Expect the LNG-export battle to continue, despite the economically obvious

posted at 8:01 pm on December 6, 2012 by Erika Johnsen

Yesterday, the Department of Energy finally released an economic-impact report they commissioned that found that, why yes — allowing American companies to export natural gas would in fact be an economic boon. As Mark Mills writes for Forbes, it’s almost like the Department of Energy has finally discovered Economics 101 or something:

Apparently exporting something America has in abundance creates economic value — in this case, natural gas, not wheat (but that would be obvious).  And the more of it you export, the more money you can make.  And apparently in Washington D.C. this is “breaking news.”

The Department of Energy (DOE) released a report it commissioned from venerable NERA Economic Consulting: Macroeconomic Impacts of LNG Exports form the United States.  Their mission?  “… use its NewERA model to evaluate the macroeconomic impact of LNG exports.”  Their findings?

  • Across all these [various levels of export] scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased. [emphasis added]

And…

  • LNG exports have net economic benefits in spite of higher domestic natural gas prices. This is exactly the outcome that economic theory describes when barriers to trade are removed.

But it goes without saying that Democrats heeding the positive review and recommendations of a report commissioned to once again rehash things that the government already actively endorses in other economic sectors, would just be too easy. From The Hill:

The report, commissioned by the Energy Department (DOE), was a win for export advocates who are urging DOE to approve a slew of application to send liquefied natural gas abroad.

Not so fast, says Sen. Ron Wyden (D-Ore.), who is the incoming chairman of the Senate’s energy committee and a critic of export proposals.

“My staff has already spotted some concerns [with the report],” Wyden told reporters in the Capitol on Thursday. “Particularly they are concerned that the projection that they used for purposes of saying ‘this would be the amount exported’ is significantly under what is now already evident.”

Of course. There are too many parties with very keen interests in this thing to just let it go already, so we’ll keep playing political ping-pong with the issue for who knows how long yet. Worldwide demand for our energy stores is undeniably increasing, and there are 15 applications for licenses to export liquified natural gas currently pending at the DOE. It shouldn’t be up to politicians with a whole heap of sketchy interests to dither over the issue while our economy waits on their largesse. Our stagnant growth and unemployment could certainly use the help — it’s time to start cookin’ with gas.


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L I B !

KOOLAID2 on December 6, 2012 at 8:06 PM

Frack ‘em!

Corporal Tunnel on December 6, 2012 at 8:07 PM

…they will have to block it!
We can’t have success!

KOOLAID2 on December 6, 2012 at 8:08 PM

KOOLAID2 on December 6, 2012 at 8:08 PM

Nothing short of complete failure is good enough for this nation.

Corporal Tunnel on December 6, 2012 at 8:09 PM

idiots

cmsinaz on December 6, 2012 at 8:11 PM

My wife owns five LNG wells that she inherited when her father passed away in September, 2008. Right when the economy tanked. Up until 2007, the wells were producing @ $60k a year for him. My wife and her brother made $7k each last year. There is a glut of LNG on the market and the oil companies literally don’t have anywhere to store it. This year they will both make @ $5k each.

Sad.

robblefarian on December 6, 2012 at 8:19 PM

Of course. There are too many parties with very keen interests in this thing to just let it go already, so we’ll keep playing political ping-pong with the issue for who knows who long yet. Worldwide demand for our energy stores is undeniably increasing, and there are 15 applications for licenses to export liquified natural gas currently pending at the DOE. It shouldn’t be up to politicians with a whole heap of sketchy interests to dither over the issue while our economy waits on their largesse

…Buffett has got to be able to SHIP IT ALL!…when he’s ready….

KOOLAID2 on December 6, 2012 at 8:29 PM

My wife owns five LNG wells

no she doesn’t unless you’re able to Liquify Natural Gas underground

newrouter on December 6, 2012 at 8:32 PM

Liberals are a threat to freedom and prosperity. They’re insane.

Charlemagne on December 6, 2012 at 8:34 PM

I don’t know. I am personally not in favor of us selling our energy to other countries. Energy is a natural resource that we should use for our needs, and that which is not used for our needs should be left untapped and handed to our children.

astonerii on December 6, 2012 at 8:35 PM

no she doesn’t unless you’re able to Liquify Natural Gas underground

newrouter on December 6, 2012 at 8:32 PM

My mother owns the mineral rights to a property with a LNG well on it.

She gets a quarterly royalty check.

That may be what robblefarian meant.

Electrongod on December 6, 2012 at 8:38 PM

The battle is “because of”, and NOT “in spite of”.
.
They cannot tolerate American success.

listens2glenn on December 6, 2012 at 8:39 PM

Liberals are a threat to freedom and prosperity. They’re insane.

Charlemagne on December 6, 2012 at 8:34 PM

.
The people calling the shots on this are not insane.

They are completely cognitive saboteurs.

listens2glenn on December 6, 2012 at 8:44 PM

Across all these [various levels of export] scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased. [emphasis added]

“Across all these eating scenarios, the human was projected to gain weight from eating additional Whoppers. Moreover, for every one of the dining scenarios examined, net weight increased as the number of Whoppers increased.”

“Investment” in this study: $50M.

American bureaucracy. Taking science to a new level.

Axe on December 6, 2012 at 8:50 PM

The people calling the shots on this are not insane.

They are completely cognitive saboteurs.

listens2glenn on December 6, 2012 at 8:44 PM

I know a lot of people believe this. But I still think they are whiling tea-pots.

Axe on December 6, 2012 at 8:52 PM

*whir

Axe on December 6, 2012 at 8:52 PM

KOOLAID2 on December 6, 2012 at 8:08 PM

.
Nothing short of complete failure is good enough for this nation.

Corporal Tunnel on December 6, 2012 at 8:09 PM

.
The U.S. is the biggest obstacle to the WCPA. Eliminating us as a self-capable sovreign nation is the only thing that going to satisfy them.

listens2glenn on December 6, 2012 at 8:54 PM

listens2glenn on December 6, 2012 at 8:44 PM

.
I know a lot of people believe this. But I still think they are whiling tea-pots.

Axe on December 6, 2012 at 8:52 PM

.
Time will tell. Meanwhile, the vigilant keep watch.

listens2glenn on December 6, 2012 at 8:58 PM

My mother owns the mineral rights to a property with a LNG well on it.

no she owns natural gas which is piped to a terminal where it is liquified -200 degrees f(estimate). gad public education suxs

newrouter on December 6, 2012 at 9:07 PM

Oh boy. We export food too. I think food prices are too high, so lets stop doing that. Hey Argentina does that … And look what that did for the economy. Helped ruin farming and economic growth driving a breadbasket into a basket case. But ignore that.

Even better while refusing to tap our own natural resources, we can turn our food into fuel inefficiently further driving the price of that higher too.

Why stop there? Let’s grow rice in the deserts of California with subsidized expensive water that is too scarce rather than importing rice from countries that grow it cheaper while sending them our cheap fuel lowering the price of food and fuel everywhere (the way normal trade does).

And while we are at it, lets make sure the “other guy” doesnt benefit from our really cheap coal exports because then they can make sneakers for less which causes the “loss” of good paying sneaker making jobs here. (Even though we would pay more for sneakers and lose coal jobs and port jobs in the process.)

And even worse, I think North Dakota is still paying too much for natural gas because exporting it to Oklahoma and the rest of the US is causing prices to Dakotans to rise and that’s “unfair” and the rest of America should pay more because its not their gas.

Of course, its not the politician’s gas either, but that shouldnt get in the way of their telling you to whom you can sell what resources. By the way, the market for many white collar skills is global too, and it would say insurance companies and american consumers money if we are allowed to import actuarial skills from India bur werent allowed ronexport our statistical geniuses skills over sees. Cuz our statistical geniuses are a national resource too even though the nation dosnt own them (not completely, we do own about 45% of your output … and not yet – give the socialists time)

Aarrgghh … The possibilities for destroying wealth while subsidizing inefficient methods, blocking free trade, and muddle headed idiocy on economics and so on are boundless.

Remind me why if I own a resource or skill or land I need some DC knucklehead’s permission to sell it to anyone I want for as much as they are willing to pay me? Why should they force me to do it their way when net-net the country is worse off always when they intervene?

Stupidity rules.

PrincetonAl on December 6, 2012 at 9:25 PM

gad public education suxs

newrouter on December 6, 2012 at 9:07 PM

As do people that feel a desperate need to be a$$hats – quit being one.

Midas on December 6, 2012 at 10:11 PM

Some day we will be an energy powerhouse.

How sad that we will owe everything to the Chinese and need to destroy our environment to meet our financial obligation.

But you see to save the environment we had to destroy the environment.

abnormal_1 on December 6, 2012 at 10:24 PM

In so many ways we are sitting on a potential economic miracle. Oil, gas, coal and food and what do we do? We demonize oil, gas and coal and instead burn our food.

jpmn on December 6, 2012 at 10:24 PM

As do people that feel a desperate need to be a$$hats – quit being one.

Midas on December 6, 2012 at 10:11 PM

because telling stupid peeps that they don’t produce LNG hurts their proggtard “feelings”?

newrouter on December 6, 2012 at 10:32 PM

As do people that feel a desperate need to be a$$hats – quit being one.

Midas on December 6, 2012 at 10:11 PM

it is LIQUIDFIED NATURAL GAS. it don’t come out of the ground that way fool

newrouter on December 6, 2012 at 10:35 PM

robblefarian on December 6, 2012 at 8:19 PM

I would love to write up my story in detail, I have reduced women i met in bars to tears. Well, OK, I was the one crying..but anyway…

Big, bad energy companies and their investors don’t deserve good returns and even Bill O’Reilly dumped his holdings on ethical grounds!

Why exporting oil or gas may take the task of “creating” jobs away from where it belongs..in Washington!

IlikedAUH2O on December 6, 2012 at 11:05 PM

Has ANYONE checked lately on the Dreams From His Father?

The Africans sure know how to handle resource allocation and management. They have..drum roll…government control and subsidies!

How about a comment on how it is working?

” In the aftermath of the nation-wide protests, many stakeholders have blamed the secrecy and corruption in the management of the subsidy process by government officials and regulators, calling for a review of the entire subsidy regime….. One of such views was from the leader of the Save Nigeria Group (SNG), Mr. Tunde Bakare, who note that, “The subsidy probe is a golden opportunity to clean the Augean stable, which the nation’s oil and gas industry has become.” According to him, “the monumental corruption in Nigerian National Petroleum Corporation, NNPC, stinks to high heavens.” Source: AllAfrica.com, June, 2012 http://allafrica.com/stories/201206240613.html

Even Kenya had problems!


“Poor governance and rampant corruption in Kenya have had a negative impact on efforts to attract investment, and widespread poverty, rapid population growth, rising unemployment rates and strained welfare services have long posed problems. ”

How did they attack the problems?

Positive developments in relation to corruption and investments:

“Political interference in the private sector has been reduced via structural reforms, including privatisation and deregulation, while regulatory procedures have been streamlined and simplified, resulting in Kenya being named as one of the world’s top ten reformers by the World Bank & IFC in 2009.”

Source: TRUSTLAW Dec. 6, 2012 GOOD GOVERNANCE

IlikedAUH2O on December 6, 2012 at 11:22 PM

As if on cue:

About sixty seconds ago, XOM sent me an email:

Rosneft and ExxonMobil Sign Agreement for Western Siberia Tight Oil Pilot Project

Filthy Russian Capitalists!

IlikedAUH2O on December 6, 2012 at 11:26 PM

Those North-west coast members of congress need to get out and get some sun. I know it can be depressing to live in an area where it rains a lot. A little plastic surgery might help to with the self-. esteem.

Drill and Fill on December 6, 2012 at 11:29 PM

I don’t know. I am personally not in favor of us selling our energy to other countries. Energy is a natural resource that we should use for our needs, and that which is not used for our needs should be left untapped and handed to our children.

astonerii on December 6, 2012 at 8:35 PM

Better idea:
Let’s sell the energy to other countries and use the economic benefits to improve the quality of life here in the US. This increase in the quality of life (as well as in real GDP per capita) will enable more research into new forms of energy (and ways to better utilize old ones.) Your children will then have MORE energy than they would if you just left in the ground.

It’s the same concept as putting your money in an investment account rather than hiding it under your bed.

Besides, the choice belongs with those who own the rights to the land. Not with the government and not with people who don’t have any stake whatsoever in the matter.

FlareCorran on December 7, 2012 at 12:03 AM

DoE is so thoroughly politicized that it’s surprising such a report would ever see the light of day.

petefrt on December 7, 2012 at 8:05 AM

So a leftist Oregon congressman’s staff now runs the US economy.

Akzed on December 7, 2012 at 9:03 AM

Gee. Maybe these Obama czars are beginning to pick up some smarts for a change.

However, the Big Cheese will soon put a stop to their learning process – “WE can’t have cheap energy for Americans, can we? That’s contrary to Obama’s agenda.

dockywocky on December 7, 2012 at 9:48 AM

Astonerii agreed.

The benefits would be short term and limited in scope. While yes someone does have a right to do with their stuff what they will within the law the govt absolutely has a constitional authority to regulate exports something our libtardtarian globalist friends like to overlook when they make their pseudoconstitutional rants.

avgjo on December 7, 2012 at 3:37 PM

You can’t do that – it would create PROFIT for the evil 2% who are all obviously republicans, or even worse CONSERVATIVES

georgeofthedesert on December 8, 2012 at 1:03 PM