Economic_Boost_Feature_03-2014

“The greater the level of exports, the greater the benefits.”

At the Platts conference I mentioned in my last post, an Obama administration official was pressed to explain why the Energy Department is taking so long to process LNG export applications.

His answer, according to RigZone, was to say that “DOE’s job was to make ‘good policy decisions’ that would unlock opportunities beneficial for the U.S. economy and for U.S.-based businesses.”

Economic_Boost_03-2014The more than two dozen proposed LNG export projects that are languishing in the queue show American companies to be perfectly capable of identifying plenty of such beneficial opportunities themselves.

DOE can unlock those opportunities by removing the arbitrary barriers to trade the agency has established with its go-slow approach to processing applications.

There is solid evidence those opportunities would benefit the American economy. The economic consultancy NERA has updated the study on LNG exports it did for the Department of Energy in 2012. The recent update looked at the cumulative impacts of LNG exports up to the maximum amounts the market would allow under any number of market scenarios.

One sentence in particular from NERA’s new report jumps out: “LNG exports provide net economic benefits in all the scenarios investigated, and the greater the level of exports, the greater the benefits.”

If the administration truly wants to make “good policy decisions,” the pathway forward is remarkably clear. It should recognize the time-sensitive window of opportunity for America, admit that government delays are not “beneficial to the U.S. economy and for U.S.-based businesses,” and start moving forward on government approvals at all levels to help American companies invest and innovate before it is too late.


4 Comments

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  1. Tom Morgan says:

    Ken, I absolutely support ExxonMobil’s position supporting removal of barriers to hydrocarbon exports. Exporting more hydrocarbons from North America would benefit the world. I posted a blog today on this topic.

    Thank you, Tom Morgan, Drillinginfo, Austin, Texas

    http://info.drillinginfo.com/us-crude-oil-can-save-the-ukraine-from-russian-aggression/

  2. Charles Scouten says:

    Please pardon my ignorance. I can easily see how exporting US crude oil, LNG, LPG or condensate can generate profits for both the exporter and the transporter. Where I come up short is understanding how exporting all this fossil energy resource is good for this country – for the people of the of the country as a whole. Or maybe I missed Exxon’s plan to replace our naturally-produced fossil fuel resources they export, so the United States is not worse off in the long run?

    • Ken Cohen says:

      Mr. Scouten – Government policies that allow for exports of oil and natural gas would benefit the country as a whole in the same way that increased trade in any domestically produced goods – whether food or stereos or clothing – is beneficial. Producing those goods – in our case, oil and natural gas – creates jobs, boosts economic activity, and increases government revenues. That’s not just profits for the exporter and transporter, as you put it, but increased economic activity throughout the economy.

      Today the most dynamic economic activity in the country is focused on the significantly increasing oil and gas production that has been taking place since 2008. And we are seeing that dynamism not just in energy-producing states like Texas and North Dakota, but in non-producing regions like New Jersey and Wisconsin, which help supply equipment, material, and expertise that support oil and gas production.

      Last year I noted a study by IHS Consulting that concluded the benefits of unconventional oil and gas development are being felt even in those states without oil and/or gas production. As I wrote at the time, “There are 32 states in the lower 48 without unconventional energy production, yet according to IHS ‘a significant portion of the economic activity is located in [these] ‘non-producing states’.”

      Most analyses of oil and gas exports – including studies conducted by NERA Economic Consulting, Resources for the Future, ICF International, Rice University’s Baker Institute, and others – predict that they would help boost domestic production even further, creating even more jobs and economic activity. It’s not a zero-sum game.

  3. jerry flores says:

    In this post I would suggest one small change. Everywhere the term American economy is used, substitute with Exxon/Mobil

  4. Tom Morgan says:

    Ken, I absolutely support ExxonMobil’s position supporting removal of barriers to hydrocarbon exports. Exporting more hydrocarbons from North America would benefit the world. I posted a blog today on this topic.

    Thank you, Tom Morgan, Drillinginfo, Austin, Texas

    http://info.drillinginfo.com/us-crude-oil-can-save-the-ukraine-from-russian-aggression/

  5. Charles Scouten says:

    Please pardon my ignorance. I can easily see how exporting US crude oil, LNG, LPG or condensate can generate profits for both the exporter and the transporter. Where I come up short is understanding how exporting all this fossil energy resource is good for this country – for the people of the of the country as a whole. Or maybe I missed Exxon’s plan to replace our naturally-produced fossil fuel resources they export, so the United States is not worse off in the long run?

    • Ken Cohen says:

      Mr. Scouten – Government policies that allow for exports of oil and natural gas would benefit the country as a whole in the same way that increased trade in any domestically produced goods – whether food or stereos or clothing – is beneficial. Producing those goods – in our case, oil and natural gas – creates jobs, boosts economic activity, and increases government revenues. That’s not just profits for the exporter and transporter, as you put it, but increased economic activity throughout the economy.

      Today the most dynamic economic activity in the country is focused on the significantly increasing oil and gas production that has been taking place since 2008. And we are seeing that dynamism not just in energy-producing states like Texas and North Dakota, but in non-producing regions like New Jersey and Wisconsin, which help supply equipment, material, and expertise that support oil and gas production.

      Last year I noted a study by IHS Consulting that concluded the benefits of unconventional oil and gas development are being felt even in those states without oil and/or gas production. As I wrote at the time, “There are 32 states in the lower 48 without unconventional energy production, yet according to IHS ‘a significant portion of the economic activity is located in [these] ‘non-producing states’.”

      Most analyses of oil and gas exports – including studies conducted by NERA Economic Consulting, Resources for the Future, ICF International, Rice University’s Baker Institute, and others – predict that they would help boost domestic production even further, creating even more jobs and economic activity. It’s not a zero-sum game.

  6. jerry flores says:

    In this post I would suggest one small change. Everywhere the term American economy is used, substitute with Exxon/Mobil