By Laura Barron-Lopez - 10/29/14 05:24 PM EDT
Increased liquefied natural gas (LNG) exports would spur production and investment, “outweighing” a modest price increase for consumers, according to a new study.
The Energy Department’s stat shop said on Wednesday that more natural gas shipments overseas would result in “economic gains,” but at a cost to consumers.
But, gas markets in the U.S. would “balance in response to increased LNG exports” by increasing production.
In turn, “increased energy production spurs investment, which more than offsets the adverse impact of somewhat higher energy prices,” the report states.
The EIA is currently working on a number of studies related to natural gas and crude oil exports. Wednesday’s report is in response to a request from the Energy Department’s Office of Fossil Energy in May.
The department asked the independent stat shop to consider a number of scenarios of increased natural gas exports and how they could impact energy markets, specifically consumption, production and prices.
The EIA also found that increased exports would cause energy use to go up, and increase carbon emissions by .1-.6 percent from 2015 to 2040.
The stat shop also notes that a “slower, more realistic ramp-up” to increased exports could “slightly lower price impacts.”
Erica Bowman, vice president of research and policy with America’s Natural Gas Alliance, said the EIA report backed up the “many benefits that our nation’s natural gas resource offers.”
“Abundant supplies of natural gas are creating clean and affordable energy,” Bowman said. “Even under the most aggressive export scenarios the overwhelming majority of natural gas used to fill LNG export demand originates from additional production, not from existing domestic applications. In fact, domestic manufacturing consumption is projected to grow from current levels under all LNG export scenarios.”
Sen. Ed MarkeyEd MarkeyTim Kaine backs call to boost funding for Israeli missile defense FCC chief pushes phone companies to offer free robocall blocking Markey floats bill bringing internet to developing world MORE’s (D-Mass.) office took issue with the report, arguing the EIA didn’t make it clear the potential impacts on consumers.
Markey’s office released a breakdown of the report Wednesday, claiming gas prices would more than triple by 2039 under a high exports scenario used by the EIA.
The office also takes issue with the EIA’s price calculations, which it says cover averages over large periods of time rather than year-by-year, making it difficult to capture peak increases for consumers and businesses at home.
Markey’s office also points out that an increase in gas prices could force utilities to switch to coal, which it argues could undermine the president’s climate plan.