71 Billion Reasons to Not Export Natural Gas

Those who have opposed natural gas exports are starting to know what it feels like to be on the losing side of a fight. But it looks as though they'll go down swinging. This week, the American Chemical Council reported that the U.S. chemical manufacturing industry is poised to make $71.7 billion in investments to take advantage of cheap, domestic natural gas that could lead to 500,000 jobs in the United States.

If those numbers seem too good to be true, then consider that proponents of natural gas exports claim that exporting cheap natural gas will result in 150,000 more jobs as well. Ultimately, though, neither of these goals will be attained. In this video, Fool.com contributor Tyler Crowe talks with Aimee Duffy to look at these numbers and explains that the truth is probably somewhere in the middle of these two outcomes. With both needing cheap natural gas to get a leg up, investors should look for a balance between the two. 

With domestic natural gas production growing faster than consumption, the United States is expected to become a net exporter of natural gas by the end of the decade. Cheniere Energy will become the first LNG exporter approved to ship to high-margined countries that aren't members of a free-trade agreement. With natural gas prices expected to rest in the $4 to 0$5 range per MMbtu, Cheniere is primed for solid gains once the initial LNG trains start chugging in the first half of 2015. Don't wait until then -- this 2013 darling continues to outperform the broad markets. Be sure to read all the details in this premium research report


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  • Report this Comment On June 02, 2013, at 11:12 AM, PeakOilBill wrote:

    The thing about exporting fossil fuels is that once they are depleted, they are gone forever. Would someone inform me how people will keep our industrial civilization functioning when that day arrives? What fuel will replace the 85% of energy now provided by coal, oil, and natural gas?

    Windmills? Solar panels? Good luck fabricating, transporting, and maintaining billions of them without using a whole lot of oil and gas in the process.They don't last forever either. Maybe they will mine Titan for hydrocarbons, or finally perfect affordable nuclear fusion. That sounds cheap and simple, doesn't it? Wasn't electricity made from nuclear fission supposed to be "too cheap to measure?" How did that work out? Where are those nuclear powered trucks, trains, tractors, jets, ships, and cars hiding?

    Maybe the billionaires who own the tax avoiding gas pipeline master limited partnerships will arrange to send your hungry children or grandchildren a turkey every Christmas.

  • Report this Comment On June 02, 2013, at 11:26 AM, VegasSmitty367 wrote:

    Screw the sheeple, these companies are operating to make money for the board and the shareholders.

  • Report this Comment On June 02, 2013, at 11:36 AM, jonny665 wrote:

    If Dow claims that these projects would create half million jobs, why haven't the done it already to prove their point? Want to maximize profits, bribe the politicians like the other corporations.

  • Report this Comment On June 02, 2013, at 11:47 AM, toomuchgas wrote:

    The gas belongs to the companies that drill for it and build pipelines to move it. Want really cheap gas? It doesn't belong to the chemical companies, the government, or the socialists who want it donated for the greater good. Let the free market determine who will pay the highest price for it and everyone will get the greatest benefit.

  • Report this Comment On June 02, 2013, at 12:22 PM, dickne wrote:

    Lets stop exporting food.

  • Report this Comment On June 02, 2013, at 12:31 PM, rednalbo wrote:

    After a decade long disgust with the oil and gas industry, I finally have figured out what angers me and so many others.

    "It does not do the most good for the most people!"

    Rather, It makes a small handful of very greedy people so extremely rich that it should be considered a sin. Especially when you realize that once all the money and the oil and gas is gone, We (public/taxpayers) will be left with all the mess and devastation to clean up. Long after all these fat cats are gone and have lived so high on the hog.

  • Report this Comment On June 02, 2013, at 1:41 PM, wferaaa wrote:

    Exporting NG will increase production using a process that is unsafe and unpredictable even though the NG industry is trying to make the public think it is .There are plenty of issues ( that are mainly covered up ) that have affected people all across the country .Fracing chemicals are bad but not the major concern in the extraction .It's drilling muds used in drilling lower levels below 2500 ft. .No casing is in place while this lower level drilling goes on At these levels psi can reach over 5000 or more causing rupture in weak areas of formations .This in turn can cause migration of natural minerals,metals,and Biogenic NG up into aquifers .Prosperity should not trump concern for people's health or environmental impact .

  • Report this Comment On June 02, 2013, at 1:44 PM, ddcmall wrote:

    Cheap US natural gas for China will get even cheaper once China completes the buildup of its military, invades us and takes the NG for free. Good plan...

  • Report this Comment On June 02, 2013, at 2:19 PM, NOTvuffett wrote:

    Mr. Crowe and Ms. Duffy,

    I am a chemist in a small chemical manufacturing business, About half of the chemicals I buy require nat. gas for their manufacture. So, you can see that higher nat. gas prices are generally a bad thing for me. I do own some stocks that profit from changes in nat. gas prices, but I spend more every week on these chemicals.

    There is so much gas in the US, exporting a little won't drive pricing.

  • Report this Comment On June 02, 2013, at 2:47 PM, leadfoot97 wrote:

    This is "home grown" energy, and we need it to support our own economy. Of course their are those who see huge profits for exporting this product, but I think it's high time we dig ourselves out of the energy doldrums !

  • Report this Comment On June 02, 2013, at 4:37 PM, ddimicco wrote:

    Commentary: Natural gas exports would halt US manufacturing comeback

    Fuel Fix

    By Daniel R. DiMicco

    23 April 2013

    For the last decade, media headlines in the U.S. have reported on closed factories and the loss of millions of manufacturing jobs to facilities located overseas. How times have changed. Today there is

    But why?

    Abundant, low-cost supplies of U.S. natural gas provide an opportunity to bring manufacturing jobs back to America and rebuild our middle class. The gas is creating new jobs. It is as simple as that. There is a little-noticed but hugely important natural gas policy decision our government is about to make. If we are not careful with our natural gas export policy, we could squander this opportunity by allowing unchecked natural gas exports. We cannot let that happen.

    The Department of Energy (DOE) is evaluating 16 applications that seek to export liquefied natural gas (LNG) to countries that do not have free trade agreements with the U.S., like China. The growth in U.S. natural gas supplies has spurred this interest in additional LNG exports. As it considers these applications, the DOE needs to evaluate how we can best use our natural gas resources to create the greatest economic benefits for Americans.

    Abundant natural gas supplies are already resulting in new manufacturing investments in this country. Low natural gas prices and a reliable supply are a primary reason Nucor chose to locate a direct reduced iron (DRI) facility in Louisiana. This project, currently under construction, is a $750 million capital investment that is employing over 600 construction workers and will create 150 permanent, high-paying jobs.

    We are not alone. New industrial projects in the U.S. totaling more than $100 billion have been announced. Using domestic natural gas to grow our manufacturing sector and export more value-added products will create a much stronger U.S. economy than will exporting LNG alone.

    A recent study by Charles River Associates confirms this, finding that increased manufacturing from cheap natural gas creates twice the direct value for our economy and eight times as many jobs as LNG exports. The study also shows how easily this opportunity could be lost. It projects high volume LNG exports would double prices from today’s levels, driving them to $8-10 per million Btu. Should this happen, much, if not all, of the $100 billion of manufacturing investment mentioned above will be at risk, and the millions of jobs those investments expect to add in this country will never materialize.

    U.S. natural gas demand will increase with these new manufacturing projects and expansions, benefitting domestic producers even without large-scale LNG exports. The Charles River study shows, based off of current announced industrial projects, that natural gas demand from the industrial sector is expected to grow by 4.8 billion cubic feet per day (Bcf/d) over the next decade. Another 13 Bcf/d in natural gas demand growth is expected over the next 20 years as coal plants are shut down in response to economics and federal environmental regulations.

    Supporters of unlimited LNG exports label those advocating a pragmatic, thoughtful approach to exports as protectionists. They talk about the global energy market as though it is a virtuous example of the theory of free trade at work. That is absurd. Global energy reserves are mostly controlled and abused by either governments, like Russia, or cartels who have manipulated the price of energy to their benefit for decades. In addition, European governments have made the political decision to ban hydraulic fracturing, thereby leaving sizeable shale gas reserves in the ground that would make them less reliant on Russia for natural gas. As a result, the U.S. is expected to export LNG to Europe to save them from both their own political decision to forgo energy production and the energy price manipulation they experience from Russia. Supporters of LNG exports overlook the protectionist trade practices that are occurring in global energy markets.

    Allowing unlimited exports could stifle our economic recovery. Natural gas is giving us a major competitive advantage to help drive our global competitiveness and create high-paying jobs here at home. U.S. natural gas supplies are a game-changing opportunity that will, in part, according to Boston Consulting Group (BCG), create up to 5 million jobs by end of the decade.

    We have a unique opportunity to put our country on the road to long-term economic prosperity. But for that to happen we have to realize the interplay between energy and manufacturing policy. Adopting an unlimited export policy that sends large amounts of our domestic natural gas resources overseas would put this economic opportunity and its benefits at risk. Nothing less than our nation’s energy security, its manufacturing base, and a chance for up to 5 million jobs are at stake.

    Daniel R. DiMicco is Executive Chairman of Nucor Corporation, a manufacturer of steel products. Nucor Corporation is a member of America’s Energy Advantage (AEA), a coalition of businesses and organizations dedicated to raising awareness of the emerging renaissance in American manufacturing made possible by our country’s new abundant and affordable supplies of natural gas.

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