A new study from the Department of Energy (DOE) finds that U.S. liquefied natural gas (LNG) exports will benefit U.S. economic performance, even in the most “extreme scenarios.” The study also concludes that increased LNG exports would have minimal impact on domestic natural gas prices. These findings not only contradict arguments made in opposition of exports, they reinforce the fact that LNG exports will be a boon for the American economy for decades to come.

According to the study, which was conducted by NERA Economic Consulting on behalf of DOE, increasing LNG exports would provide a range of positive benefits on the American economy. Notably, while much of the argument around LNG export growth is focused on how it would impact natural gas intensive industries, this analysis also addresses the effect on average households.

To that end, the report finds that all scenarios examined are “welfare-improving for the average U.S. household.” As the study elaborates:

“U.S. households receive income from several sources with increased LNG exports. They receive labor income when they work and income from capital and resources they own. These sources provide consumers with additional income to spend on goods and services. At the same time relative prices will change so that some goods will become more expensive and some less.

The report continues:

“Overall, consumers will pay lower prices for imported goods because of the wealth transfers that increase the value of the dollar. Changes in income and prices affect the purchasing power of the consumer, and the final result is a change in consumption and hence well-being of consumers.” (emphasis added)

At a national level, increasing LNG exports are likely to produce significant benefits that would outweigh potential economic drawbacks. For example, while energy intensive sectors such as petrochemical manufacturing would be more impacted by greater U.S. LNG exports than other sectors, the study concludes that such an impact would be so insignificant is would barely effect growth:

“All negatively affected sectors, and in particular the natural gas intensive sectors, continue to grow robustly at higher levels of LNG exports, albeit at slightly lower rates of increase than they would at lower levels.”

A major contributor to why potential impacts on energy intensive sectors would be minimal is because, as the study finds, about 80 percent of the increase in LNG exports stems from an increase in U.S. production, as opposed to a decrease in consumption. Satisfying exports through increased natural gas production would not only have “positive effects on labor income, output, and profits in the natural gas sector,” it would help to mitigate domestic natural gas price shocks. As the report notes:

“The results from the analysis suggest that there is no support for the concern that LNG exports would come at the expense of domestic natural gas consumption. In fact, a large share of the increase in LNG exports is supported by an increase in domestic natural gas production leading to a modest increase in natural gas prices and additional income from export revenues.”

Notably, the latest DOE data show that Henry Hub natural gas spot prices have not spiked as natural gas exports have increased dramatically since the U.S. emerged as a major LNG exporter in 2015. In fact, Henry Hub spot prices decreased 32 percent from 2014 to 2017 even as natural gas exports increased 110 percent.

With shale development driving record natural gas production, the United States has been given the unique opportunity to provide reliable energy to trade partners around the world while also bolstering domestic economic wellbeing, as the analysis concludes:

“In all scenarios with common assumptions about U.S. natural gas supply and demand, there is greater gain in GDP as the LNG export volume increases.”