Post on 26-Dec-2015
transcript
U.S. Liquefied Natural Gas Exports:
America’s Opportunity and Advantage
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2002 to 2012 A Decade Makes a Difference
Then Now
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60-year supply and falling
Shale known but uneconomic to develop
Underground gas storage primarily traditional reservoir, operationally not very flexible
Pipeline capacity growing incrementally
Rising prices with several spikes
100+ years supply and growing
Flourishing production, vast shale resources now accessible
Storage boom with more flexible salt-cavern facilities and additional market area storage
16,000+ miles of interstate pipeline added since 2000
Plentiful supplies moderate prices and provide supply diversity
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Horizontal Drilling = Access + Lower Impact
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Hydraulic Fracturing = Access + Lower Impact
Industry is Committed to Doing it Right: Safety and Environmental Protections Are Keys to Success
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An Abundant Resource Endowment
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Energy Revolution = Abundant Resources
2003: U.S. Natural Gas = 1,100 Tcf
2011: U.S. Natural Gas = 1,900 – 3,500 Tcf
[U.S. Consumes About 24 Tcf Per Year]
U.S. Natural Gas Marketed Production
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40
45
50
55
60
65
70
75
Av
era
ge
Bcfd
Top Natural Gas Producing Countries, 2011
U.S.
Russian
Federati
on
Canad
aIra
nQata
rChina
Norway
Saudi A
rabia
Algeria
Indonesia0
10
20
30
40
50
60
70
Bcfd
Source: BP Statistical Review of World Energy June 2012
Top Gas Exporting Countries, 2011
Russia
Qatar
Norway
Canad
a
Algeria
Other A
frica
Indonesia
Netherla
nds
Australi
a
Trinidad
& Tobag
o02468
101214161820
Bcfd
Source: Deloitte, Exporting the American Renaissance; Global Impacts of LNG Exports from the united States, Jan. 2013
What is LNG?
• LNG is clean, odorless, noncorrosive, nontoxic liquid
• LNG is formed when natural gas is cooled to -260 F
• In liquid state, the volume shrinks by about 600 times, making it easy to store and transport via vessel
• LNG has been safely handled for decades• LNG is not stored under pressure and is not
flammable in its liquid state• LNG vessels have made more than 135,000
voyages without major accidents or safety problems
• LNG is highly regulated: FERC, DOT, USCG, DHS…
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What is the issue?Various applications to export LNG are pending before DOE
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What is the solution?DOE should confirm that LNG exports are in the public interest and expeditiously approve pending LNG export applications
In 1938, Congress passed the Natural Gas Act, which established a rebuttable presumption that all natural gas exports, including LNG, are in the public interest and shall be permitted. In the Energy Policy Act of 2005, Congress revisited the issue of LNG imports and exports – and confirmed that LNG exports are presumed to be in the public interest.
LNG exports to countries with which the United States has signed a Free Trade Agreement are automatically deemed to be in the public interest and applications “shall be granted without modification or delay.”
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Estimates of U.S. Total Natural Gas Resource Base vs Total U.S. LNG
Exports and Consumption
*20 years of 6 bcf/d of LNG exports phased in between 2015 and 2020 reaching 6 bcf/d in 2020 and thereafter.Source: EIA AEO 2013ER
567 Tcf
2,303 Tcf (EIA)
3,505 Tcf (ICF)
41 Tcf
Current U.S.Natural Gas
Resource BaseEstimates
LNG Exports (2015 to 2035)
Consumption (2015 to 2035)
The U.S. will only export 1 to 2% of the total resource base
Exports will:• Create and support thousands of jobs all over the
U.S. • Each additional Bcf of shale gas production
supports 32,000 total jobs throughout the economy (IHS Global Insight, 2010)
• Generate billions of dollars in government revenues
• Reduce our trade deficit • Enhance U.S. energy security and provide support
to strategic allies in Europe and Asia
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The Benefits of Exporting LNG
The Benefits of Exporting LNG
Exports will:• Increase domestic production of natural gas
An additional 2 Tcf of U.S. NG production predicted if exports are fully permitted (EIA, 2012).
• Increase domestic production of associated natural gas liquids (NGLs), putting downward pressure on prices of chemical manufacturing feedstocks including ethane.
Exports will not:• Stymie the manufacturing sector. This is not a zero
sum game. In fact, as NG is exported, more NG will be produced, enhancing the manufacturing revolution, not hindering it.
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Competition to Export is Steep
• Not every project currently proposed in the U.S. will be built. In fact, when the U.S. was looking to import LNG,
only 7 of the 25 projects proposed were built.• Siting and construction of an LNG export facility is
capital intensive and requires extensive financing.A single project can cost $5 - $45 billion
• The U.S. is competing with other countries, some of which have already started building export facilities.
• Timing is everything – the longer the U.S. waits, the less competitive our projects will be in the global market.
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Competition for Worldwide LNG Demand will be Steep
The proposed U.S. capacity is greater than projected global demand
* ICF estimate for year end 2011.**FTA Applications to DOE as of Nov. 29, 2012. ***Dec 2012 ICF estimate based on current worldwide project list.~Poten, BG Group, Credit Suisse, Facts Global
Oil & Gas OperatorsOil & Gas Service
CompaniesLaw FirmsEngineering FirmsConstruction
ContractorsElectrical ContractorsLand Service ProvidersPipeline Contractors
LaborersTruck DriversEquipment OperatorsWeldersSurveyorsLawyersAccountantsEngineersEnvironmental ScientistsArcheologistsBotanistsElectriciansMechanics
Direct EmployersDirect or Contracted Jobs
Economic Impacts: Jobs, Jobs, Jobs
NERA Study: Macroeconomic Impacts of LNG from the United States (December
2012)“Across all scenarios, the U.S. [is] projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increase[] as the level of LNG exports increase[s]. In particular, scenarios with unlimited exports always ha[ve] higher net economic benefits than corresponding cases with limited exports.” (page 1)
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NERA Study: Macroeconomic Impacts of LNG from the United States (December
2012)“Natural gas price changes attributable to LNG
exports remain in a relatively narrow range across the entire range of scenarios.” (page 2)
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NERA Study is Available for Public Comment (77 Federal Register 238,
December 11, 2012)• DOE Initial Comment Period: January 24,
2013• DOE Reply Comment Period: February 25,
2013• Comments are intended to help inform DOE
in its public interest determinations
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