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American Public Gas Association comments on LNG study

LNG Industry,

On 24th January, the APGA filed comments on the DOE study conducted by NERA Consulting titled ‘Macroeconomic Impacts of LNG Exports from the United States.’

The DOE released the NEAR study in December of last year as the complement study to an earlier piece on the domestic price impacts of LNG exports. NERA modelled various scenarios for export making assumptions about domestic access to supply, costs of production, various levels of world demand, etc. Across all scenarios, the report concluded, ‘the range of aggregate macroeconomic results from this study suggests that LNG export has net benefits to the US economy.’

Proponents of export have seized on the general conclusion of the study as evidence that unfettered LNG exports should be the country’s policy. However, APGA and other members of America’s Energy Advantage (AEA), continue to argue that the NERA study is fundamentally flawed and does not present an accurate picture of the potential impacts of export.

APGA’s comments

The comments filed by the APGA focus on the following areas:

  • The study significantly underestimates future domestic demand for natural gas.
  • The financial benefits of export will flow almost exclusively to natural gas producers and the very few stockholders of those production companies.
  • Exporting LNG will increase prices for all domestic consumers and will lead to market convergence between the US price and the oil indexed world price.
  • Increased natural gas prices because of export will depress wages and capital income in all other sectors of the economy and will negatively impact business investment.
  • Increased natural gas prices from export will stifle a burgeoning manufacturing renaissance, which could provide hundreds of thousands of new jobs over the next 20 – 30 years.

Edited from press release by Claira Lloyd.

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