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8/3/2019 Evaluating the Prospects for Increased Exports of Liquefied Natural Gas from the United States by The Brookings In…
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Evaluating the Prospects or
Increased Exports o Liquefed Natural Gas
rom the United States
Charles Ebinger
Kevin MassyGovinda Avasarala
Energy Security Initiativeat BROOKINGS
January 2012
An Interim Report
8/3/2019 Evaluating the Prospects for Increased Exports of Liquefied Natural Gas from the United States by The Brookings In…
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
ii
AboUT ThE bRookINGS ENERGY SECURITY INITIATIVE
T E S I (ESI) s ss-pm b Bks Is dsd
s mldspl s d dl ll sps s d. ESI zs
pbl d p s ld pd d s wll sp lbl m,
ml d s ldsp pd ws d m s wll
q dmd dsd lkl sqs s s d
mpls sd plmk. T ESI Pl B Ss s dd sws ss dsd slsp pl sss m s bd s s, w mpss
d pl mmds.
Contact or the Energy Security Initiative:Gd Asl
Rs Asss
(202) 797-6231
Bks zs l pds spp s
s bsl mmm ql, dpd d mp. A-
s sppd b s ds s mmm, d lss
d mmds Is’s sls dmd
b d.
8/3/2019 Evaluating the Prospects for Increased Exports of Liquefied Natural Gas from the United States by The Brookings In…
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
iii
T s wld lk k mmbs Bks
E S I (ESI) Nl Gs sk F
m, sss, p, d w s m p. T -
s wld ls lk k s xps w m ddl
ms ps sp ps l s p. T
s l Y G s sss; d J Bks, ESI sd llw, d d P, dp d
F Pl Bks, l w. T wld
ls lk z lp Gl Cl, Rb Js, d Cs
Kpsk d d pd pss.
ACkNowlEdGEmENTS
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
iv
TAblE of CoNTENTS
Preace v
Members o the Brookings Institution Natural Gas ask orce v
Executive Summary vi
Introduction 1
omestic Supply actors 4
esource Availability and Production Sustainability 4
Environmental, egulatory, and Stakeholder Considerations
or Natural Gas Production 7
omestic emand actors 16
Power Generation 16Industrial Sector 18
ransportation Sector 19
Commercial and esidential Sector emand 20
Global Gas Market 21
Pacifc Basin 22
Atlantic Basin 25
Economics and inancing 28Eects o Exports on omestic Prices 28
ther Costs 28
Summary and Conclusions 30
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
v
I M 2011, T Bks Is E S I (ESI) b -l sd
psps s s
lqd l s (LNG) xps m
Ud Ss.
T sd s ddd w ps: s -
lzs s sbl -
l s xps; sls s s pj-
psd s m p. T s-
d wll lz dms d lmpls s pl xps.
m s s ESI ssmbld sk F
dpd l-s xps, ws xp-
s d ss pdd d s
sd. T s l sk F
sbs ps s m p
d l w msp.
PREfACE
Members of theBrookings Institution Natural Gas Task Force
kEllY bENNETT, Bk E, LLC
kEVIN book, ClVw E Ps, LLC
Tom ChoI, Dl
ChARlES EbINGER, Bks Is, sk F C-C
dAVId GoldwYN, Gldw Glbl Ss, LLC, sk F C-C
JAmES JENSEN, Js Asss
RobERT JohNSToN, Es GpmElANIE kENdERdINE, Mssss Is l E I
VEllo kUUSkRAA, Add Rss Il
mIChAEl lEVI, Cl F Rls
RobERT mCNAllY, T Rpd Gp
kENNETh mEdloCk, R Us’s Jms A. Bk III Is Pbl Pl
fRANCIS o’ SUllIVAN, Mssss Is l E I
loU PUGlIARESI, E Pl Rs Fd, I.
bENJAmIN SChlESINGER, Bjm Sls & Asss, LLC
PhIl ShARP, Rss F
TYlER VAN lEEUwEN, Add Rss Il
N-pp Obss sk F ms ldd ls m E Im Ad-
ms d Cssl Rs S.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
vi
Ow bks dll d p-
d l ps s,
Ud Ss ds sl l
pd bd, lw-s l s sppls.
As U.S. m s sl k d-
s l s, s s p pbl d p ss
psp s xps U.S. l s
m lqd l s (LNG).
A wd s wll m sbl-
U.S. LNG xps. O sppl sd,
ppl sd s ssbl
l s dlpm. Ts lds
d lbl d ssbl
mll bl s ss; d
ps dl, s, d ll l ms d ssd pd d
sm. O sppl-ld s ld
psl p U.S. l s ss-
m sp s lms xp ls
d lbl pl qpm d -
m ss.
O dmd sd, l s xps wll
mp, b mll d plll,
w mb d pl wm dms-
d-ss, ld pw-s, pml d dsl s,
d sp s. As msss-l-
d ls b m , s-
p ’s l-d l
p s lkl b d, ld
pjd s s l s
ExECUTIVE SUmmARY
pw s. Nl s s s ls lkl
s pml d dsl
ss s Ud Ss ds sl w
mp d l s s
l-bsd d sks. Dsp ssm
p sm pl mks sd s l s sp s, l-
s lkl pd lss dms dmd
pw d pml ss. T
d sl dms msss-ld l-
s, p d l – s dsk
mp pml dss d s
s lqd ls sp –
s wll s pll dms d
ss l s ll lkl s
LNG xps.
b mll sbl, U.S. LNG xps
wll b mp w s m
sppls lbl mks. Wl dl
bw dms U.S. l s ps
d s mks Al d
P bss pss m
l xps, sl s p-
l lbl l s ldsp,
ld pl dss LNG-mp -
s, p w m mp-
LNG xps, d dlpm l s ss ss. T x
w U.S. xps msls s
dms s d ss sps
LNG sppl s s lq qpm
d sp ss wll ls b
sbl U.S. LNG xps.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
1
INTRodUCTIoN
L
ss dd , Ud Ss ws
mj sll sppl -
l s s dl l pdd ss w pd b s dmd.
T s ws s p mp-
s, d b dl-m pls,
b s mp mls lq-
d l s (LNG), w ws dd s
l w m w dmd.1 S 2005,
w, s s dmll sd.
D b ds xpl d pd-
l d pps s
p l s 2008, U.S l s
s s d l s s ms psl m “l” -
ss sl ms ss Ns,
Mdws, d S b dlpd.
El sms sz l
s s d. Hw, s l
pds d d ss lk sd
lbl lms sl s m s
m pl l s U.S.
mx psl smd. Wl dms
s s b pl sd -l s s pw, dsl, pml,
d sp ss, s ls sd
s m pl mks d p ss
psp Ud Ss bm s-
xp LNG (s F 1).
T Ud Ss ld xps mds l-
ms l s ppl Mx d
Cd d, l Nmb 2011, m
LNG m K ml Alsk Jp,
l l l s l b m-pl dld.2 Sl pjs l d
sd wld l dlpm
lq ls bl xp LNG
sd qs. Ts ppsd pjs,
sm w b pl ppl
b dl m ps ,
l ld b d ml
ls s-b-s bss.
1 T 2005 E Pl A dmsd Fdl m spp smld LNG mp pss b d 2002 “Hkb Ds” b Fdl E Rl Cmmss (FERC), w bsld U.S. LNG mp mls mp-ss qms d llwd m mk bsd s; d b FERC xls pp s,s, xps d p s mp mls.
2 T K lq pl, d 1969, xpd Jp mds ms (30 b 2010) s pdd m Ck Il.CPllps, w d p l, d ll pld ls pl M 2011 d bl wsppl s; w, llw qk d sbsq l dss Jp, ddd xd ps pl sx ms llw ddl spms Jp.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
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m dmd, d lds ssssm
pl mks U.S.- LNG wld
s. I ls lds ssssm -
l p ms, p-
ll lk bw l s ps d
l ps mks. Em sbl
s x w LNG xps l-
m ps sm, d lds
s xps dms s ps;
ss lq, sp, d s-
; d lbl .
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
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T
dms U.S. l s sppl s-
s dmd pml b ss
s: s lbl d pdssbl; pl, l, d -
ml sds; d p d -
s ss.
esource Availability and Production
Sustainability
F s U.S. xps LNG b -
sdd sbl, s b dq d
ssbl dms s bs spp .
Nl s l s ppxml 25 p U.S. pm mx. Wl
l pds l m U.S. s sp-
pl, sl s pd s s pd :
m 2000 2006, sl s pd sd
b l 17 p; m 2006
2010, pd sd b l -
48 p (s F 2).3 Ad
E Im Adms (EIA),
sl s pd Ud Ss d
4.87 ll b () 2010, 23 p
U.S. d s pd. B 2035, s smd sl s pd wll 46 p
l dms l s pd.4
domESTIC SUPPlY fACToRS
Figure 2: U.S. Natural Gas Production by Source,1990-2035 (tcf/year)
S: U.S. E Im Adms, Al E Olk 2011
G l sl s
U.S. s s, m dsss
pl xps s psps s
ssd lbl d dlpm. F x-
ps b sbl, s m sl d -
l ss ds b s dls
l pd d mp w
w d mb dms d ss. T b mb ps d sds
mp d l m ll
30
25
20
15
10
5
0
History Projections2009
1990 2000 2009 2015 2025 2035
Shale gas
Tight gas
Lower 48 onshore conventional
Lower 48 offshore
Coalbed methaneAlaska
3 “Al E Olk 2011 w Pjs 2035,” E Im Adms, Apl 2011. pp. 37, 39. (EIA, Apl 2011)4 Ibd.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
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bl sl s ss— lms
s bl s l sp-
s—lbl Ud Ss. Ts
sms m js d 700 ll b
() sl s 1,800 (s bl 1).
p s mbs x, Ud Ss
smd js 24 s 2010, ss-
sms sl s s
l wld b ss bw 25 d
80 s U.S. dms dmd.5 T sms
bl sl s ss ls mp
w sm l U.S. s ss (-
s d s, ld Alsk) 2,543 .
Bsd sms blw, sl s
ld bw 29 p
d 52 p l ll bl
l s s Ud Ss.
Table 1. Comparison of shale gas estimates forthe Lower 48 States, (Technically RecoverableResources, excluding proven reserves; in tcf)
Report Reserve Estimate
ICF 1,842
Advanced Resources International 1,189
Energy Information
Administration (EIA), 2011
827
Potential Gas Committee 687
S: ICF Il, Add Rss Il, EIA,Pl Gs Cmm
Te Importance o the Marcellus Shale
T Mlls Sl, l m
Appl Bs dl ps K-
k, Mld, Nw Yk, O, Psl,
ss, V, d Ws V, s
lp U.S. sl-s s. T Ml-
ls Sl l s ll m
pp U.S. s pd: d 4.5 bl-
l b p d (b/d) Jl 2011
smd l pd d
Jl smd l pd-
d 65.5 b/d wd. Hw,
pd w pd—d 60
p ps —d s l sz mk
Mlls l p ’s sl
s pl.6 Ad EIA, ss
Mlls Sl smd b 410 ,
l l w sms -
l U.S. sl s ss.7 I As 2011,
Ud Ss Gll S (USGS) lsd
w ssssm lbl s ss
Mlls Sl, w smd -
m ld 84 “dsd, ll
bl” l s. Ts sm ps-
d l s l 2 smd b
USGS s ps ssssm M-
lls 2002. Hw, USGS sm s ls
sl blw 410 Mlls
ss smd b EIA, d blw s-
ms lss.8 A m w,
mdl d ds mpld b USGS s 2011 ssssm Mlls
Sl b md pbl. W ,
wll sd mp l dsp
bw sms s.9 As w
sl pls, ss pl
Mlls Sl lss l
mll bl lms s d
ssbl pd w d s
dlpm.
5 “U.S. Nl Gs Pd, Csmp, d N Imps,” E Im Adms, (p://www../d/
dl.m?d=770)6 “Psl ds Ns l s pd w,” U.S. E Im Adms, As 30, 2011. (p://www..
/d/dl.m?d=2870)7 “Rw Em Rss: U.S. Sl Gs d Sl Ol Pls,” U.S. Dpm E, Jl 2011, p. 5.8 T Mssss Is l, s “T F Nl Gs” p smd bw 35 d 40 p U.S.’s
sl s ss Mlls Sl. (“T F Nl Gs,” Mssss Is l, 2011. p. 39.) (MI, 2011)9 Ad p b Rss F, w sms Mlls Sl ld b mplm, w EIA
sm bl s kw, b p lds (“d ss”), d USGS sm dsdss ps w, w ll dsd d ld, b ddd EIA’s 410 . S Dd MLl,“Udsd Rss d Id Rss,” Rss F, Ob 2011.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
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Sustainability o Shale Gas Production
I dd sz mll -
bl ss, w mj s wll
mp ssbl sl s p-
d: pd sl s wlls; d
dmd qpm sd sl s
pd. T pd sl s wlls
s b sbj m db, w
sm mms ss dlpd
wlls m p b lss pd s
dlpd d d pd p-
m xs wlls s b xd.
Hw, pm w m dpd
xps s ssbl sl s pd-
s s ss , w
d pd mpm ls
d pd psss.
T ssd pd sl s wlls ss
pml ll dlpms w
s: dl (“k”) p-
ss, w w, sd, d mls
d pss k ms
ppd s; d l zl
wlls (“lls”) dlld sl l. Sl
s ls d pd psss b dlp pdl s, mp-
ms x. F s,
mps w dll l lls d
s mb ss— m-
b d k ss ll
s—p wll, ld s l-
bl ss d wll pd.11 A lss
wll-sp-d llss b l
pd s d lm wll
b w ss ll pls, b d
dw p ss pd. O ss
x wll pd, s m-
pssbl pm wlls p-
d b p ps. I s, w, lkl
ms pds pl wlls
lz ds pd.
A m mmd sd w d
pd ssbl s lbl
dll qpm d sklld lb. I dd
dmds l m s
mb sl s psps, s s-
mp m pds sl l,
w s sm qpm ld pd
s m lbl s mk
ps, d m pds w m -
sd pls l s lqds, l-
bl b-pd d s pd. Fm-
s s s El Fd Sl xs d
U Sl O d Nw Yk, w
ds s— lq-
ds pdd w s pd— s
s s m pds ps
w s. T dsplm s m “d
s” psps, s s Hsll Sl
Ls, “w” psps s s Bk-k ld N Dk, s ld ,
s dd b dl s
s s (s F 3). Ow p-
sl md ll mpms,
s pd s kp p dsp dl-
.11 Hw, d m
dll qpm d mpw lqd-
pls ld ps -m s
d ss sl s pd.
10 “U.S. Nl Gs Rss d Pd Cp,” Add Rss Il, ppd C E, Apl 26, 2010.“Exbs Appl Sb Pss Lq, LLC L-m Az Exp Lqd Nl Gs,” U.S. Dpm E. p. 275. Als s “Nl Gs Ids Fks M Ld,” EPRINC B Mmdm, E Pl RsFd, I., Jl 1, 2011. (EPRINC, Jl 2011)
11 EPRINC, Jl 2011.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
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Figure 3
S: N Csl
Environmental, egulatory, and
Stakeholder Considerations or Natural
Gas Production
T s U.S. LNG xps dpds l
d dlpm l
s. Ts dlpm sl dpds s
d ssbl p
k, pss s b d spbl s s sl s pd s
sd. T lss p
dd b S E’s Ads
Bd (SEAB) ps d s
sl s dlpm d “[]bs
wll b ll dbl pss d
ml mp sl s pd-
, pl sk ms
pl bs s dms -
s.”12 C d -
ml mp sl s dlpm s ld
m ll pps ps, sm
w ll bs k. F
s p, ds ws l
U.S. Gas Rig Count and Dry Production (Monthly Average)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
70
60
50
40
30
20
10
0
Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10
R i g
C o u n t
P r o d u c t i o n
B c f d
Rigs
U.S. Dry Gas Production
Sources: Baker Hughes, EIA
d sl s s m s lls
dlpm.
Environmental Issues
T m ml sss
d b ddssd sl s pd s
sl d pd bs m
s: w, msss, d plls s s d dsp sd b wk-s
.
T ss w s b ms pm
d, w m s b sk
m s w d w bls,
lm w sd pss k-
, d dspsl ws w m
k pss. T sk dw -
m m k s b sbj
s db. Sm ml ds q ld sp
s d mls w sppls, wl -
mps m l slld
12 “T SEAB Sl Gs Pd Sbmm Sd N-D Rp,” Nl Gs Sbmm S E Ads Bd, Nmb 18, 2011. p.3. (SEAB, 2011)
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E N E R G Y S E C U R I T Y I N I T I A T I V E
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wll ss mbd w dp k
ps—ms w m sd
b w bl—mk pss
s dk w sppls.
W d msss, mj s s
b l lks l s, “-
msss,” l s, d
. T l ss s pl
l dlpms sm sl l pls,
s s Bkk d Nb. A b ss,
pd l qs pd
l lms ssd l s. G
s -l lqds pd d
p dlpm s lds, -
s d sp s ss-
d s s b dql dlpd. T
sl s l ms s b d.
I N Dk, m Bkk sl l
ld, l 30 p s pdd—
3 b p m—s l d; p-
d s m pd Nb
sl m sddls Cld, W-
m d Nbsk s sdd b ds x-
ps b m .13 T s
pd dlpm NGL- sl pls,
s s El Fd d U, m smll sl ssd d s, w s lss
lbl NGLs.
O ml sss b sd
b pps k ld pssbl
lk bw k d ssm dsp,
d sss pl “ mm”
w k ps w
xs l l s, ld
sk dw m. T
ls s dspsl wsw
j wlls m s ssm dsp-
s. T sl lk bw k-ld
psss d sd ssm s
b pd d s sbj s-
.
Regulatory Oversight or Natural GasProduction
A s d dl m s
jsd k d sps
l s dlpm, d x
w, d ws w, s s m-
plm ls sl s pd wll
mj mp bl xps.
Environmental Protection Agency
T Eml P A (EPA) s
mb s s ppl
l sl s pd, ld -
s ml ss d plls
lsd ( Cl A A)
d w sppls kp m ws
w m lks ( Cl
W A d S Dk W A). Tppl s EPA d sl
s pd l w smp,
m, d s.14 Ow pss
2005 E Pl A, EPA’s l-
dd j ds l
k d S Dk W A s
lmd s ps s dsl-bsd
k ds. Hw, s ddss-
ss k
s s.
13 Fm “D’s C” b N Dk Idsl Cmmss Dpm Ml Rss, Jl 21, 2011. (ps://www.dm.d./ls/ds/ds-2011-07-21.pd )
14 I Nmb 2011, EPA lsd s pl sd, qs Css, mps dl w ss. Tp ss “m s b dl pl sks dk w ss, l sss b sd.” (“Pl Sd Pl Imps Hdl F Dk W Rss,” U.S. Eml PA, Nmb 2011. p. .)
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As qd b Css, EPA s b
sd sl s d k ss
s w s: w wdwls,
s splls k ds, mps j-
dk w, mps wbk d
pdd w, d wsw m d
dspsl. T sls sd d b
d 2014, w m p sdld
ls 2012. I Ob 2011, EPA
d wld s Cl W A
l dspsl ws w pdd b
k. T s l d ds-
sss w s sklds d wll
ppsd l b 2014.15
T EPA s ls l d wll
s x Sbss Cl A (SCA)
“[] ppsd lmk pss …
b d ml sbss d mxs
sd dl .”16 Akwld
sm ss ld s p,
EPA d wld mplm,
dpl, s s d wld p-
d “ p” ml m-
pds sd k ds.
I Dmb 2011, EPA lsd df l-ss d m s d
w ql Pll, Wm. T df
p ds d w q
d w d “mpds lkl s-
sd w s pd ps ld
dl ,” d ml smpls
w “ll blw sblsd l d
s sdds.”17 T df p, w,
m w, s pbl mm d p
w pd, s lzd pps k-
. Rspss m s ds pss
s lsss ds d
pssbl l sm
mls dsd smpls.
I dd s s w, EPA s s-
l s s ql d pll-
. I Jl 2011, ppsd ls l
plls m k-ld ps
dd sl m l-
l mpd (VOC) msss m
mpl dlll d l d
s wlls; llw xs pbl
mm pd Ob 2011, l ls
xpd Apl 2012.
T EPA’s l sl s dlpm s
mpld b lk l d d-
“k.” Sm ds ps-
s p w z m,
mps l pss ds ps-
s s ks dp, wl m-
ls d lds
ll k-ld ps ld
dll wlls, sll ss, d
m d dspsl ws w d m-
ls. T ms ds b-
d sp s p. Hw, s l
EPA d d l k wll s pl
sbl d p sl s dlpm,
d sbl xps. A -
b k wld s dw -
l s ds, wl ddl
ss m l ld mk ml sl
s psps m, d sz
mll bl s. Cs-
l, wll dlpd ls, pssbl bsd
ssbl bs p, ld pd b
pbl, m d ds.
15 “Nl Gs Ex—Hdl F,” U.S. Eml P A. (p://www.p./dl/ ).16 L m Sp Ows, Asss Adms, U.S. Eml P A, Db Gldb, Ejs,
Nmb 23, 2011. (p://www.p./pp/ms/pbs/EPA-L--Ejs--SCA-P.pd )17 “EPA Rlss Df Fds Pll, Wm Gd W Is Pbl Cmm d Idpd S Rw,”
Eml P A, Nmb 8, 2011
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Bureau o Land Management
T B Ld Mm (BLM) w-
U.S. Dpm I ss
dlpm l d s ss Fd-
l ld. Wl BLM ds d pp
“” k ps, s ps
ms b pd B b mps
m w 30 ds. N-
k ps q p ppl b
B. Hw, s w EPA’s s
k, s l d w
ss “” - p-
. Cl, BLM mmds d -
s bs ld d w mm ps
sl s pd. S I
K Slz s ls pbll sd -
sd pssbl ls dsls
mls sd k dl lds.
Regional and State-Level Regulation
As l-sl sl s pd s ll
w pm, sl sps l-
m—ld sss dl-ss-
s jsd— b sld. C-
l, ms ss mplm w l- qms l d s pd w
EPA spsbl s
sl s pd ms l sdds
, ds, d w smp d m.
Wl m mps d
l s ss ps,
ddd p w dl
s ls sld jsd
m: sm k mps dl -
s wld s sl s pd, wl
s s psp sl s l- qms s pbl pwk
s-ll ls.
Sm bl s- d l-ll l
sl s pd lds:
• T xs Rld Cmmss’s J
2011 lsl qs dl-
pm ls md
dsls mps ds
sd dl .18
• A mmm b Psl G-
m Cb Ob 2011
mplm mmds
s’s Mlls Sl Ads
Cmmss, ld pss x-
d lbl pds, s m-
p s, d s ds
sl-s wlls m p d pbl
bds w.
• Nw Yk’s mp mm
k, w ld w k p-
s s. T G’s -
s p wd df m-
l mp sd pbl mm,
sls w wll m ds
w pm k
w sp xmps.
• Ws V’s J Sl Cmm
Mlls Sl’s pss bll
ss dll pm s, w -
sd s lld
m wll sps. T bll, w
ls ls w ms mps
s ws dm pp-
, d mmm dss bw
wlls m ms d dk w,
sll ds b d b ll slsl.
18 Bll H.B. N. 3328, “A A l dsls mps dl ds sd dl ms,” 82d Lsl, Gm S xs. (p://www.pl.s.x.s/BllLkp/Hs.spx?LSss=82R&Bll=HB3328).
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• Cld d Wm’s md
qm “ mpl”
l s wlls, w s d
ps wld sll sp
msp d mpl ps
wll pd d sld.
• T Dlw R Bs Cmmss’s
(DBRC, dl s m
mpsd bs
ss), sd w ls
l d s pd—d -
d w smp d dsps-
l—w bs. Ad
DRBC, b 36 p Mlls
Sl ls b bs.19
T mp s-ll l sl
s dlpm ws ld b SEAB
p, w mmdd sd dl
d S Rw Ol d Nl
Gs Eml Rls (SRONGER),
d Gd W P Cl, w
xs zs lp ss dlp
ls d bs p.20
O d s s w - l m d-
lpm sl s ld bs
mmsss; d mpl, w d ll
ms. T x w s lw sp-
sds ms ll-ll ls k-
d sps sl s pd wll
s b ssbl
sl-s dlpm ps.21
Enorcement and Public Perception
Isp ls pl d
sd, mp sp dss-
s d spsbl d ssbl sl s
dlpm s ss m
d pbl pp s k.
T m ds SEAB p d
“wl m ss d sl dl s -
l sps s ps,
ls s m l.”22 T p mp-
szd l ds spsbl dl-
pm sl s d lld m
“sl s ds pd z”
wld sbls bs p ps, s
m w ls, d bld pb-
l s. T l sd ws pl
s m p, w
d “sm d d ssd s
dd d xss ml mps
sl s pd d sq sk
pbl pps s d xp-
s.”23 T x w ds s
spsbl skld d sdd s d
x w pbl d k
b d wll l b
sbl d sl s dlpm d sbl U.S. LNG s xps.
Regulatory Approvals or Export Facilities
Cmps lk s xpd l-
s xp LNG m Ud Ss
d ss mb dl l -
qms. Ts ld qm
19 “Nl Gs Dll Dlw R Bs,” Dlw R Bs Cmmss. (p://www.s.j.s/db/ls.m )20 SEAB, 2011, p.3.21 F xll lss l s Mlls Sl, s Adw Blm l, “Imp sl s pl
dms d l l s mks,” C I Eml Rs, Us Mld, Ob 2011.22 SEAB, 2011.23 Ibd.
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mps sk xp z m
Dpm E’s O Fssl E
mp s sbj -
d m (FA) w Ud Ss.24
Ops lk md xs LNG mp
mls (l mps sx
s ppld xp LNG) ms b-
ppl m Fdl E Rl
Cmmss (FERC).25 (S bl 2) O dl
s l pp LNG xp
ls ld U.S. Cs Gd, d O-
Ppl S. Ud Nl E-
ml Pl A, LNG xp ls m ls
b sbj ml ws m
Eml Imp Sm, E-
ml Assssm d ms Cl
A A, Edd Sps As.26 (S Bx 1.)
Table 2: Status of Selected LNG Export Projectsto Non-FTA Countries
Facility Location Non-FTA approved
Sabine Pass Louisiana Yes
Freeport Texas No
Lake Charles Louisiana No
Dominion Cove Point Maryland No
Carib Energy NoS: U.S. Dpm E
24 Ts ds ws w b Nmb 2011 FA bw Ud Ss d K, wld’s sd ls
mp LNG.25 Ml R, Pl W. Pmk, Ld L, “U.S. Nl Gs Exps: Nw Opps, U Oms,” Cssl
Rs S, Nmb 2011. (R, Nmb 2011)26 S R, Nmb 2011 xm dl ls d ppls dd b LNG xps.27 m C d P Rbs, “N d : Iss N Am l s mk” Dl
C E Sls, Spmb 2011. (Dl, 2011)28 “T Bs Es: E Mk Fdmls Rp,” Bk E, M 19, 2010.29 K Pk, Dd Fs, d E. H Vds, “N Am Mdsm Is T 2035—A S E F,”
ps d p ppd b ICF INGAA Fd, J 28, 2011. (p://www../Fl.spx?d=14900 )30 “W 2011-12 E Mk Assssm,” Fdl E Rl Cmmss, Im N: A-3, Ob 20, 2011.
Capacity and Inrastructure Constraints
T sbl U.S. LNG xps dpds p
bl ’s l s s-
spp pd, sp,
s, d spm l s.
Pipeline and Storage Capacity
T dlpm sl s pls s lkl
pd l dms
U.S. l s mk. Isd pd-
m Mlls Sl s lkl dspl
sm sppls m Gl Cs d -
s l s Ns.27 M-
, sl sd LNG xps m
Gl Cs d, m b d
s ppls llw s w wd
Gl Cs.
mxmz m pl U.S.
sl s dwm, w xps
dms s, wll b qm s xps ’s l
l s ppl wk, pll
Mlls Sl. I 2010, M-
lls pds pdd w l
1,100 wlls dlld d ppl ss.28
ICF Il, sl, sms
3,300 ddl mls ppl wll b bl
Ns bw 2009 d 2035.29 T s
l 6 b/d FERC-ppd ppsd
ppl p wll dl s m
Mlls dmd s. M 2 b/d s p s sdld b mpl-
d b smm 2012.30 A
s w s ppl s wk
wll b dlpd qkl lqd-
pls, s s El Fd d U Sls,
ll p l s b pdd. As
ld b, s qs l s
l b d sm sl ss
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Box 1: Approval Process for Natural Gas Exports31
Ud Nl Gs A (NGA) S 3 (15 USC §717b), xp l s m Ud Ssqs zs m Dpm E’s O Fssl E d m FERC. Blw sm pms ms b ppd b l xp l s:
File application with the DOE’s Ofce o Fossil Energy or export authorization1. Iss xp z s dpd p xp b dmd ss w
pbl s. DOE ls lm m ml LNG xps (m ssspj m b lmd b lm psl ppd pjs).. A pj s dmd ss w pbl s d m xss bw
U.S. d LNG-p .b. I U.S. ds d ms w s w LNG s b xpd,
O Fssl E ms mk pbl s dm f pbls ppl Fdl Rs sk pbl mms, pss, d s -
.
File application with FERC or authorization to site, construct or operate LNG export acilities1. A ppsls s, s p ls s xp l s— md xs FERC z—ms b ppl m FERC. C s m ls -q l s m U.S. Cs Gd Dpm sp. Appdppls ssd C Pbl C d Nss.
Environmental Review and Assessment 1. B zs q l pj’s pd mp pbl d
m, d w Nl Eml Pl A (NEPA).2. A Environmental Impact Statement s dd ppsd mj dl s x-
pd signifcantly ql m. O mps dld, s-m ms b ppd b l Record o Decision b ssd.
3. Pjs w lss--s mps sll q dm. I ml mps
, Environmental Assessment ms b ppd d dm Eml Imp Sm s ss. I Eml Assssm ds pj- d sd s s ml mp, Finding o No Signifcant
Impact p s pdd.4. Pjs pd s mps ll m b pssd
s Categorical Exclusions. Ts ms s pjs d q pp Eml Imp Sm Eml Assssm.
Other Considerations1. D pps dm qd d NEPA, Dpm E d
FERC ms ls d mpl qms pplbl z.. F xmpl, ls b sdd ld Cl W A, Cl
A A, Edd Sps A, d Nl Hs Ps A. Ts m q
lm ppl s dl, s ll ll.b. Bsds ml qms, LNG xp pjs m q mpl w s
s-ld qms m s s, ld Dpm s-p’s O Ppl S (w s sd w Ppl d Hzds M-ls S Adms), Nl F P Ass, d Fdl Em Mm A.
31 Adpd m R, Nmb 2011.
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U.S. md-. O w d s -
s b sdd b Wm’s O
S Lds d Isms, w s ppsd
pl w ls pms wld
b qd m ps wlls s lds
b d m 15 ds
f mpl. Abs s s
, s pssbl dl m
wll sk l l d l s
wlls.
I dd ss ppl p,
ls s b dq
l s s s, pll
Ns, l sms pp-
l p sld pmp sml sms
sd s p.32
Drilling and Production Inrastructure
E s s sp -
s dl sd lms d w -
l bss l s pd, m
b lms m lbl qpm
d qld plm s dlp
s. d, s b s dll
lbl U.S. l s s mlzd. Hzl dll ( b l
d s) sd 27 p O-
b 2011 d mb s lld -
l l d s pd s d
lls.33 T sd pd w dll
s s ls sd s sppl s kp
p w dmd. I Hsll Sl pl
Ls, xmpl, ll m
181 s Jl 2010 110 s Ob 2011,
pd sd m 4.65 b/d
7.58 b/d d sm pd.34 A sml
d s B Sl xs,
w pd s md dsp
dl .35 Hw, wl sppl
dll s ms dq, mk
qpm d ss sd k –
pll -pss pmp qpm –
s d lkl m s m,
d ds lss.36
Human Capacity
Hm pl l l d
s dlpm ss s ls s sppl.
Ad Nl Plm Cl
(NPC), s b 75 p ds
pml-ld s llm s
1982 Ud Ss.37 M, w
x s, b 50 p wk
s ds wll b lbl m. T
dmd plm s, d
sls ds
ld, s s , w NPC w
“sdbl m s ll”
l d s ds.
38
Fl ld ss w plm-
dpms p lk -
s d dlpm (R&D) d, w
s s l p
dql ppl jbs d-
bs s. Wl sm sll pbl
R&D d s b md p b p-s
32 MI, 2011. p. 145.33 Ad Bk Hs .34 “Pd Rss B, Hsll Sls E s R Cs Fll,” Platts, Ob 11, 2011. (p://www.bk.m/
ITNws.spx#Al5402 )35 Fm w w K Mdlk, Fllw, E Sds, Jms A. Bk III Is Pbl Pl, d mmb
Bks E S I Nl Gs sk F, Nmb 15-16, 2011.36 “Cmmd Ps, S Css d Hd: A d p pl d p 2012”, Mq Eqs Rs, Nmb
11, 2011.37 “Pd Dlpm - Rlz Pl N Am’s Abd Nl Gs d Ol Rss,” Nl Plm Cl,
Spmb 15, 2011. p. 1. 38 Ibd.
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spp, dms q msm
bw sp ds ddl mp-
s d l-m ds s. M-
, s d R&D d -
s w pdd, m ls b m l
b s dq sppl plm
s mk.
Shipping Capacity
T sssl xp LNG wll dpd p
ss spp s d p-
b pl. C E s lk
xp p 2.2 b/d s m s Sb
Pss LNG ml Ls.39 Dpd
sz LNG ssl, s wld q
bw d spks p wk.
I d mmd s lm l
sps, sm dms U.S. ps wll q d-
dl dd. O spp-ld -
s ld s ssls d dq
Cs Gd p pd s
(xps ms m Cs Gd Ww
Sbl, S, d Em sdds
p ppl); d p s ls,
pll As. Is spms As
wll dpd p Pm C-
l, w s l smll mmd
ms LNG ks. Hw, f pld
xps l s mpld—xpd
b 2014—l 80 p wld’s
LNG ks wll b bl pss s-
ms, sl dm dl spp
ss As.40
39 C E’s xp pm m Dpm E llws l pd 1b/d w pssbl xps 2.2 b/d.
40 “Mdm-m Ol d Gs Mks 2010,” Il E A, 2010. p. 264.
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domESTIC dEmANd fACToRS
I
Ud Ss, pl l s xps
wll mp w w pm mks
smp l s: pw-- s d dsl s, ld
pml pd. T psps -
sd l s dmd sp,
mml d sdl ss s sl
sd sl s pd lss s.
Power Generation
Dmd l s l s
s b smld b sd sppl—
d lw ps, d b mls l-d . T EIA s-
ms l s pw pls wll
60 p w l p dds
bw 2010 d 2035.41
Nw d sd EPA ls wll pl m-
p l dm m l-
d ms l Ud
Ss, d, , mb l s
pw pls b bl. T EPA’s Css-S
A Pll Rl (CSAPR) d M dA xs Sdds (MAS) sdld
J 2012 d 2015, -
spl. CSAPR s md ll sl
dxd (SO2) d s xd (NOx) msss
m pw pls 27 U.S. ss b-
-pl pll d z d- j ss.
T MAS wll ppl zds plls
(HAPs)—ld m, d ld,
d pl m—m ll pw
pls. Ts sdds, w w ssd
Dmb 16, 2011, pjd sl 90
p d m msss. T sm
d sw ss Mxmm Abl
Cl l (MAC) l, pmld
d Cl A A, qs l-dpw pls pll ls
m, d sss d plls ql
bs 12 p p pls. O
ls ppsd b EPA ld:
• S 316b Cl W A: -
q l w k ss
Bs l Albl (BA)
mmz ml mps;
• Cl Cmbs Rsdls (CCRs): l l s d
ws b-pds dspsl;
41 EIA, Apl 2011. p. 74.
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• Gs Gs (GHG) sdds: p-
ps ls GHG msss s-
dds w d xs l -
ls.
ICF, sl s mdld s p-
l s d s md p-
js bsd EPA’s ppsd ls d
xs l pw pl , s-
ms l 40 ws (GW)—q-
l d 12 p l-d
slld p—wll b d b 2020.42
Cl pw pl ms wll b :
pls Ss d Mdws (w m
l pls ld) wll blk
d s ls ld ls -
s w l s s pdd l
lms d dsb wks b
dlpd (s F 4).
TRE
RFC
FRCC
SPP
WECC
MRO
SERC
NPCC
<5%
5-10%
10-15%
>15%
Vs mdls pjs w ds-
plm l-d wld m
l s dmd, w wll b pm
plm l. T sms s
l s dmd pw s
m 1.1 / 3.5 /. ICF pjs
s s dmd—
s w l s pw pls
s xs dl l s mbd l
(NGCC) pls—ld ql bw 1.6 d 2
/.43 Dl, sl ls s
mdls s smp, pjs s
dmd pw ld s b
s m s 10 b/d, l 3.5 /.44
Ds Bk sms l 3 b/d
s ld pl l 80 ls -
, smll, d ld l-d pw pls.45
Wl ddl dl ml pls
ml l-d pw pls lkl
42 “Dms Gs Us Pw S,” ps b J Bl ICF Bks Nl Gs sk F, As 3, 2011.A ps ICF ssssm pjd 51 GW ms, b wl ppsd ls sw m xbl lppsls, d m l pls xpd m l.
43 Ibd.44 Dl, 2011. p.5.45 “Ul Gs,” ps b Adm Smsk Ds Bk Css Bd Fm E Isss, M 13, 2010.
Figure 4: Percentage of Existing Coal Retired by Region, 2020
S: ICF Il
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b m w s pps, ms pjs
ssm s s ml l-
s wll ll b mplmd. T sl
s lkl b ddl ms ld, lss
l-d pw pls, m w
wll b pld b NGCC pw pls.
Industrial Sector
T mj pl b m
bd U.S. l s s dsl s.
T s l sms l 32 p-
l l s dmd, 85 p
w s smd m.46 Dmd
l s dsl s s pjd
w b 27 p bw 2009 d 2035.47
T dsl s s l p-ss w
sp ps. Bs l s s
pm dsk m dsl sms
s s ms pml pd-
s, dsl s ws l d b
ll l s mk l
1990s d 2000s. Ad Cssl s-
m b s x Dw Cml,
“m 1997 2008 U.S. dsl dmd ll b
22 p s l [s] ps s 167p. O sm m, dmd pw
s b 64 p. T lss U.S. m
jbs ws s…m d sw
m sx mll jbs w ls U.S.
m s s 1997.”48
T sl s bm s m dsl pd-
s d ml mps p -
s U.S. dsl d m m-
pss d pmls pd. A
Dmb 2011 p b PwsC-
ps, dd ss w Nl
Ass Ms, s s
U.S. m d sl s
dlpm d sss mll ddl
m jbs ld b d EIA’s -
sl s s ( w 50 p
m sl s s d l -
s) mpd w s lw sl
s ( w 50 p lss s d).49
A pl s s s
l pd d m
l-bsd ds Ud Ss. El-
, w s ppl mp
ds m -z s-bs,
s pdd m , bpd l
s. Cp dms l s s pdd
ml pds lbl mp d-
— d l—pd-
, pll mpd w pds E-
p w l s dd ppll m
p, l-bsd pd. Bs d l
ps dppd plll w s p-
s Ud Ss, U.S. dsl pds
s lbll mp . As sl,
mb dsl pds lk
s pls Ud Ss.
50
BMlS s p k
Ws V ( s k Mlls)
d Dw Cml d Sll Cml -
d pls xpd d p, spl,
ks Gl Cs. Ad lss
b Am Cms Cl (ACC),
ds d ss, 25 p s
sppl Ud Ss ld
sl 17,000 d w jbs ml
ds, 395,000 d jbs, d d $44
46 Ibd., p. 101.47 EIA, Apl 2011. p. 68.48 U.S. S Cmm E d Nl Rss; “T F Nl Gs,” sm G Blz, V Psd, E d
Clm C, Dw Cml; Jl 19, 2011.49 “Sl Gs: A Rss U.S. M,” PwsCps, Dmb 2011.50 “Sl Gs d Nw Pmls Ism: Bs Em, Jbs, d U.S. M,” Am Cms Cl,
M 2011. p. 19. (Am Cms Cl, M 2011)
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19
bll ddl dl, s, d ll x
10 s.51 s s
ACC psms s $16 bll
p pl, d lds ssssm
dd mps—“mplm d p sp-
pd b spd s mpld dl
dl b s.” Wl ACC ds
mk xpl ssmps b sp
U.S. l s sppl
p l s, ls ssms ssd lw
s ps, d sll l--s p
.
Wl sm lss k ss w ssmp-
s bd pjd jb- s,
s l U.S. pml d m-
s wll b pm mp d
pl b bd dms -
l s.
ransportation Sector
Nl s s ls d sbsl
m s l sp-
s. T d Nw Al-
sp G Ams Sls
(NAGAS) A 2011 ppsd lsl wld pd x s s
l s mml k s,
s sd pll LNG s
d l (HDV) .
Fdl s ld b d
ps d p mpssd -
l s (CNG) ls. T 2005 E Pl
A zd ds p 80 p
ml s ps CNG ls (
ds xpd d 2010); d dl xds 30 p s l s
m l qpm, p $1000, w
pl l d 2011. Hw, dsp
xs d ppsd pl s,
l-sl sf w m l wd l
s l s lkl m.
Wl LNG-pwd HDVs dms
mp s ss d ll s
pbk pds d mss,
ms ss q l l dls
bw sl d LNG, d mbs
l mls p lz ss b-
s wld d pbl.52 A p-
l d s sss—ld lmd , lk
xs l s, d -
ml s pmm LNG ks d
$70,000— lkl p wd-
spd s l s bs -
d s sbsds mds.53
M, m k mps dpd
k sl mk s, pll
As. W l LNG dsb -
s As, LNG ks wll b lkl
s mk p, lm-
U.S. s LNG ks.
T lsl ll l p-
p pss l ls s . Obsls ld s
( ds l s s lw
sl, q m q -
l NGVs sl-pwd s)
d l l ms NGVs
sl qls.
T psps l ls dd m s-
-lqds (GL)— pss s l
s ql mddl dslls
s s spplm sbs dsl— sp s ls .
T s p ss ssd w
51 Ibd.52 Al Kpk, “Wll Nl Gs Vls B O F?,” Rss F, M 2011. p.13.53 MI, 2011. pp. 123-124.
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20
GL pd, w 20,000 bl pd-
pl s ql $115,000 p
bl p d.54 Lqd ls pdd b GL
wld mp dl w d l-dd
ls. A sp ll d-l ps wld -
mk GL sl m. Wl
psp p d bd sl s s -
wd s GL pd Ud
Ss—w SASOL S A
pls sbl sd $10 bll pl
Ls— l ld m d sbsl
pl sm qd, w
sk mp w ll l mk, ps-
s lls GL-pds
l . Dsp s l sbl d
pbl pl, l s s U.S.
mml d pss s— s LNG,
CNG, dd m GL pd—s -
lkl s lmd w sbl
bs mj pl s.
Commercial and esidential Sector
emand
T psps sd l s s
mml d sdl ss s sl
lbl bd sl s ss
ls mds. EIA sms sw wdl
ssmps sl s pd l-
ls 2035 (5.5 / “Lw Sl EUR”
s ss 17.1/ “H Sl
EUR” s) sl ll smll s
mml d sdl s smp(0.5 d 0.3 , spl).55
54 A ClVw E Ps, LLC Wk Df.55 EIA, Apl 2011
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U.S. l s xps wll l mp w
dms ss dmd lsd b;
wll ls mp w ss s—bLNG d ppl s— lbl mk. T
dml l xp l s s
U.S. p s lw p -
mks, w l s s f psd
m xps l-m s
dxd p l, ld pp-
b. (S F 5 d
bw mj lbl l s p
bmks.)
GlobAl GAS mARkET
Figure 5: Benchmark Natural Gas Prices in the U.S., U.K. and Japan
$20
$15
$10
$5
$-
J-00 J-01 J-02 J-03 J-04 J-05 J-06 J-07 J-08 J-09 J-10 J-11
UK (NBP)
Japan LNG Imports
US Henry Hub
S: ICF Il
A wll-sppld lbl s mk wll U.S.
xps w pps xps; sm-
ll, “” s mk, w sppls lmd, wll pd m pp
U.S. xps. O dmd-sd, s xps
wll mp w l sbss
s s l, l, d l l
, d l sp. Dmd
s mps m ls b d b spd
l s dlpm ddl
s.
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T l s mk b ddd
w mj s dd N Am:
P Bs d Al Bs. B
s mks sppld b LNG spms
(m w m m Q, Ids, M-
ls, N, d Asl) s wll s b pp-
l s. E mp d xp s d
sppl d dmd ss wll
b w Ud Ss wll b
bl mp s ss sppl.
Pacifc Basin
T P Bs s sll b -
s lbl LNG mk. D
l d md-1990s, Ids d Mls -
d l l LNG xp mk,
d Jp d S K d ppx-
ml 70 p mp mk.56 d,
Figure 6: World Natural Gas Trade Flows, 2010 (in billion cubic feet)
229
311
247205
194
1,130586
427
611
1,557
1,973
4,021
346
331
191
219
565
1,288
710
385
145
3,261738
741
664
625
1,528
289
222
184
526
U.S.
Canada
Mexico
S. & Cent. America
Europe & Eurasia
Middle East
Africa
Asia Pacific
Pipeline gas
LNG
S: BP Ssl Rw Wld E 2011
Ids d Mls’s sppl dm s
b dd b m w LNG x-
ps ld Q (w s ls
lq p wld), N, d
Asl. As sl, l b Ids
d Mls w sll, spl, s-
d d d ls xps LNG 2010,
s lbl l s mk s
dwdld l 20 p, d m dl
s dms s smp ss.
Nlss, P Bs xps, w lms
xlsl s P mks, sll pj-
d s q s sl mj lq-
p dds Asl. Vs -
ss b l d l
s wll bl Asl bm s
xp m s. T lq-
pjs l d s
Asl, w pjd b l
56 “Wld LNG Rp 2010,” International Gas Union (IGU), Spmb 2011. pp. 6-9 (Il Gs U, Spmb 2011)
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b 2015.57 Asl LNG wll lkl l b bl
s P Bs mks bs s
ll -s pd LNG.
Wl b 45 p P Bs’s l
s dmd s m b LNG mps m w
, ddl 40 p s dmd
s m b LNG mps m sd ,
pml m Mddl Es d Rss.58 Q-
l d 11 p Jps
LNG mps 2010. Q pd p-
dml ss b Ep (msl
U.K.) s mk d P Bs s mk.
C d sppl lbl sp
mk s lkl b s As k d-
P Bs’s ps. Hw,
m xs sp p
LNG pd, Mddl Es wll ll
xss sppl p. Ts s p bs Q-
s ps s p s w
Es As mk d pl bs s
mm dlpm Q’s
N Fld, ls s ld wld. A-
s lmd xss sppl m
Mddl Es s Om, w s sd
ls Mddl Es LNG xp As, s
xp dl LNG xps s m ss b smd dmsll.
Gs dmd As ms s, ld b J-
p, S K, d w, w d
m l ll lbl LNG mps
2010.59 Jp, wld’s ls mp
LNG, s s pl s pjd
l s dmd s sl d
Fksm l pw pl llw
qk M 2011. T l d,
w s sd s-m sdw ms
Jp’s l s, s ls pmpd
w Jp’s l pl. T -
w ms ll dmd pbl,
w s w Jp’s l m pw-
.60 I m w m l
pw, s m Jp’s l
pd wll lkl b m b ddl LNG
spms. I s smd 2012, Jp wll
q ddl 974 b LNG mk p
l sll sl m F-
ksm d d d l
pw .61
Wl Jp s dll b l p
l s smp As, m-
s C d Id s b
s mp ss As s
mk. Al d l sppl
b s s b dmd b l,
b s xpssd s xpd-
l l s. T Il E-
A pds s dmd C
d Id m w s s s 7.7 p d 6.5p, spl, p 2035 m 2009
lls.62 O ps s, b s
bm s mps l s,
msl—xlsl, s Id—
m LNG. B C d Id md
s sms LNG s
s w sx LNG mp mls
57 “Wld E Olk 2011: A W E Gld A Gs?” Il E A , 2011. pp. 67-68. (IEA, 2011)58 “BP Ssl Rw Wld E 2011,” BP, J 2011. (BP, J 2011)59 Ibd. I s mp Ud Ss Nmb 2011 d -d m (FA) w S K s ll b
pjs b ppd xp l s l llwd xp LNG s w wm UdSs s FA. O S K, l s w s p d FA w Ud Ss Cd, Cl, Dm Rpbl, d Mx.
60 A pll Jp dmsd mj Jps pbl s ps ’s xs l s.“Jp pll ds 74% spp l ps-,” Nuclear Power Daily, J 14, 2011. (p://www.lpwdl.m/ps/Jp_pll_ds_74_spp_l_ps-_999.ml)
61 “E Clls Jp f 3.11,”ps b K Km, C Ems, Is E Ems—Jp, pm Hd Us, Ob 21, 2011, Bs, Mssss.
62 IEA, 2011. p. 23.
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l d s C d w
Id (w xs ml ls d
xps), d m xpd .
I dd LNG mps, C mps
s m kms ppl s-
s Uzbks d Kzks, s pss
dlp ppl w
Mm, d s l b d dss-
ss w Rss pl ppl -
. Id, w ds l s
ppl w , s wk
lz s l ppl pjs,
m kms, Mm, Om, d I.
Hw dmd s s s -
s w wll dpd mb s,
ld p m w, pl-
s sbs ls—pml l, l
pw, d l—d spd d sl w
l s b dlpd. Wl l
d l wll mk p l p
mx, l s dmd s pjd
s sdl, pmp d m
sm mps d spp dms-
pd, pll l
s. T EIA’s lbl sm sl
s ss sss Id d C l 63 d 1,275 sl s ss,
spl.63 F b s, sms
l s smld l
s l s pd; C
s pj 50 p s l s -
smp 2050 wll m m l
ss. Dlp s ss, w,
wll k m. T l d pl -
m b s wll d b mdd
mmd sl s pd d d-
dss sss ld dl , s sw smp, m, d dspsl. T
x w l s ps dld
wll ls b w qkl dms
sl s wll b pdd s pd m-
ps wll q m s b
d ss pd. Sl s pd wll
ls q l p d psl -
s, b w l s
sppl b C d Id. T m -
s pll b ddssd Cs
d Id sms N Am sl
pls. T l wll q s
, pll s ppl wks
b C d Id dql dlpd
d s sm lm p-
s ms l.64 I b s, -
, l-sl sl s dlpm s lkl
b md--l m pps.
Export Feasibility to the Pacifc Basin
Ow w s dmd, lmd dms-
sppl, d m d d xps p-
s, As pss --mdm
m pp l s xps m
Ud Ss. T xps Pm C-
l b 2014 wll llw LNG ks s
sms, b mp ms
U.S. Gl Cs LNG spms Es d
S As mks d pll llw s spp m Gl
Cs U.K. Ts wld mk U.S. xps
mp w Mddl Es d As-
l LNG xps .
Hw, lls d s m
b dmd d sppl sd. T dlp-
m ds l s C
Id m s l
s, dmp dmd LNG mps
. A sm Jp m s l pw sd
l pd; ll, --
xpd p l Jps
63 “Wld Sl Gs Rss: A Il Assssm 14 Rs Osd Ud Ss,” U.S. E Im Adms, Apl2011. p. 4. (EIA, Apl 2011b)
64 Ad p m Bs Rs, sl, Jl 7, 2011.
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l s wld sppss s dmd.
A s Asl LNG pd-
sl Q mm
s dlpm ld dsp sp-
pl pjs, s ld ds w
l l ss. F
s, Dmb 29, 2010, Nbl E,
U.S. l d s xpl mp, ds-
d smd 16 s Isl’s s
L s ld. S , s
Es Md xpl
pll smll l s lds. I Nm-
b 2011, Adk Plm pd l
l s ds Mzmbq, pmp
l s bld s lq
p Ss A . F-
ll, xps LNG xp p m
Alsk d dlpm LNG xp -
p Ws Cd m pd s
s mp U.S. Gl-s
LNG. Al Alsk’s K LNG xp -
l, w s b xp smll q-
s LNG Ns As 40 s,
s b dld mpl, pps sm
mps dmsd s l-
sl xps LNG m Alsk Es As.
Ad FERC, l Cd xp ls d sd
Bs Clmb: ppsd 1.4 b/d -
ml Km (l pd wld s
0.7 b/d), w d 20- xp
ls Ob 2011; ppsd 0.25 b/d
l Dls Isld; d pl 1 b/
d l P Rp Isld. G
mpbl lw s Cd l s
l U.S. s d lw sp
ss (s sl s ds—LNG
spms m Alsk Km Jp wld
k l 8-9 ds, mpd m 20
ds m U.S. Gl Cs P-
m Cl), Alsk d Cd xps m
p b s s mp
m U.S. LNG P Bs.
Atlantic Basin
T Al Bs mpss pdml
s mks Ep, pll Ep
U. O Sp d Ud K-
dm, w mp 76 p d 35 p
l s m LNG, spl,
ms Ep s dpd pp-
l mps m Rss, Nw, d Al.
Al, Q, d N ppl LNG
xps .65 M dss-
s l s mps ss Rss p-
d d sl Rss s Ep
sms , l-dxd ps. Dsp
dls Rss’s w ls l s lds
(U d Ymb), s l s pd-
s pjd s b l -d
bw 2010 d 2035.66 Ad I-
l E A, xps m Rss
wll s b l 67 p smpd, w m w m m -
sd ppl d LNG xps As.67 N-
w s ls l pd l s
Ep d s pd s pjd s
x w dds b pl-
.68 Hw, s wll mps
pps dl dms pd
U.K. d Nlds, w sll sb-
sl pds l s.69
65 BP, J 2011.66 IEA, Nmb 2011. p. 306.67 Ibd., p. 312.68 Ibd., p. 165.69 I s mp l U.K. pd s dl, xps m U.K. l Ep
I ppl bw U.K. d Blm s. (“Rl Ep Gs?” ps b P Nël,Us Cmbd El Pl Rs Gp E Pl D Fb 24, 2011 Cmbd, U.K.
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As sl, pps
l l s m Rss wll -
. (T mmss Nd Sm
ppl, s ppl dl s
Rss w EU, dls s lsp.)
Rss s b 31 p Ep’s
l s mps.70 Wl s l s
lsp bw Rss d Ep -
sms wll , p lsp b-
w w ps wll dm w m
s wll b mpd, d w
wll b pp U.S. LNG xps.
Hsll, ms Rss s xps Ep
dpd b l-m s w s
sld l-dxd ps. Hw, w w
LNG s psl dsd U.S. w
lbl lbl mk, s b
s sp-mk d s—w -
sms sm ss d m m
p pls -p s d
b l sppls LNG. T sl s
b sd pss p Rss
s xps d sd mk pw
p sms l-dxd -
s w Gzpm, Rss s-wd
s mp. Gzpm s d
sm s w s sms, pml Gm; w s mb b
ss d w d pps l -
ms l mb s -
s. M, Gm’s ds
l ps- s xs
l s, s s lkld
m sl l s wll b
md p sd l s smp-
, b spp dmd d s ps.
I dd Rss mps, Ep s lk-l s s LNG mps. Dsp
xss s p—mls
42 p ld 2009—w s-
ls pld mb Ep
s.71 I s dlpms dd-
LNG mp p, sm l
ppl s d sd xp-
dlpm dls. M -
s ppsd ppls m Mddl Es, C-
l As d Rss, (Nb d S Sm,
s) sdd dl
ms l d lsl bsls
d xpd b mpld
m. Hw, sm lss d pp-
l s, s s I
G Il (IGI) ppl d s-Ad
Ppl (AP) m lkl md-m.
B IGI d AP ppls wld s-
p s m Azbj’s S Dz s ld
l Ep k, w x-
s S Cd Ppl (SCP) ds.
As s s As, l s dl-
pm Ep m pl l l -
Al Bs s mk. G Es-
Ep’s dpd Rss l
s sppl, psp sl s ss s
l pl m b s , b ls pl pll s-
s. Uk d Pld—w smd 42
d 187 sl s ss, spl—
b pll sd dlp
sl s sss. Hw, sml -
l s dlpm As, l
d s bsls wll mk l-sl
sl s pd -m dl.
M, pks Ep s
pbl pps sl s pd E-
p, w m dlpm d-ms ss sm s d s.72
70 BP, J 2011.71 Ak Hé, European Natural Gas Demand, Supply, and Pricing: Cycles, Seasons, and the Impact o LNG Price Arbitrage, Oxd Is
E Sds, (Oxd, UK: Oxd Us Pss, 2010). p. 167.72 A Ep Am Gs C Ps Nmb 15-16, m spks sd pbl pps dl
s d sl s pd Ep. (“Sl s dlpm b slw m, spks w,” Platts Oil &Gas Journal, Nmb 28, 2011.)
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Evaluating thE ProsPEcts for incrEasEd ExPorts of liquEfiEd natural gas from thE unitEd statEs
27
France has banned hydraulic racturing and some
environmental and public opposition groups
are looking or sweeping, continental legislation
against shale gas production.
Export Feasibility to the Atlantic Basin
Te prospect or U.S.-origin exports to the Atlan-
tic Basin rests on a range o actors. It primarily
depends on the availability o pipeline gas rom
Russia, Algeria, and Norway and the availability
o LNG rom Algeria, Nigeria, and Qatar. It also
depends on the demand or gas in the electric-
ity sector. Germany’s decision to accelerate the
phase-out o its nuclear reactors was copied by
Switzerland, which decided to phase out its nu-
clear reactors, and Italy, which decided against
building new reactors. In the case o Italy, much
o this demand will thereore be met by natural
gas. A similar decision in France, a country that
currently generates more than three-quarters o
its electricity rom nuclear power but which is in
the midst o a presidential election where nuclear
energy policy is one o the primary issues, would
result in a signicant demand disruption or the
Atlantic Basin. Te development o gas transpor-
tation inrastructure—both within the continentand with outside suppliers in Russia, the Middle
East, and North Arica—will also have an impact
on the prospect or LNG imports rom the United
States. With a greater diversity o gas supply lead-
ing to lower spot prices in Europe, the opportu-
nity or LNG arbitrage o U.S. gas into the region
is lower than in the Pacic Basin. Moreover, with
the expansion o the Panama Canal, U.S. exports
rom the Gul o Mexico would not only benet
rom higher Asian prices but also rom shorter
shipping times. Lastly, the potential or Atlantic
Basin shale gas development will have a signi-
cant bearing on the long-term prospect or LNG
imports to the European continent.
Central and Latin American Gas Markets
In addition the Pacic and Atlantic basins, there
are several smaller LNG export options or U.S.
sourced-natural gas in the Caribbean, Mexico,
and Chile. Many o the Caribbean nations cur-
rently burn rened oil products or power genera-
tion, which is becoming increasingly expensive as
oil prices rise. o diversiy its energy mix, Jamaica
is considering the construction o a foating LNG
terminal; other Caribbean nations may ollow. In
addition to these smaller markets, both Mexico
and Chile are potential markets or U.S. natu-
ral gas. While an increase in exports to Mexico
would likely come via pipeline rom exas, Chile
represents a potential opportunity or LNG im-
ports rom the United States. Chile, which has
a ree-trade agreement with the United States,
currently imports more than 90 percent o its
natural gas in the orm o LNG (83 percent o
which came rom Equatorial Guinea, Egypt, andrinidad and obago in 2010).73 One actor that
would impact Chile’s natural gas imports will be
the development o shale gas in Argentina. Te
EIA estimates that Argentina’s shale gas reserves
are 774 tc—the third largest shale gas reserves in
the world.74 I Argentina develops this resource in
a timely manner, one logical export destination
would be Chile, thereby reducing Chile’s potential
LNG import needs.
73 BP, June 2011.74 EIA, April 2011b.
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E N E R G Y S E C U R I T Y I N I T I A T I V E
EALUAING E PSPECS INCEASE EPS LIUEIE NAUAL GAS M E UNIE SAES
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ECoNomICS ANd f INANCING
T
dml m ll
l s xps s p dl
bw dms s d ssmks. M sss lsd ps
ss b p d-
ms s. Hw, xps msls ls
lkl p l s
s ps ddl s dmd.
T x w p s s w
s sppl d dmd s s m sp-
l, d pssbl xps ld
dms l s ps sd
pd lms s l mp.
Eects o Exports on omestic Prices
O l , s dmd
—d p —dms -
l s s lkl s sppl. Sl lss
mpd mdl U.S. sppl
d p ls l s sppl.
A 2010 lss b N Csl smd
xps 2 b/d wld sl -
s dms l s ps b $0.49 p
MMBU b 2035. A 2011 sd b ICF smd xps l s 2 b/d d 6 b/
d wld s H Hb l s ps
b $0.22 d 0.64 p MMBU bw 2015 d
2035. I Nmb 2011, Dl lsd -
m lss bsd s Wld Gs Mdl
swd mp LNG xps 6 b/d b s p -
l s ps $0.12 p MMBU bw 2016
d 2035, spd 1.7 p s
mpd p
m pd $7.06 p MMBU. T Dl
lss swd mp 6 b/d
U.S. LNG xps pw- s wld
b lss “q smll” mp l s
ps l. T dms d -
l mpls s U.S LNG
xps wll b s sd l spj; w, s l x w
LNG xps p dms l
s wll b sbl.
ther Costs
I dd s dsk,
sl ddl xd ss ms b k
sd w ssss m
sbl LNG xps, ld s lq-
, sp, d s. Ts ddd lq ls
s bw $2 bll d $8 bll , d-
pd p.75 I d s
75 R, Nmb 2011.
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s ls mps lk xp s
ms pl l-m s
sl LNG.
sp ss dpd sz s-
sl sd m LNG, s spp
l, d ds s l.
Rs b spsbl
sppl d sp-
ms . Wl ddl ss
s sz, ll ds,
d l ss, MI pds pl pl
s s LNG sppl :
MMB s, sms lq ss
$2.15, spp ss d $1.25 (dpd
l ss d sp ds), d
s ss $0.70.76 I s ls mp
sd mps sd xp-
LNG wll d s p spd
wll d m ls 10 12 s,
bd p-pl d l s.
76 MI, 2011. p. 25.
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D b ll bks
l s pd, mj -
ss N Am l s -
ss d pd ld sppl w
sl p ss s.
As sl, l s pds b lk-
w d ddl ss dmd
bsb xss sppl. Dms s
s l s s d pw s-
, sp s, d dsl
d pml ss. Hw, l,
s b s s dlp
l-sl l s xp p,
m lqd l s (LNG) xps
m sl lq mls
m ppl xps Mx d Cd.
Wl Ud Ss ld xps md-
s qs l s, b LNG d
ppl, ppsls, sm w
d pl ppl m dl -m, wld m s s m sbs-
ll. T s w db bw pl-
mks, ds, d lss s
ms xp qs U.S. -
l s. Sm dms l s sms
d xp U.S. s wld sl
SUmmARY ANd CoNClUSIoNS
s dms l s ps d -
ps bssss d s-
lds. Pps l s xps
wld pd lbl x
d wld b s m w d
jb .
Domestic supply actors: F xps b s-
bl, mb dms sppl ms b
m. Fs, dq ss ms b lbl
d pd ms b ssbl
l-m. Sd, l d pl
m wll d b bl -
l s pd s ss
dlpd. Td, p d s
qd bl xps ms b pl: s
lds p d lss ppl
d s wk, lbl spp
p, d lbl qpm
pd d qld s.
• G mp sl s
d dms l s
pd, m dms sp-
pl dsss ss lbl-
sl s d ssbl
s pd. Wl ms ssssms
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’s sl s ss
l, sll mb -
s ssbl
sl s pd. T mpm
sl s dll ls , d
s, b bl mp wll pd-
. Csl, dsplm s
m “d” s pls m lbl, lq-
ds- pls m b dms d
s pd. Wl s s b
d, d m
s w m d s pls m,
, mp dms pd.
• Rls d plmks d
kp p w w sl s
. T EPA, BLM, d sl -
l d s-ll ls ll
spsbls mp
s sl s pd ds
sl ml dm d
ps pbl’s ss. Bs
sl sl s pd s l-
l w pm, d bs
pss s w-s, s d
sbsl pbl . F -
ls pls—pssbl smmm pbl pps ps sl
s—m s mp
sl s pd.
• Is d psl d m
p ms b lbl ssd
sl s pd d, , x-
ps . Dms ppl d
s s ms d-
q p sm, dsb, d
s w s ss; ps ms p b l LNG ssls;
Cs Gd ms s -
p pl sd LNG ;
d ms b ss lbl
s d s. T d-
q lbl qld plm
s d ps sl d -
l p qpm wll ls b
mp .
Domestic demand actors: Exps l s
wld ps ddl s dmd
dms sppls. I s sp, wll
mp w w m d ss l
s: pw- s, d ds-
l d pml s. T sp
s d mml d sdl s
wll pd lss mp.
• Ad m pjs, U.S.
l s wll s sd d-
md l s s sks mpl
w pls d ls md
d b-dxd msss d
plls m pw-
. Wl sf m l s s
b sdl sl s
s ls p s msss
l, xs pll slm
Fdl pl mk d -
m ds mpd
sm -m pjs
l pw pl ms. T x w s ls s p
pw s ll dpds
d w qkl w ml
ls wll b mplmd.
• T dsl s s ls b l-
zd b psp bd l-
ms xps sl s. Cp
l s dsl s s
pl lw s p-
ml pd d mp mpss
d m ps. Nl
s-dpd ms -
p pl s dms
mp d w mpd
w -s pds Ep d
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32
pld pd lw
l s ps wll psp,
jbs, d m l Am’s
dl dsl s.
• Ads l s s
sp —pll
-d ls (HDVs)—s s
w ds ’s dp-
d l. T ppl s s sb-
s l s sld mb
pls d s pm -
l s p l .
Y, wl l s sp-
js sm pll bk,
s sm s l d -
m dls, b CNG pss
ls d LNG -d ls.
Ts lls mk lkl
sp s wll s
s s dmd l
s - mdm m.
International Market Dynamics: F sd
U.S. LNG xps b sbl, wll d
b mp w sppls m ss.
T mj dmd s wld mpU.S. LNG wld b P Bs sms
(Jp, S K, d w, d s-
l C d Id), d Al Bs -
sms, msl Ep d Ud Kdm.
• T P Bs s l b -
s LNG mk. T mj
pds (Ids d Mls) d
mj sms (Jp d S
K) d mj
lbl LNG d. W s p LNG lq d
s p d wld,
s s . d, Jp
d s P Bs LNG m-
ps l lss Ss As
d m wm LNG xp
pws Q d Asl. T m-
C d Id s l dmd
s s ds P
Bs wll m l lbl
s mk. C d Id, s wll s
s P Bs, wll b -
sl ssbl U.S. Gl Cs
xps p xps Pm
Cl, xpd 2014.
• T Al Bs, w s msl m-
psd Cl Ep d
Ud Kdm, s l dpd
ppl mps l s m
Rss d Nw, d LNG mps
m Q d Al. Rss, w
s l -d ll E-
p s mps, l xps s
, l-dxd ps. Ts p
wll lkl s Gm dmd
s ss llw s ds
ps l pw d s pd-
dls Nlds d
U.K. Hw, Rss s d -
sm s l-dxd ps w
Ep d lbl spls
LNG s w dsd Ud Ss. Rss -
s llw mj pd-
s, ld Q d Nw, w
sw p xbl.
• T sppl d dmd bl
Al d P Bss d -
sbl l s xps m
Ud Ss dpd l
lk l -
l pd. R ssss-ms s s s C, Id,
Uk, d Pld d
s s dms sl s
ss. I s ss dlpd
l—w s lkl b dl
s-m d lk -
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s, psl p, d l
p—m s s wld
dmll ds mp d-
pd, w mpls
xs d wm LNG xps.
Economic considerations: T l -
l s xps m Ud Ss s bsd
b pp xps
p U.S. l s m xps
dmd mks, w l s s pd
l-dxd s. T ls mp s
s s dms p l s. El
lss sss xps p 6 b/d
wll mds mps dms ps.
O ddl ss ld ss l
s lq d sp, d l-
bl .
Final Report
Ts p pss mdp Bks ESI sd d l lks sbl U.S. l s xps. I ds mk pl
psps mmds. Pl mmds wll b
l p d wll sd b sbl U.S. l s xps
d mpls, ld mp xps dms l
s ps, dms s dmd, d pll lsps.