Energy

Study: Selling US Natural Gas Abroad Could Create 136,000 Jobs

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Andrew Follett Energy and Science Reporter

Selling Texas’ liquefied natural gas (LNG) to other countries will create more than 136,000 jobs nationwide and generate $145 billion in economic activity, according to a new report published Monday.

The pro-industry group North Texans for Natural Gas commissioned the report, which touts the economic benefits of approving seven LNG export facilities in the state. Roughly 70,000 of these jobs will be created in Texas, and the state government will receive more than $20 billion in tax revenue.

“We have the opportunity to create more than 136,000 jobs nationwide and generate more than $20 billion in new state tax revenue with these facilities,” Steve Everley, a spokesman for North Texas for Natural Gas, told The Daily Caller News Foundation. “LNG exports truly are a win-win-win for Texas, the United States and our allies around the world. If we want to make America great again, we need to encourage LNG exports from Texas.”

The average salary for a permanent job in one of these facilities is expected to be $70,000 per year, with total compensation of $110,000. This is considerably well above the 2015 per capita income of $26,826 in the county the facility will be built in.

The Department of Energy gave the first of these LNG export facilities a license in late April. The export facility will create an estimated 45,000 direct and indirect jobs over the next five years, according to Golden Pass Products, the company behind the project. Golden Pass estimates the construction operation of the facility will generate up to $3.6 billion in federal and state tax revenues.

Exporting LNG can be done at minimal cost, and it would lead to huge economic benefits, according to a study the Department of Energy published in December 2015. The report also found exporting American LNG would provide huge environmental benefits as it would help “address a variety of environmental concerns in the power‐generation sector.”

“Texas is well-known as a leader in energy, and these LNG projects will only enhance our state’s position as a global oil and gas powerhouse,” Everley said. “LNG exports from Texas will allow our trading partners to meet their growing energy needs from a safer and more reliable source, while giving us more energy security, more jobs, and more tax revenue to fund schools and other public services.”

Selling natural gas abroad could also be a big geopolitical win for the U.S.

 “The geopolitical role of energy for the United States depends not just on proven reserves but the modern infrastructure – pipelines, ports, and liquefaction facilities – necessary to make our energy competitive in global markets,” Richard Kauzlarich, former U.S. ambassador to the energy-rich nation of Azerbaijan, as well as to Bosnia, told TheDCNF. “This will require new infrastructure such as that described in the recent Texans for Natural Gas report as well as east coast facilities like Cove Point, Md.”

LNG from the Texas plants and other proposed facilities could be exported to Europe where it could help U.S. policymakers. Exporting LNG to Eastern Europe has the potential to reduce Russia’s ability to use state-controlled companies, such as Gazprom, as a political weapon against America’s allies. Russia has used interruptions in the natural gas supply in 2006, 2009 and 2015 to put political pressure on Eastern European countries like Ukraine, Poland and the Baltic states.

About half of Europe’s imported natural gas comes from Russia. This dependence prevented many of America’s European allies from responding more forcefully to Russian actions in Syria and Ukraine.

Luckily for these countries, new supplies of natural gas from the U.S. and Canada allowed them to reduce their dependence on Russian gas and switch suppliers. North American LNG exports could compete against Russian gas, forcing the country to rethink how it treats customers. Increased competition for natural gas in the world market has already reduced Russia’s bargaining power and export revenue.

“The consumers for this LNG will depend on its price being competitive with traditional pipeline gas (from Russia) in Europe, and with other LNG exporters in the Persian Gulf and Australia,” Kauzlarich said. “The diversity of export locations in the U.S., and the expanded Panama Canal, give U.S. LNG exporters global flexibility if the infrastructure can be completed in a timely fashion with a minimum of bureaucratic red tape.”

Exporting natural gas is likely to be a growth industry, as global demand for natural gas is expected to be 50 percent higher by 2035 than it is now, according to the International Energy Agency. Demand for imports of LNG increased 27 percent in the United Kingdom last year alone.

The explosion of natural gas production in the U.S. and Canada is entirely due to the development of hydraulic fracturing, or fracking. Fracking allowed America to oust Russia as the world’s largest producer of natural gas in 2015. This is an enormous change. Only a decade ago energy analysts believed the U.S. was destined to become one of the world’s largest LNG importers because natural gas production appeared to be in permanent decline.

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