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Study: Natural gas exports would help economy

Exporting natural gas would benefit the U.S. economy even if it led to higher domestic prices for the fuel, according to a study commissioned by the Energy Department.

The study was commissioned to help guide officials as they decide whether to approve 15 liquefied natural gas export applications now under review by the department. The report’s findings could push the department to approve some or all of the applications.

Companies are hoping to export U.S. natural gas because it is cheaper by at least half than natural gas in Europe and Asia.

Consumer advocates and manufacturers that use natural gas as a raw material or fuel source have opposed exports. They fear exports will drive up prices for residents and increase manufacturing costs.

Environmental groups are opposed to natural gas exports because of the impact of increased drilling and because it takes an enormous amount of energy to chill natural gas into a liquid to prepare it for export.

The study, conducted by NERA Economic Consulting in Washington, did find that households would have to pay more for heating, cooking and electricity, and that industries that depend on natural gas to make their products would suffer somewhat.

But exports would help reduce the country’s trade imbalance and increase U.S. household income, the study said. Natural gas producers would benefit from higher prices and economic activity would increase with additional drilling.

On the whole, the study said, the U.S. is projected to see a net economic gain from exports. The study considered scenarios ranging from no natural gas exports to unlimited exports. In every scenario the U.S. gains, and the more gas that is exported, the bigger the benefit, according to the report.

The oil and gas industry cheered the report.

“Exports can help grow the country’s economy, help reverse our trade deficit and help bring back millions of U.S. jobs in engineering, manufacturing, construction and facility operations,” said Erik Milito, group director for upstream and industry operations at the American Petroleum Industry, an oil and gas lobbying group.

The 15 projects in front of the Energy Department for review seek to export a total of 24 billion cubic feet of natural gas per day. That would represent an increase of 34 percent over this year’s average U.S. natural gas consumption of 70 billion cubic feet per day.

After a 45-day initial comment period on the study and a 30-day reply comment period, the department said it will review the 15 applications on a case by case basis.

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