The dynamics of United States’ oil dependency have been turned on their head after recent estimates of abundant Natural Gas reserves. Now, the United States is in a position to not only produce our own energy, but possibly export it as well. The question is: Should we?
This week, we’re talking to Dave Schryver, Executive Vice President of American Public Gas Association, and George Biltz, Corporate Vice President of Energy and Climate Change for Dow Chemical – about the changing energy landscape specifically in terms of liquified natural gas.
Dave Schryver recalls a few years back, during the Bush Administration that plans for energy infrastructure included import facilities along both the east and west coasts to receive liquified natural gas, assuming the U.S. would need imported LNG to meet our future demand. Now with shale gas production, that has all changed. Currently, natural gas production is going strong in New York State, Pennsylvania and Ohio, to name a few, and has increased our natural gas portfolio to the degree that there is no end in sight.
The natural gas supply for the U.S. has never been stronger. That makes it tempting to export to Asia and Europe, where prices for natural gas are significantly higher than in the United States. Certainly tempting from a profit perspective, but there is more to consider. Schryver tells us that the APGA opposes exporting LNG for many reasons; including our energy security, energy independence, our energy demand and supply, and the impact that exports would have on domestic pricing.
“The ultimate price impact of exporting LNG will be determined by a number of factors. First and foremost is how much LNG will actually be exported. Nobody knows the answer to that question. What we do know is now there are applications on the books to export 45 percent of what we use on a daily basis and certainly if that amount is exported, it will have a significant impact on prices.”, says Schryver
The export applications so far, propose exporting 29 billion cubic feet per day. By comparison, in the U.S., we use 67 billion cubic feet per day. Schryver suggests that we as a nation, focus on providing our own energy, and developing the technology to thrive on natural gas. “With our current natural gas supply picture, we have a unique opportunity to put more natural gas vehicles on the road and reduce that dependence on foreign oil, but if that’s going to occur we need our natural gas supply to remain plentiful and prices to remain affordable and certainly LNG export threatens that. ” Schyver said.
George Biltz, continues the conversation by discussing the advantages of driving a manufacturing renaissance in the United States.
Abundant energy resources translates to increased manufacturing. Now companies are more easily convinced to build plants, with more than 100 billion dollars in new investments announced for plants nationally.
“It was a big shift in 2000- 2010 to have gas go from $2.50 for a million BTUs up into $10.00 – $14.00, some people paying even more than that range. That chased a lot of manufacturing out of the United States. During that ten year period we lost about six million jobs in manufacturing in the US, not all due to gas, but gas was certainly a major piece of those decisions.”, says Biltz.
Now, there’s a massive reversal. Last year, Dow rebuilt one of their major facilities that had to shut down in 2008-2009. It started production again in December, bringing more jobs and business back into the United States.
These kinds of changes have a significant multiplier effect. Biltz says Dow has determined that every job they create inside their fences, yields 8 more jobs outside, in terms of logistics, accounting, banking services and beyond.
“Down the value chain, the GDP impact is somewhere between 5 and 20 times, when you take a cubic foot of gas and run it through the economy as opposed to just burning it.” Biltz said.
The abundance of natural gas, could potentially translate to 5 million new jobs in the United States, from petrol chemicals, steel, aluminum — up to nine industries immediately impacted in the future.
Listen to the entire Connect & Collaborate program this Saturday at 10:00 AM on KNUS 710 – or download our podcast – you’ll find it at the top of this article.