Natural Gas Resources Would Dwarf Exports
Although free trade opponents are raising concerns that the export of US natural gas resources would raise domestic prices and cripple gas-dependent manufacturing industries, in fact cumulative exports would amount to only slightly more than 1 percent of total estimated natural gas resources between now and 2035. That’s the point made by the American Petroleum Institute in a recent broadside and supported by figures from various energy analysts.
The graph above shows the estimates of United States gas reserves as calculated by the Energy Information Administration, a government agency, and ICF International, a private consulting firm in northern Virginia. Shale gas resources are represented in blue and total reserves in red. To the right, represented in green, are projections for US consumption and exports totaled over the 20-year period of 2015 to 2035. All are measured in trillions of cubic feet.
As can be seen, US consumption is dwarfed by reserves and exports barely show up on the graph. IEA’s projections are much lower than ICF’s but even then US consumption about matches projected shale resources while exports represent less than 10 percent of domestic consumption. The implication is that exporting gas will not have much impact on domestic prices.
The chemical industry and Dow Chemical in particular have opposed gas exports on the grounds that consumption should be saved for domestic use and exports only serve the oil industry. It would be interesting to see how the industry would react if Congress decided to ban banned the export of chemical products on the same grounds. In fact gas exports would not only enrich American workers and industries but would strengthen other countries as well. Japan is currently suffering a manufacturing meltdown as it closes reactors and pays triple the US price for imported natural gas.
Of course much of this gas can only be accessed at higher costs and will stay in the ground unless prices rise. But technologies are always improving and costs will come down as well.
In any case, if the US does not act other countries will. Australia has just discovered huge gas reserves in the Outback and already has an export infrastructure. Russia has Europe in a stranglehold and is mapping out a plan to pipe Siberian gas to the Pacific Rim. It would be interesting if the former Soviet Union should end up being the major supplier of the world market while the US plays a Stalinistic game of “capitalism in one country” with its ample gas supplies.