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

A report by the Deloitte Center for Energy Solutions and Deloitte MarketPoint LLC


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In a startling about-face, natural gas market forces have reversed course over the past several years. Expectations that the U.S. would become a major importer of liquefied natural gas (LNG) have been replaced by the possibility of the U.S. becoming a major LNG exporter. As a result of a largely unforeseen surge in shale production, North American natural gas prices collapsed from over $10/MMBtu in 2008 to under $3/MMBtu at times during 2012. However, gas prices in Asia and Europe remain high, creating huge price spreads from the U.S. Large price spreads between the U.S. and other regions have enticed foreign buyers seeking lower cost gas to consider U.S. supplies, while U.S. producers yearn for higher prices seen in foreign markets.

Exporting the American Renaissance: Global Impacts of LNG Exports from the United States describes an objective, economic-based analysis of the potential impact of LNG exports from the United States on domestic and global markets. While much attention has focused on the impact of U.S. LNG exports on the U.S. market, this study from Deloitte MarketPoint LLC and the Deloitte Center for Energy Solutions analyzes the potential economic consequences of those exports on global markets. It attempts to estimate the potential price impacts, gas supply changes, and flow displacements if the U.S. exported a given volume of LNG to either Asia or Europe.

Key issues discussed in this report include:

  • How could U.S. LNG exports affect prices in the U.S. and global markets?
  • How much could price spreads narrow as a result of U.S. LNG exports and other market developments?
  • Which countries might benefit from U.S. LNG exports and which ones might be disadvantaged?
  • What future natural gas projects might be displaced?
  • How could a more competitive global LNG market that is less dependent on oil-indexed gas prices affect projected results?

Although these highly speculative questions depend in part on actions of parties that do not always act according to free market principles, we developed market scenarios and tested alternative market behaviors to understand key drivers and obtain a sense of the magnitude of potential outcomes. We do not present our results as predictions of market outcomes or actions of particular parties, but rather as a study of how exports might alter the economic balance in global natural gas markets.

Dive deeper into the issues by downloading the full report.

About the Deloitte Center for Energy Solutions
The Deloitte Center for Energy Solutions provides a forum for innovation, thought leadership, groundbreaking research, and industry collaboration to help companies solve the most complex energy challenges.

Through the Center, Deloitte’s Energy & Resources Group leads the debate on critical topics on the minds of executives—from the impact of legislative and regulatory policy, to operational efficiency, to sustainable and profitable growth. We provide comprehensive solutions through a global network of specialists and thought leaders.

With locations in Houston and Washington, D.C., the Deloitte Center for Energy Solutions offers interaction through seminars, roundtables and other forms of engagement, where established and growing companies can come together to learn, discuss and debate. www.deloitte.com/energysolutions.

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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