LNG ex­ports rep­re­sent next step to U.S. en­ergy in­de­pen­dence

The Pak Banker - - 6BUSINESS -

With all the fo­cus on volatile oil prices, it would not be sur­pris­ing if most peo­ple missed one of the most im­por­tant en­ergy de­vel­op­ments of the year: last month's first ex­port cargo of liq­ue­fied nat­u­ral gas (LNG) from the con­ti­nen­tal United States.

Dis­patched from the Sabine Pass ter­mi­nal in Louisiana, this LNG ship­ment - and ad­di­tional ones to come - not only re­in­force Amer­ica's role as the leader in global en­ergy pro­duc­tion but pro­vide an­other tool for en­hanc­ing our re­la­tion­ships with al­lies, com­pet­ing with our ri­vals, and im­prov­ing our eco­nomic and na­tional se­cu­rity.

This would have been un­think­able a lit­tle more than a decade ago. In 2005, the United States im­ported 30 per­cent of the en­ergy it used. At that time, the En­ergy In­for­ma­tion Ad­min­is­tra­tion (EIA) pro­jected that to sat­isfy do­mes­tic de­mand, we would need to in­crease LNG im­ports 16fold in 2025 - from 0.4 tril­lion cu­bic feet to 6.4 tril­lion cu­bic feet. But thanks to tech­no­log­i­cal break­throughs and pri­vate-sec­tor in­ge­nu­ity, all these fore­casts turned out to be way off base. Last year, the United States pro­duced the largest vol­ume of nat­u­ral gas in its his­tory. Even with record con­sump­tion, the United States is now ex­port­ing LNG, and EIA's 2015 An­nual En­ergy Outlook projects that we will be a net en­ergy ex­porter some­time be­tween 2020 and 2030.

The ben­e­fits are nu­mer­ous. For do­mes­tic pro­duc­ers, who are cur­rently cop­ing with record low nat­u­ral gas prices, the abil­ity to ac­cess global mar­kets pro­vides a wel­come, if mod­est, boost.

This is es­pe­cially crit­i­cal for states like Penn­syl­va­nia that have en­joyed tremen- dous eco­nomic gains as a re­sult of the Marcellus Shale gas boom. In fact, from 2008 to 2014, Penn­syl­va­nia coun­ties in­volved in Marcellus Shale op­er­a­tions had 8.7 per­cent em­ploy­ment growth, com­pared with just 0.6 per­cent in non-Marcellus coun­ties, ac­cord­ing to the Bureau of La­bor Sta­tis­tics.

In­creas­ing LNG ex­ports can only help the Key­stone State's econ­omy grow stronger. Ac­cord­ing to a study con­ducted by ICF In­ter­na­tional, an East Coast con­sult­ing firm, Penn­syl­va­nia could see more than 59,000 jobs cre­ated by 2035, with an ad­di­tional $10.3 bil­lion in rev­enue. And no­tably, these num­bers don't take into ac­count the ex­tra jobs and in­come that will re­sult from mod­ern­iz­ing Penn­syl­va­nia's in­fra­struc­ture, such as ports and pipe­lines, which is nec­es­sary to meet the in­creas­ing de­mand for Amer­i­can LNG.

Be­sides the re­gional and na­tional ben­e­fits, there are also global ad­van­tages.

Take Europe for ex­am­ple. Eight of the 28 Euro­pean Union na­tions, in­clud­ing Poland, Es­to­nia, Lithua­nia, and Latvia, re­main heav­ily de­pen­dent on Rus­sia for as much as 80 per­cent of their an­nual nat­u­ral gas use. The Euro­peans rec­og­nize that the avail­abil­ity of am­ple and re­li­able U.S. sup­plies will al­ter that dy­namic. Maros Se­f­covic, the Euro­pean Union's en­ergy chief, re­cently com­mented in the Wall Street Jour­nal, "Like shale gas was a game changer in the U.S., Amer­i­can gas ex­ports could be a game changer for Europe."

In Asia, we see sim­i­lar ben­e­fits. The In­ter­na­tional En­ergy Agency projects that global de­mand for nat­u­ral gas will con­tinue to grow 2 per­cent an­nu­ally un­til 2020, with more than 50 per­cent of in­cre­men­tal growth com­ing from Asia.

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