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EMF SR 11: A Policy Framework for Evaluating North American Natural Gas Exports

Abstract: 
Policy makers need robust decision tools for evaluating changes to US natural gas law and regulation. Among the most critical policy debates in recent times has been whether and to what degree the US and Canadian governments should approve licenses for export of newly abundant natural gas. Also critical are numerous state-level debates on if and how to increase regulatory oversight of drilling and its environmental impacts. Vast improvements in hydraulic fracturing have ushered in a wave of less expensive natural gas that might meet gas demands both overseas and in the U.S. market There exists, however, a range of views among energy experts about how competitive North American sources will be globally and how such energy exports might strain domestic natural gas markets through higher domestic prices. We develop a transparent and tractable framework for evaluating the opportunities, challenges and impacts of LNG exports from North America to Europe, Asia and eventually South America. The framework emphasizes the need to make policy choices that are robust to the large uncertainties within natural gas markets.