A U.S. Government-sponsored report offered a full-throated endorsement on Wednesday for expanding liquefied natural gas exports, saying that shipping the nation's surplus gas abroad would clearly help the overall economy even though it will raise energy prices.
The report, commissioned by the Energy Department, is expected to help shape the Obama administration's response to more than a dozen proposed export projects that have been put on hold over the past year, as a surge in shale gas production upended the market and depressed domestic prices.
NERA Economic Consulting said it examined the impact of LNG exports in 63 scenarios and found exports to a net benefit for the economy under each of the conditions.
"Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased," said the study.
However it also warned that the benefits would not be shared evenly. Although owners of natural gas resources and many downstream investors will benefit from the export boom, regular wage-earners will be hit with higher home heating costs, the report said.
Over the past year LNG exports have become an increasingly contentious issue, pitting manufacturers – concerned that exports will raise prices – against gas drillers who argue that exports are necessary to keep production going strongly.
The Obama administration has wrestled with how to walk the balance, deferring a decision on whether to permit any additional projects pending the NERA report.
The battle will drag into next year, as the Department of Energy sets aside more than two months to gather public input on the report and opponents line up to highlight its flaws – including the fact that the shale gas revolution is moving too quickly to anticipate its full effects. Dow Chemical, one of several major industrial firms that is expanding its U.S. operations in hopes of taking advantage of cheap energy supplies, said the report was based on "outdated and therefore inaccurate estimates" of future gas demand, spokeswoman Nancy Lamb said in an e-mailed statement.
REVIEW TO CONTINUE
Despite the high profile nature of the economic report, the administration has stressed it will be only one of the factors the department considers as it moves ahead with its review process.
Various groups, from manufacturers to environmentalists, have attempted to make their views heard.
The report comes as the Energy Information Administration projected Wednesday that U.S. natural gas production would grow