated range reflects the fact that the net job impacts will depend, in part, on how much “slack” there is in the economy and how much the demand for LNG-export-related labor will “crowd out” other labor demands. Manufacturing job gains average between 7,800 and 76,800 net jobs between 2016 and 2035, including 1,700-11,400 net job gains in the specific manufacturing sectors that include refining, petrochemicals, and chemicals.
Economic Growth – Net effect on U.S. GDP is projected to range from $15.6 billion a year to $73.6 billion by 2035.
ICF’s GDP projection includes the impacts of additional hydrocarbon liquids that would be produced along with the natural gas, greater petrochemical production using more natural gas liquids feedstocks and all economic multipliers.
Government Revenue – LNG exports are projected to produce annual increases in revenue to federal, state and local governments of between $6.4 billion to $9.3 billion in the base scenario to $27.9 billion to $40.4 billion in the high-export scenario by 2035. ICF:
Increased government revenues resulting from LNG exports are expected to be in the form of federal, state, and local taxes on GDP gains associated with additional economic activity, as well as additional royalty payments to the government for natural gas production taking place on government lands. State and local taxes (which include severance taxes associated with natural gas production) comprise the largest share of government revenues, with federal taxes making up a smaller portion. A slight increase in federal royalties is anticipated to comprise the remaining source.
The report’s lead author, Harry Vidas, says the findings confirm key portions of a study done for the Energy Department by NERA Economic Consulting that was released late last year – that LNG exports would have a net positive effect on the U.S. economy and that the bigger the level of U.S. exports, the bigger the resulting benefits. Vidas said ICF’s analysis indicated job growth would be real, not existing workers simply swapping one energy-sector job for another.
ICF studied the impacts of export scenarios ranging from 4 billion cubic feet per day to 16 bcfd – if not limited by government regulation. ICF projects that U.S. LNG exports could have 12 to 28 percent market share of new LNG contract volumes in 2025 and 8 to 25 percent in 2035.
The caveat about government regulation is key. The Energy Department is reviewing federal permit applications for 20 U.S. LNG export facilities. Thanks to America’s vast shale deposits and hydraulic fracturing, we have ample supplies of natural gas to support domestic needs as well as demand from allies overseas. But competition in the global LNG market is developing. Government shouldn’t pick winners and losers here. Rather, it should approve valid export applications and let the market make its determinations. The ICF report suggests that continued delay in considering these applications means delaying significant benefits to U.S. workers and our economy. API President and CEO Jack Gerard:
“Increasing LNG exports is clearly in our national interest and will help the U.S. reach the president’s goal to double U.S. exports. The industry is ready to invest in American infrastructure to create jobs and produce more domestic energy as soon as the Department of Energy moves forward with the approval of LNG export applications. Timely approval of LNG exports is crucial if we want to be competitive with international projects rushing to be first to market. Allowing the export of LNG would mean more jobs, growth in U.S. GDP, and less debt – key priorities of the American people."
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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