Over the past few weeks, President Obama has made comments that seemed to signal his support for expanding LNG exports - a welcome gesture delineating a business forward attitude that will boost our economy and make our nation more energy secure. During a meeting with business leaders in Costa Rica, the President said "I’ve got to make... an executive decision broadly about whether or not we export liquefied natural gas... But I can assure you that once I make that decision, then factoring in how we can use that to facilitate lower costs in the hemisphere and in Central America will be on my agenda." Why is this important to communities across the country? In simplistic terms, it means job creation and economic growth in the US including in predominately African American communities.
For those who aren’t familiar with the abbreviation LNG, it stands for Liquefied Natural Gas which is basically natural gas put into liquid form through a cooling process. This process allows for the safe and efficient transportation of natural gas to and from terminals around the world. LNG is popular because natural gas is the cleanest of all the fossil fuels and it’s a highly abundant resource.
In the energy industry, LNG is viewed as a game changer because this energy resource allows for economic growth and huge opportunities for job creation. Natural gas has already been credited with creating a large number of American jobs, and experts forecast that by expanding LNG exports this job growth trend can continue well into the future. A new study by ICF International looked specifically at this issue. Across all the scenarios examined, it found there to be significant net job creation from allowing the export of LNG. In its most optimistic case, net job creation from exporting LNG could reach as many as 452,000 new jobs by 2035, 76,800 of which would come in manufacturing alone. In our stalled American economic recovery, those numbers are nothing to sneeze at.
Natural gas production has hit a small speed bump recently due to extremely low natural gas prices. This deceleration in production levels comes as no surprise however as natural gas production increased a staggering 27 percent from 2005 to 2011 according to a new study on natural gas from the Small Business & Entrepreneurship Council.
So how does America get back to the days of robust natural gas production and job creation that were seen from 2005-2011? Simple. Encourage LNG exports. By increasing exports of natural gas the U.S. will create a market for excess supply. Domestic natural gas prices will remain affordable and job growth in the energy industry will continue higher. The author of SBE Council’s natural gas study, economist Raymond J. Keating, explains the natural gas situation best.
"The tremendous increase in domestic natural gas production has been a boon for small business and job growth in the energy sector in recent years. Looking ahead, growth opportunities for small businesses and employment in the U.S. energy sector look bright due to increased natural gas demand, including in international markets."
Another recent report, this one from Moody’s Investor Service, shows the U.S. is in a good position to become a top exporter of LNG in a few years thanks to new facilities that can transport natural gas shipments to Asia. It’s believed that between now and 2020 the U.S. will be competing with the likes of Canada and Australia.
So what does this all mean for families and communities here in America? Much needed jobs and economic growth. These positive reports from SBE Council and Moody’s on natural gas come as good news particularly in the wake of the Labor Department’s April jobs report. The April job numbers showed a small drop in the overall U.S. unemployment rate, down to 7.5 from 7.6 percent, yet the African-American rate remained unchanged at 13.2 percent.
Fortunately three of the four American LNG terminals expected to come online in the not too distant future are located in Louisiana and Maryland, both states with significant African American populations. These states will benefit from new investment, new jobs and increased tax revenue.
With an anemic economy, America needs to grab this opportunity to promote a real economic recovery and put people back to work. Public policies that support natural gas production and LNG exports will be vital to putting our economy on the right path. So let’s move forward on LNG exports.
Harry C. Alford is the co-founder, President and CEO of the National Black Chamber of Commerce.