Why Downeast LNG as an Export Project?

Because of the rapid development of natural gas supplies from shale gas deposits across the US and Canada, the domestic production of natural gas was quickly out-stripping domestic demand. The numbers indicated that the US was producing more natural gas than could be domestically consumed thus making it inevitable that US would become a net exporter of natural gas. Consequently, the Department of Energy’s Office of Fossil Energy has commissioned studies to analyze the impact that the exportation of natural gas would have on the US energy market and economy.

The results of these studies indicate that the US has a net economic benefit due to LNG exports from the US. The modeled scenarios in the studies also indicate that the benefits to the US economy increased as the volume of LNG exports increased. Additional studies conducted by independent parties have verified these projections.

Downeast LNG commissioned an independent economic analysis of the impact of the terminal as a bi-directional facility. The study indicated during the three-year construction period of the project, the statewide economic impact (not including labor income) would be an estimated $970 million in output and the impact on Washington County would be $440 million. During operations, the annual statewide economic impact would be an estimated $68 million and the annual impact for Washington County would be $46.4 million. For labor income during the three-year construction period, the statewide impact would be a total of $375 million and the impact for Washington County would be $177 million. For the annual labor income once the facility becomes operational, the statewide impact would be $21.6 million and the impact for Washington County would be $14.0 million.

Because of the increasing demand for natural gas as well as the increasing constraints on the capability of delivering the volumes of gas required, several pipelines are proposing major expansions to their systems into New England. Downeast LNG will have a dedicated pipeline supply from either Canada or the US that will operate at nearly 100% capacity to supply the gas for export. The dedicated supply pipeline means that the gas volumes for the Downeast LNG project will not interfere or impact the supply of natural gas going to industrial, commercial, or residential users elsewhere in New England. Consequently, the export of natural gas form the Downeast LNG terminal is not expected to have any impact on the supplies or the cost of natural gas to endusers in New England.

Additional Information :

EIA Effect of Increased Natural Gas Exports on Domestic Energy Markets, January 2012
pdf   Macroeconomic Impacts of LNG Exports from the United States, December 2012
  State and Local Economic Impacts Of A Proposed Bi-Directional LNG Terminal In Washington County, Maine, May 2014
  Evaluation of the Impact of Downeast LNG on NE NG Markets, May 2014
  FAQ: "The Gas Market in New England" section

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