The future export of liquefied natural gas (LNG) is expected to lead to more job gains, more growth in manufacturing, and more robust economic activity in all states nationwide, including those not directly involved in the nation’s recent shale boom, a new report reveals.
According to a state-by-state analysis by ICF International on behalf of the American Petroleum Institute (API), an oil and gas industry group, LNG exports could contribute between $10 billion and $31 billion per state to the economies of natural gas-producing states by 2035.
These states include Texas, Louisiana, and Pennsylvania, just to name a few, Kyle Isakower, API group vice president for policy and economic analysis, said in a recent conference call with reporters from a variety of news organizations.
That was not particularly surprising news to anyone.
But what did raise eyebrows was how the study claimed non-natural gas-producing states – those not actively involved in hydraulic fracturing, or fracking – will also benefit from LNG exports. Isakower, citing the report, said these states, many of which have large manufacturing sectors, is expected to see economic gains as high as $2.6 billion to $5.0 billion per state by 2035.
A few examples of these types of states, he said, include New York, California, Ohio, and Illinois.
That, in turn, will lead to greater economic prosperity for states in both categories, he explained. Natural gas-producing states could see employment gains between 60,000 to 155,000 jobs in 2035 thanks to LNG exports. Non-natural states with strong manufacturing sectors will see employment gains upwards of 30,000 to 38,000 in the same time span, thanks largely to upticks in demand for steel, cement, equipment, and other related goods.
“The export of liquefied natural gas … represents one of the most promising economic opportunities of the shale revolution,” Isakower said. “These exports will significantly reduce our trade deficit, increase government revenues, grow the economy, and support millions of U.S. jobs in engineering, manufacturing, construction, and facility operations.”
In Louisiana, for instance, LNG exports could add as much as 4 percent to the state’s employment relative to 2012 levels. And based on last year’s employment figures, employment gains stemming from LNG exports in Wyoming could exceed 6 percent in 2035.
Isakower said the states that will benefit the most from LNG exports in terms of jobs and state income are, in order: Texas, Louisiana, Pennsylvania, Alaska, Ohio, California, New York, Wyoming, Arkansas, and Illinois.
And there’s more: According to the report, more than half of all states countrywide could see over $1 billion in state income gains from LNG exports by 2035 and at least 6,000 direct or indirect net jobs.
“Even in states that don’t benefit directly from LNG exports, the overall boost to broader growth – particularly in manufacturing – is anticipated to counterbalance or exceed the relatively small expected impact of slightly higher natural gas prices estimated by ICF,” Isakower said.
IMPORTANCE OF LNG EXPORT TERMINALS
API also supports further development and construction of more LNG export terminals, Isakower said. “We also see significant job growth in states where LNG export terminals could be built,” he adds.
This is why API officials say it’s critical that the U.S. Department of Energy address the backlog of 22 applications to sell LNG to countries that do not have free trade agreements with the U.S.
“Each of these terminals could create thousands of jobs, grow the economy, and significantly increase government revenues,” Isakower said.
An ideal example, he said, is Alaska. In a high-export scenario, in which an Alaska–based terminal is built, Isakower said the state “can expect to see up to a $10 billion addition to state income” and more than 36,000 jobs added by 2035, all thanks to LNG exports.
“However, even in a modest export scenario, new terminals elsewhere are expected to create ample job opportunities,” he said. “That is because each export terminal represents a multi-billion dollar investment in infrastructure with long-term investments in labor and materials.”
He adds that the U.S. is in the midst of a “global race to build this infrastructure and secure a competitive position in the international market.” More than 60 international LNG export projects are currently planned or under construction around the world, he adds, and the nations that act the quickest to attract these investments will reap the rewards.
“Fortunately, U.S. workers are in a very good position to win the race,” he said. “That is because the long-term impact of LNG exports will mean stronger, more reliable U.S. production of fuel for both domestic consumption and export.”
About the American Petroleum Institute
API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 550 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation’s energy. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy, delivers $85 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.