NM stands to benefit from LNG exports, study says
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By Rob Nikolewski │ New Mexico Watchdog
SANTA FE — New Mexico‘s natural gas suppliers think getting the United States to “go big” on exporting would be a major boost for the state economy.
A study released this week says New Mexico would see sizeable gains, relative to its size, should LNG ramp up.
, a consulting firm based in northern Virginia, put together a estimating the economic growth from expanded LNG exports from the U.S.
According to ICF’s estimates of all 50 states, the impact by 2035 for New Mexico would be the 10th-highest in the country; Alaska came in first (you can click on the chart to see it unobstructed):
ICF also estimated growth in employment by states due to LNG exporting. New Mexico finished ninth:
Natural gas prices have cratered in recent years, and the thinking goes that LNG exports would increase the amount of natural gas pumped out of U.S. rigs, thus increasing natural gas prices.
New Mexico has one of the richest supplies of natural gas in the world, and supporters of an LNG deal point to studies showing that a mere 10-cent increase in the price of natural gas translates into $10 million extra dollars to go into the state’s general fund.
It should be pointed out the ICF study was done on behalf of the , an energy trade association and lobbying outfit.
Environmentalists have opposed LNG exports because it would mean more — “fracking” — at natural gas sites.
But suppliers have lobbied the Obama administration to fast-track an LNG deal with Japan, which is actively looking worldwide for natural gas after it shut down most of its nuclear power plants after the .
Three months ago, is “working hard” to evaluate bids from individual companies to broadly export LNG in the absence of a free trade agreement.
As reported by New Mexico Watchdog earlier this year, both New Mexico U.S. senators — Tom Udall and Martin Heinrich — say they support expanding LNG exports, much to the dismay of their environmental allies.
Contact Rob Nikolewski at and follow him on Twitter @robnikolewski
Posted under Blog.
Tags: American Petroleum Institute, Ernest Moniz, fracking, Fukushima disaster, hydraulic fracturing, ICF International, liquefied natural gas, LNG, Martin Heinrich, New Mexico Watchdog, Tom Udall
6:35 pm on November 19th, 2013
How exactly does simply increasing the supply of a commodity result in a price increase? Are these clowns in VA anticipating a scenario where selling gas cheap overseas will reduce significantly domestic supplies and raise prices to consumers here? Or do they think increasing supplies will lead to lower prices overall, encouraging people to cook more food so they can make up the difference on volume? No, wait, I think I’ve got it, after moving all the in the domestic money upwards, we can pass legislation requiring banks and brokerage firms to heat all those foreclosed houses that remain vacant after they’ve flapped them into the wind? I’m sure they could deduct the cost from all the taxes they don’t pay.
10:46 am on November 20th, 2013
Dan,
I think you are missing the point entirely. We have a great supply of natural gas that has expanded greatly in recent years in large part due to new drilling techniques. What we/this report are talking about is exporting some of this excess gas supply to new markets that are currently blocked off to such exports. Increasing demand will potentially increase prices a bit. More importantly, increased demand even at relatively low prices will result in additional money flowing into the economies of producing states, including New Mexico.