At a March 9 joint hearing of the Texas House International Trade and Intergovernmental Affairs and Energy Resources committees, Erica Bowman of America’s Natural Gas Alliance (ANGA) highlighted the potential benefits of expediting LNG exports from the U.S.

Bowman, ANGA’s vice president for research and policy analysis, spoke in support of a resolution to urge the U.S. Congress and President Barack Obama to expedite natural gas exports. The resolution was proposed by Texas State Rep. Gene Wu of Houston.

Bowman told members of the committees that “the reserves of the United States’ natural gas have grown over the years due to technological advances.” In 2000 it was estimated that the U.S. had more than 1,200 trillion cubic feet (Tcf) of natural gas available, but that estimate is now at more than 2,700 Tcf, she said.

This expansive growth in potential U.S. shale gas reserves has driven natural gas prices down to the very bottom of the range predicted by the Energy Information Administration’s (EIA’s) 2009 Annual Energy Outlook (AEO), Bowman said. In the most recent AEO, prices are projected to remain at those low levels through 2035.

The dramatic increase in production has occurred even as rig counts have fallen significantly, Bowman explained, causing earlier expected natural gas import levels to drop to a nearly negligible level, and paving the way for a substantial increase in exports.

According to a summary of the testimony released by ANGA, the increase in available natural gas resources means that the incremental demand from LNG exports would likely result in only small price impacts, with overall prices remaining at the low end of the historical spectrum. An EIA study released in October found that increasing export levels to between 12 billion cubic feet per day (Bcf/d) and 20 Bcf/d would only lead to price increases of between 10 cents and 80 cents per million Btu. At lower export volumes, the related price increase would be even smaller, the ANGA statement said.

Bowman also discussed how expedited LNG exports could drive investment in the petrochemical industry and domestic manufacturing. Allowing more exports would encourage producers to continue to maintain high production levels by increasing demand for dry gas. Continued high production levels would keep NGL prices low, benefitting the domestic chemical, fertilizer and plastics industries, she said. An ICF International examination of the impacts of LNG exports found that NGL volumes would increase between 138,000 barrels per day (bbl/d) and 555,000 bbl/d by 2035 due to LNG exports, ANGA reported.

There is substantial demand for LNG currently, but time is of the essence when it comes to who will benefit from the opportunity to meet that demand, Bowman said.

“Global demand for LNG is expected to double by 2025,” she said in an email to Hart Energy. “There are many proposed LNG export facilities announced throughout the world, and the U.S. is one supplier among many competing to fill that demand. The faster the U.S. permits export facilities, the better chance the U.S. facilities will have to secure contracts and start supplying LNG to those who want and need it.”

Contact the author, Caryn Livingston, at clivingston@hartenergy.com.