A new report from Charles River Associates adds to the growing list of studies that warn against the dangers of unrestricted exports.
According to the report, US Manufacturing and LNG Exports: Economic Contributions to the US Economy and Impacts on US Natural Gas Prices, allowing unchecked exports would have a direct negative impact on US employment, manufacturing, and the economy due in large part to a vast increase in the cost of natural gas.
Some of the key findings of the report include:
- US manufacturing contributes more to GDP, employment, and the reduction of the trade deficit as compared to LNG exports at a commensurate level of natural gas use.
- A global LNG supply shortage of 20-35 billion cubic feet per day by 2030 is projected, and US exports would likely play a major role in filling the gap, which in turn could lead to a tripling of natural gas prices from current levels by 2030.
- Manufacturing is highly sensitive to natural gas prices, and a significant portion of the US manufacturing sector is exposed to impacts from projected increased natural gas prices.
- Current expectations for a low-cost, gas-driven electricity economy and significant deployment of natural gas vehicles could be foregone due to LNG exports.
As outlined in the report, a threefold increase in the cost of natural gas under a high export scenario would be disastrous for our economy and destroy the advantage to our homegrown manufacturers.
In all, $90 billion of gas-intensive investment in manufacturing could be on the line. That’s a risk we can’t afford, especially given all the added benefits these investments bring to our economy.
As the Department of Energy considers whether to allow unrestricted natural gas exports, America’s Energy Advantage believes that this report should play a key role in making that final decision.