Evaluating the Prospects for Increased Exports of Liquefied Natural Gas from the United States by The Brookings Institution

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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



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

[email protected]

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.





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





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





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.





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.





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.







3

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 .





4

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.





5

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.

http://www.eia.gov/todayinenergy/detail.cfm?id=770








6

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

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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.





7

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)





8

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. .)

https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2011-07-21.pdf








9

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





10

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).

http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=82R&Bill=HB3328








11

• 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.





12

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

http://www.ingaa.org/File.aspx?id=14900

http://www.ingaa.org/File.aspx?id=14900





13

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.





14

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.





15

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.





16

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.





17

• 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





18

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)





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.





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





21

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.





22

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)





23

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.

http://www.nuclearpowerdaily.com/reports/Japan_poll_finds_74_support_nuclear_phase-out_999.html








24

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.





25

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.





26

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.)




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.





28

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.





29

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.





30

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





31

’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





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 -





33

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.



Evaluating the Prospects for Increased Exports of Liquefied Natural Gas from the United States by The Brookings Institution

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