CRA Releases US Manufacturing and LNG Exports Study

Charles River Associates announced that consultants in the firm’s Energy Practice released the report “US Manufacturing and LNG Exports: Economic Contributions to the US Economy and Impacts on US Natural Gas Prices.” CRA was retained by The Dow Chemical Company to examine the economic trade-offs between LNG exports and manufacturing in the US economy.

The report focuses primarily on the anticipated growth in the gas-intensive manufacturing industry and how it may contribute to GDP, employment and the trade balance relative to LNG exports. The report finds the following:

• US manufacturing contributes more to GDP, employment, and to the reduction of the trade deficit as compared to LNG exports at a commensurate level of natural gas use.
• A global LNG supply shortage of 20-35 billion cubic feet per day by 2030 is projected, and US exports would likely play a major role in filling the gap, which in turn could lead to a tripling of natural gas prices from current levels by 2030.
• Manufacturing is highly sensitive to natural gas prices, and a significant portion of the US manufacturing sector is exposed to impacts from projected increased natural gas prices.
• Current expectations for a low cost, gas-driven electricity economy and significant deployment of natural gas vehicles could be foregone due to LNG exports.

“CRA is pleased to lend its energy economics expertise to the national evaluation of US LNG exports,” said CRA’s President and Chief Executive Officer Paul Maleh. “Consultants in our Energy Practice employed our advanced, proprietary gas and electricity models, combined with additional economic tools, to produce a valuable contribution to the LNG export debate.”

CRA’s project team was led by consultants in the Energy Practice, including report co-authors Ken Ditzel, Jeff Plewes and Bob Broxson.

The report is available on CRA’s website.

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LNG World News Staff, March 11, 2013