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States Without Gas Production Will Still Reap Billions, Report Finds

Liquefied natural gas (LNG) exports are "one of the most promising economic opportunities of the shale revolution," and could contribute billions to state economies, regardless if they are gas producers or not, according to a report commissioned by the American Petroleum Institute (API).

The state-by-state, 71-page study conducted by ICF International follows a national level study on LNG exports released in May (see Daily GPI, May 16). In its latest report, ICF contends that gas-producing states such as Texas, Louisiana and Pennsylvania could see the largest economic gains, ranging from $10 billion to $31 billion, depending on the level of LNG exports, by the year 2035.

But ICF said non-producing states, such as California, Illinois and New York, could see gains ranging from $2.6 billion to $5 billion by 2035 -- again, depending on the level of LNG exports -- because they have large manufacturing bases.

"LNG exports have a net positive, or negligible, impact across all states," ICF said. "In general, the largest impacts are found in states with gas, oil, and NGL [natural gas liquids] production, LNG production, ethylene manufacturing and industries that supply the oil and gas and petrochemical industries.

"However, consumer spending activity generated by these gas-and petrochemical-related activities contributes significant interstate activity, providing economic and employment gains to states with little to no gas or petrochemical-related activity."

The ICF report, like its predecessor, projected LNG export scenarios of 4, 8 and 16 Bcf/d by 2035.

ICF said that nationwide, LNG exports are expected to create a net increase of 665,000 jobs by 2035, with gas-producing states expected to see the largest gains. Researchers predicted that by that year, Pennsylvania, Louisiana and Texas could see gains of about 59,000, 74,000 and 156,000 jobs, respectively, under the high LNG export scenario.

Meanwhile, manufacturing-heavy states such as Illinois, New York and California were forecast to see job gains of 17,000, 25,000 and 39,000, respectively, under the high export scenario.

"America is in a global race to build this infrastructure and secure a competitive position in the international market," Kyle Isakower, API's vice president for regulatory and economic policy, said Thursday. "Fortunately, U.S. workers are in a very good position to win that race.

"But it is critical that the Department of Energy [DOE] address the backlog of 22 applications to sell LNG to countries that do not have free trade agreements with the United States. Each of these terminals could create thousands of jobs, grow the economy, and significantly increase government revenues."

Isakower said more than 60 international LNG export projects are currently planned or under construction.

DOE has approved 27 applications to export LNG to countries that have a free trade agreement (FTA) with the United States, the most recent being Venture Global LNG LLC's application to export 0.67 Bcf/d from a proposed terminal in Cameron Parish, LA (see Daily GPI, Oct. 22).

The agency has also approved five permits -- to Sabine Pass Liquefaction LLC, Freeport LNG Expansion LP/FLNG Liquefaction LLC, Lake Charles Exports LLC and Dominion Cove Point LNG LP -- for LNG exports to non-FTA countries. Freeport holds two permits, the latest of which was issued on Friday for an additional 0.4 Bcf/d. Collectively, all five permits allow up to 6.77 Bcf/d of exports (see Daily GPI, Sept. 12).

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