April 2016, Vol. 243, No. 4


Exporting LNG: A Golden Opportunity We Must Seize

A historic milestone in America’s energy history was passed with the U.S’s first export of liquefied natural gas (LNG).  The shipment, worthy of celebration, comes in the midst of market volatility that amplifies the need for measures that would buttress the U.S. economy and keep growth – and employment – robust. Increasing the export of U.S. LNG will do just that, in addition to making our manufacturing base stronger, the environment cleaner, and our world safer.

LNG exports will drive economic growth by creating jobs, encouraging production, and stimulating investment, according to a substantial body of research that includes studies from Brookings Institution, Small Business & Entrepreneurship Council, Deloitte, and ICF International.

The Department of Energy’s own macroeconomic analysis, released in October, found that expanded export scenarios would add between $7.7-20.5 billion to the economy and between 9,600-35,200 jobs, to the U.S. workforce every year from 2026-40. The study concluded that economic benefits would increase with the level of exports: The more we export, the better off our economy will be.

U.S. manufacturers such as Caterpillar and the National Association of Manufacturers agree that LNG exports will support the domestic manufacturing resurgence and help bring jobs back to the U.S. Expanded LNG export scenarios will also increase demand for equipment and machinery and, in turn, for products like steel, a raw material for drill pipes, and cement, a key component of well construction. As DOE’s study found, “Firms that supply the natural gas sector and are involved in developing the infrastructure and supply chains needed to increase production and LNG exports benefit. This includes firms in the construction and engineering sectors.”

Not only will exporting LNG make the economy stronger, it will also make the global environment cleaner. A recent Pace study, commissioned by the Center for Liquefied Natural Gas, found that if Germany, Japan, South Korea, China, and India produced electricity from coal instead of U.S.-sourced LNG, their emissions from power generation would be 92 to 194 percent higher. Making LNG available for other countries to use will reduce emissions around the world and affecting a meaningful difference in the global effort to fight climate change.

There are 28 applications awaiting approval from the DOE to export natural gas, with an average approval time of 115 days. While it is encouraging that the House has already passed H.R. 8, the North American Energy Security and Infrastructure Act, aimed at streamlining the approval process to 45 days from up to 220 currently, the Senate is yet to vote on the issue.

Doing so and creating a legislative solution will ensure that that project applications are processed and reviewed in a consistent and timely manner, helping to unlock billions of dollars of investment into our domestic economy, which is now sidelined.

So, while this milestone is an important and significant one, it should also only be the first of many more to come. Exporting LNG is a golden and unique opportunity, but it is one that we must grasp quickly if we are to take full advantage of the manifest economic, environmental and geopolitical benefits it offers.

By Charlie Riedl, Executive Director, the Center for Liquefied Natural Gas


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