A recent report by ICF International, a leading public and private sector consultant, adds a critical piece to the national debate over whether to restrict or allow exports of liquefied natural gas (LNG).
The study, which was commissioned by the American Petroleum Institute (API), projects the economic benefits that would be felt state-by-state if the federal government were to follow the advice of numerous experts and economists and break the logjam on LNG exports.
ICF found that virtually every state in the Union would benefit, with many experiencing profound economic growth and job gains. (Enlarge the nearby API fact sheet on the top 25 states for both categories.)
If exports are permitted to proceed, here is what ICF predicts we could see in 2035:
- Natural-gas producing states such as Alaska, Louisiana, Pennsylvania, and Texas with economic gains ranging from $10 billion to $31 billion
- Non-producing states boasting large manufacturing bases – such as California, Illinois, and New York – with state income gains of $2.6 billion to $5 billion
- An employment impact of up to 665,000 jobs nationwide, with all states expected to see positive jobs impacts from LNG exports
- Increased availability of ethane from natural gas for the petrochemical industry
The study emphasizes that the higher the level of exports, the greater the economic benefits would be.
That flies in the face of arguments made by a small, protectionist coalition of companies calling itself America’s Energy Advantage. The group wants Washington to artificially restrict exports of LNG, claiming that will protect America’s competitive advantage by keeping natural gas supplies home for domestic uses.
The ICF report makes clear the group’s argument has it backward.
Restricting exports of natural gas might serve the short-term narrow interests of a handful of American-based manufacturers that use natural gas as a feedstock – though, as the last point I highlighted above suggests, it probably wouldn’t.
Nevertheless, it is incontrovertibly true that restricting exports would fail to serve the broader national interest.
That’s where we differ from the companies in America’s Energy Advantage. They think it’s perfectly acceptable for government to make policies that serve their narrow interests. We don’t. It’s bad policy for the government to try to pick winners and losers. And it’s bad economics.