Why the US economy will benefit from LNG exports

The macroeconomic impacts of liquefied natural gas exports from the United States

The United States has witnessed a significant shift in natural gas production in the past five years. Optimism about shale gas potential and accelerated recovery has created a shale gas boom. The belief that the US would continue to be a net importer of natural gas in the foreseeable future has completely changed.

US shale gas production has increased rapidly due to advances in hydraulic fracturing and horizontal drilling techniques that have reduced production costs. The full-cycle cost of shale gas production dropped by about 40 to 50 percent relative to the cost of conventional natural gas extraction in 2011.

As a result, the outlook for natural gas production is more optimistic now than ever before. According to the latest Annual Energy Outlook 2013 and Energy Information Administration projections, US natural gas production will increase by 40 percent by2040 from its current level of 27.4 trillion cubic feet (tcf), mainly because of expected increases in shale gas production over the next two decades. Shale gas is projected to account for more than 50 percent of total US natural gas production by 2040.

Why the US economy will benefit from LNG exports