IECA Testifies On Likely Impacts Of LNG Exports Before U.S. International Trade Commission

Paul Cicio, President of the Industrial Energy Consumers of America (IECA) testified before the U.S. International Trade Commission (USITC) recently on the “Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors.”

Natural gas is not a renewable resource and LNG exports significantly accelerate the consumption of U.S. low-cost natural gas which directly reduces the competitiveness of manufacturing companies who consume large quantities of natural gas. The recently released DOE report entitled “The Macroeconomic Impacts of Increasing U.S. LNG Exports,” includes Figure 1 below and illustrates the U.S. breakeven cost for shale natural gas.

FIGURE 1

Source: “The Macroeconomic Impact of Increasing U.S. LNG Exports,” U.S. Department of Energy

Figure 2 illustrates the cumulative EIA forecasted U.S. demand and LNG export demand at 14 Bcf/day or the equivalent of 5.11 Tcf/year. This is the amount that the DOE has already approved for export to countries without a free trade agreement. The cumulative demand in 2040 is 799.15 Tcf/year and would consume all low-cost natural gas under $9.00 mcf. Today’s Henry Hub price is safely under $3.00/mcf. If LNG exports are increased to 20 bcf/day or 7.30 Tcf (see Figure 3), all low-cost natural gas under $11.00/mcf is consumed.

FIGURE 2
CUMULATIVE U.S. NATURAL GAS AND LNG EXPORT DEMAND (Trillion cubic feet)

Source: Energy Information Administration (EIA)

FIGURE 3
CUMULATIVE U.S. NATURAL GAS AND LNG EXPORT DEMAND (Trillion cubic feet)

Source: Energy Information Administration (EIA)

About The Industrial Energy Consumers of America
The Industrial Energy Consumers of America is a nonpartisan association of leading manufacturing companies with $1.0T in annual sales, over 2,900 facilities nationwide, and with more than 1.4 million employees worldwide. It is an organization created to promote the interests of manufacturing companies through advocacy and collaboration for which the availability, use and cost of energy, power or feedstock play a significant role in their ability to compete in domestic and world markets. IECA membership represents a diverse set of industries including: chemical, plastics, steel, iron ore, aluminum, paper, food processing, fertilizer, insulation, glass, industrial gases, pharmaceutical, building products, brewing, independent oil refining, automotive, and cement.