Increased natural gas production is projected to satisfy 60% to 80% of a potential increase in demand for added liquefied natural gas (LNG) exports from the Lower 48 states, according to recently released EIA analysis. The report, Effect of Increased Levels of Liquefied Natural Gas Exports on U.S. Energy Market, considered the long-term effects of several LNG export scenarios specified by the Department of Energy's Office of Fossil Energy (FE). The study also considered implications for natural gas prices, consumption, primary energy use, and energy-related emissions. Effects on overall economic growth were positive but modest. A discussion of caveats and limitations of the analysis is also included.
In the export scenarios that EIA was asked to analyze, LNG exports from the Lower 48 states start in 2015 and increase at a rate of 2 billion cubic feet (Bcf) per day per year, ultimately reaching 12, 16 or 20 Bcf/d. EIA also included a 20-Bcf/d export scenario (Alt 20-Bcf/d) with a delayed ramp-up to identify the effect of higher LNG exports implemented at a more credible pace.
EIA looked at these scenarios in the context of five cases from its Annual Energy Outlook 2014 (AEO2014) that reflect different supply and demand assumptions. The cases used in the study were: EIA's Reference, Low Oil and Gas Resource (LOGR), High Oil and Gas Resources (HOGR), High Economic Growth (HEG), and Accelerated Coal and Nuclear Retirements (ACNR). The five AEO2014 cases used as baselines in the study already include some amount of LNG exports from the Lower 48 states. The LNG exports in the AEO2014 baseline cases, rather than the scenarios specified for this study, reflect EIA's own views on future LNG exports.
LNG exports from the Lower 48 states in the baselines have projected 2040 levels ranging from 3.3 Bcf/d (LOGR case) to 14.0 Bcf/d (HOGR case). Estimated price and market responses to each pairing of a specified export scenario and a baseline will reflect the additional amount of LNG exports needed to reach the targeted export level starting from that baseline.