If/when the United States begins exporting liquefied natural gas (LNG), it could take decades for the number of outbound cargoes to equal the number of press releases, studies and policy briefs generated by either side of the export debate. Besides powering a manufacturing/petrochemical renaissance, North American shale gas is fueling a bonfire of inanities, at least some would say.

Keeping U.S. natural gas at home would yield more economic bang per molecule than liquefying and exporting it, according to a study conducted by Charles River Associates, paid for by The Dow Chemical Co. and released last week. Dow has lobbied hard against exporting LNG, arguing gas is better used at home as fuel and feedstock).

Most noteworthy among the studies that are supportive of LNG exports is one conducted by NERA Economic Consulting, paid for by the U.S. Department of Energy (DOE) and released late last year (see NGI, Dec. 10, 2012). It essentially said exports would be supportive of the U.S. economy in just about any amount, the more the better.

According to U.S. Energy Information Administration (EIA) data and NGI’s Shale Daily calculations, the onset of domestic shale development has allowed U.S. dry gas production to grow at a faster rate than world gas consumption since 2006. U.S. dry gas production in 2006 (18.5 Tcf) equaled 18% of the world’s gas consumption that year (102.7 Tcf). In 2011, the last year of available EIA data, U.S. dry gas production (22.9 Tcf) equaled 19.3% of the world’s gas consumption that year (119 Tcf).

The Dow-funded study, “US Manufacturing and LNG Exports: Economic Contributions to the US Economy and Impacts on US Natural Gas Prices,” focused mainly on the anticipated growth in gas-intensive manufacturing and how it may contribute to U.S. gross domestic product (GDP), employment and the trade balance.

Charles River said its research found that U.S. manufacturing contributes more to GDP, employment, and to the reduction of the trade deficit as compared to LNG exports at a commensurate level of natural gas use. It also found that a global LNG supply shortage of 20-35 Bcf/d by 2030 is projected, and U.S. exports would likely play a major role in filling the gap, which in turn could lead to a tripling of natural gas prices from current levels by 2030. In addition, the research found that manufacturing is highly sensitive to natural gas prices, and a significant portion of the U.S. manufacturing sector is exposed to impacts from projected increased natural gas prices. In addition, current expectations for a low-cost, gas-driven electricity economy and significant deployment of natural gas vehicles could be foregone due to LNG exports.

The pro-export camp didn’t take that lying down. NERA quickly produced a “Q&A” sheet on its export study that, among other things, asked: “Why does the NERA study find negligible impacts of higher natural gas costs on manufacturing as a whole?”

And then answered: “Economists who analyze how changes in energy costs affect energy-intensive, trade-exposed industries have reached a consensus that only very narrowly-defined segments of manufacturing are at risk from higher energy costs. These sectors have relatively small employment and value added compared to manufacturing as a whole, so that even large impacts on these narrow segments translate into negligible impacts on manufacturing and the U.S. economy as a whole.” In other words, only the baby oxen would be gored by exports.

Separately, the Center for Liquefied Natural Gas (CLNG) sent out a dozen-page email enumerating the “errors” of the Dow-commissioned study it said were “too large to ignore.” It also offered reassurance that there will be enough gas for everyone, even with exports. “Producers can develop more reserves in anticipation of demand growth, such as LNG exports,” CLNG said. “There will be ample notice and time in advance of the exports to make supplies available.”

Economists posit that having more diversified demand will lead to a more stable market that will lessen the risk and encourage producers to invest in developing more supplies, thereby helping to maintain stable prices.

Perhaps sensing an opportunity while the capitalists fought, the Sierra Club, The Wilderness Society, Earthjustice and the League of Conservation Voters appealed to President Obama for a “timeout” on the consideration of export approvals. Like Dow, they slammed the NERA study, not because they fear for the chemical industry, but because it provided another chance to blast shale and hydraulic fracturing.

The environmental groups also called for the development of a full environmental impact statement for LNG exports, including the unconventional natural gas production it would require. The increased use of hydraulic fracturing needed for gas exports “would create significant new air and water pollution risks and new waste management challenges…and could worsen climate change by increasing national methane emissions,” they said. But like most everything else in the LNG debate, that’s been said before, too (see NGI, Nov. 26, 2012).

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