This report is an update to the study of the macroeconomic impacts of liquefied natural gas (LNG) exports that was issued by the US Department of Energy (DOE) in December 2012. The new study, “Updated Macroeconomic Impacts of LNG Exports from the United States,” updates all 63 LNG export scenarios modeled in the DOE study and adds several new scenarios. The new study, which was sponsored by Cheniere Energy, Inc., includes additional analysis of the cumulative impacts of LNG exports up to the maximum amounts that the market would allow under various domestic and international market scenarios.

The findings of the updated study confirm and extend the findings of the previous study that were endorsed by DOE in its Freeport Order (No. 3282) and subsequent LNG application approvals. LNG exports provide net economic benefits in all the scenarios investigated, and the greater the level of exports, the greater the benefits. The market for LNG exports is self-limiting, in that little or no natural gas will be exported if the price of natural gas in the US increases much above current expectations. High levels of exports can be expected only if natural gas is plentiful and inexpensive enough to produce so that prices remain below current levels, even with high levels of exports.

The new report responds to several issues raised since the DOE issued NERA’s first report, including use of more current data, the cumulative impacts of additional license approvals, impacts on the competitiveness of the US chemicals industry, and impacts of LNG exports on employment.

The new report is based on the EIA’s Annual Energy Outlook 2013 and International Energy Outlook 2013, which provide the most recent relevant data and available forecasts. The study findings show that the US is projected to remain one of the lowest cost producers of chemicals in the world even with the highest levels of LNG exports considered. For its longer-term forecasts of impacts on jobs creation, the NERA study uses the same assumption as the most recent Congressional Budget Office budget and economic outlook: the economy will return to effective full employment by 2018. The investment required by 2018 to build export facilities and increase natural gas production will speed the predicted return to full employment and is forecast to put up to 45,000 currently unemployed workers back to work during this period.