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LNG Exports Would Have "Net Economic Benefit"

Brian Hicks

Written By Brian Hicks

Posted December 7, 2012

According to a report backed by the Energy Department, the U.S. should focus heavily on developing liquefied natural gas exports considering the strong benefits to the national economy.

The NERA Economic Consulting Study was commissioned by the Energy Department to look at the effects of LNG exports in 63 different scenarios.

Reuters quotes the report:

“Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased.”

Despite the booming production going on nationwide, the nation hasn’t been exporting any LNG as the Presidential administration has held off any significant moves until this report became available.

But now the report has shown “net economic benefits” as a result, though it also indicated internal energy prices would rise somewhat. Manufacturers worry that this price rise will happen quickly; on the other hand, gas developers argue that exports must become a reality for production to keep moving.

The Department will now mull over the report before issuing decisions on the 15 pending applications it has already received.

The situation is complicated because gas exports, something that would definitely boost the overall economic situation in the long term, would require increases in the drastically-low price of gas.

Consumers and industries that are benefiting off these low prices will balk. Because of this, several U.S. lawmakers, like Ron Wyden (D-Oregon), have resisted the idea of approving more LNG exports.

The report explains the situation by claiming that the increased cost to domestic consumers would be balanced, and even improved upon, by the net increase in overall revenues, which would lead to increased real income.

Among the companies that have filed export applications are Dominion (NYSE: D), Sempra (NYSE: SRE), and Exxon Mobil (NYSE: XOM)—all of which stand to benefit greatly should the Department approve additional export terminals.

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