PolluterWatch Blog

Dubious LNG exports study was conducted in secret by contractor with ties to coal and oil industries

A study on the economic effects of exporting gas fracked in the US has opened the door for what Senator Ron Wyden (D-OR) and Congressman Edward Markey (D-MA) have called “a transfer of wealth from consumers to oil and gas companies.”

The study was conducted in secret by NERA, a consulting company that has a history of producing industry funded studies that obscured the health effects of tobacco and coal.

This particular study, which focuses on the economic impacts of exporting liquefied natural gas (LNG), was commissioned by the US Department of Energy, and will heavily influence the DOE’s decisions on the permitting of 15 proposed LNG export facilities.

Because of the way that exports of natural gas are regulated, the oil industry must convince the US Department of Energy that exporting America’s fracked gas is in the best interest of the country, in order for the DOE to approve any LNG export projects.

Alarmingly, the DOE kept the identity of NERA a secret from the public, and refused to answer Freedom of Information Act (FOIA) requests filed by Greenpeace, as well as requests from senators’ offices.  The DOE’s excuse? According the DOE FOIA officer I spoke with, they didn’t want outside groups to “influence” the study.

It was Reuters that eventually revealed the identity of NERA, weeks before the DOE publicly released the the details of the contract.  Reuter’s credited “industry sources” for the information.

So to recap, the DOE refused to tell the public the identity of group conducting an extremely important study on natural gas exports, citing a desire to protect the contractor from “influence,” a tacit admission that these studies are somehow corruptible. Then we find out that the notoriously unscrupulous gas industry knew the identity of the contractor before the DOE announced it publicly - the same gas industry willing to use psychological warfare techniques on rural Pennsylvanians - and it was the industry that leaked the contractor’s identity to the press.

Now the study has come out, and surprise, surprise, it says everything the gas industry wanted to hear.  The NERA study supports the unlimited export of natural gas, which opens the door for the gas industry to sell fracked gas in foreign markets. Not only will that lead to higher gas prices here in the US, making fracking more profitable and therefore assuring the drilling of many more wells, but it also means more natural gas infrastructure, more methane leaks, and another blow to our already fragile climate. All the while increasing the profits of oil and gas corporations, like ExxonMobil.

According to NERA’s study:

"Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased. In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports."

Considering the DOE considers NERA to be vulnerable to outside influence, and we know the gas industry knew of NERA’s study before the public did, the NERA study and its results must be questioned.

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