Watch: This Is Why Biden’s $2 Trillion Infrastructure Plan Will Fail
In the United States, we have a problem that’s so BIG and obvious that even Elon Musk can’t see it. Our highways are broken, our streets are clogged with traffic,...
I was at the Rayburn Building on Capitol Hill today attending a brief given by ICF International’s Harry Vidas in front of members of the Congressional LNG Export Working Group, consisting of Congressman Tim Ryan (D-OH), Congressman Bill Johnson (R-OH), and Congressman James Lankford (R-OK).
Much of the information Mr. Vidas discussed fell in line with what has been mentioned at other events I’ve attended this year, further highlighting the fact that exports of LNG from the US will have very positive effect on both the U.S. job market and the U.S. Gross Domestic Product (GDP)
In the worst case scenario, where up to 4 Bcfd (30 mtpa) is exported, ICF predicts between 73k and 145k new jobs will created and an increase in GDP of between $15 and $22.8 billion. Henry Hub price would hover around $5.03.
In the median case modeled by ICF, where up to 8 Bcfd (60 mtpa) is exported, between 113k and 230k new jobs will likely be created and GDP would increase by between $25 and $37 billion.
In their highest export prediction of up to 16 Bcfd (or 120 mtpa), between 220k and 452k new jobs will be created and GDP will increase between $50-$74 billion. At that output, ICF predicted Henry Hub prices would be around $5.73. To put that in perspective, that output is nearly double what Qatar is producing currently.
Between 2011 and 2025, the forecasted growth of natural gas demand, according to ICF’s study, exceeds 32 Bcfd.
ICF notes: “These LNG studies assessed assume between 39% to half of incremental growth in LNG demand will be in Asia, while Europe will make up nearly a quarter. The remaining regions (i.e. the Middle East and the Americas) will make up another 29%-37%”
I posed the question to the panel, “Which of these scenarios is the one most likely to occur?”
Congressman Lankford, Chairman of the Subcommittee on Energy Policy answered noting that LNG exports are supported by the White House and very few issues stand in the way before a green light is given by the Department of Energy. He appeared firmly in favor of a “letting the market decide” what the right amount of exports should be, which will likely put the number to be between 8 and 16 Bcfd. Considering the huge financial investment needed for LNG projects, Lankford notes that the project financiers “will not invest in LNG export developments without long term contracts in hand.”
Congressman Lankford further noted that LNG production and infrastructure developments in China and elsewhere will further influence the development of U.S. LNG export projects in the coming years, but was firm in his stance that it was not the government’s position to decide how much LNG should be exported.
With the support of Congress, and an eager industry, I bet we’re going to see some big projects announced in the coming weeks.
Join the 67,637 members that receive our newsletter.
Have a news tip? Let us know.