Exporting the American Renaissance: Global Impacts of LNG Exports from the United States

Deloitte Center for Energy Solutions and Deloitte MarketPoint LLC for Cheniere Energy Inc.

[Oil and Gas Financial Journal]  Deloitte has just released a new economic analysis estimating the potential worldwide economic impact of US LNG exports…The study says that global price and geopolitical implications of US LNG exports could be much more dramatic than any US price increase…

The study scenarios show complex market dynamics and clear economic impacts with potential geopolitical implications, including:

  • US LNG exports could hasten the transition away from oil price indexation of gas supply contracts.
  • Prices are projected to decrease fairly significantly in regions importing US LNG, but only marginally increase in the US.
  • US LNG exports are projected to narrow the price difference between the US and export markets and hence, the market will likely limit the  volume of economically viable US LNG exports.
  • US LNG exports are projected to provide an economic benefit to gas importing countries.
  • Gas exporting countries could suffer a decline in trade revenue due to price erosion and/or supply displacement.
  • US LNG exports could also displace some oil consumption through increased gas-fired electric power generation.

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