Economic Impacts of Increased U.S. Exports of Natural Gas: An Energy System Perspective

Kemal Sarıca and Wallace Tyner
Additional contact information
Kemal Sarıca: Industrial Engineering Department, Işık University, İstanbul 34980, Turkey

Energies, 2016, vol. 9, issue 6, 1-16

Abstract: With the recent shale gas boom, the U.S. is expected to have very large natural gas resources. In this respect, the key question is would it be better to rely completely on free market resource allocations which would lead to large exports of natural gas or to limit natural gas exports so that more could be used in the U.S.. After accounting for the cost of liquefying the natural gas and shipping it to foreign markets, the current price difference leaves room for considerable profit to producers from exports. In addition, there is a large domestic demand for natural gas from various sectors such as electricity generation, industrial applications, and the transportation sector etc. A hybrid modeling approach has been carried out using our version of the well-known MARket ALlocation (MARKAL)-Macro model to keep bottom-up model richness with macro effects to incorporate price and gross domestic product (GDP) feedbacks. One of the conclusion of this study is that permitting higher natural gas export levels leads to a small reduction in GDP (0.04%–0.17%). Higher exports also increases U.S. greenhouse gas (GHG) emissions and electricity prices (1.1%–7.2%). We also evaluate the impacts of natural gas exports in the presence of a Clean Energy Standard (CES) for electricity. In this case, the GDP impacts are similar, but the electricity and transport sector impacts are different.

Keywords: U.S. natural gas export policy; MARket ALlocation (MARKAL)-Macro (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/1996-1073/9/6/401/pdf (application/pdf)
https://www.mdpi.com/1996-1073/9/6/401/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:9:y:2016:i:6:p:401-:d:70817

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().