Rising production of natural gas is increasing U.S. competitiveness, promoting growth and jobs, and bolstering the economy with lower, more stable pricing.
In the past decade, technological innovations have sparked a huge, unanticipated increase in estimates of North America's recoverable natural gas resources. This new reality of abundant, domestic natural gas supplies at lower prices has already made significant positive impacts on the U.S. economy.
Increasing U.S. Competitiveness
Plentiful, secure and affordable, our nation's supply of natural gas is enhancing the global competitiveness of U.S. industry, adding tens of thousands of well-paying jobs in the U.S. and expanding the nation's capacity for generating clean, affordable electric power.
Leaders of manufacturing and electric-power generation companies now view natural gas as a cleaner, more reliable and lower cost source for new power generation than other generation options, such as coal, nuclear power or renewable energy sources like wind and solar. That's why more than 85 percent of new electrical generation capacity built in the U.S. over the last decade used natural gas.
Promoting Growth and Jobs
Natural gas is promoting economic growth, creating new jobs and generating U.S. government revenues. Activities related to developing natural gas contributed $385 billion to the U.S. economy in 2008, according to the Natural Gas Supply Association (NGSA), whose members produce and market about one-third of the nation's total natural gas supplies. Royalty payments by the natural gas industry to the U.S. government amounted to $4.4 billion between 2005 and 2010.
Surging shale gas production already has helped revive areas impacted by the economic downturn in Pennsylvania, West Virginia, Montana, North Dakota, Arkansas and other states. The natural gas industry directly employs 622,000 Americans, plus another 2.2 million people in supporting industries, according to IHS Global Insight.
Bolstering the U.S. Economy
Residential, commercial and industrial customers have benefited from lower, more stable natural gas prices. The broader economy gets a lift as well when customers reallocate money once spent on energy supplies to other purchases or investments.
No other energy source can match the ability of natural gas to deliver energy quickly, reliably, cleanly and affordably and thus drive economic growth and job creation. The accelerating use of natural gas has many economic benefits. This is another reason we believe natural gas should be an important part of America's energy future.
Reviving Local Economies
The shale revolution already has helped revive economically depressed areas in Pennsylvania, West Virginia, Montana, North Dakota, Arkansas and other states. During 2010, development of the Marcellus shale formation in Pennsylvania supported nearly 140,000 jobs and generated $1.1 billion in state and local tax revenues, according to a Penn State University study.1
In south Texas, the Eagle Ford Shale Play has created 47,000 jobs, generated more than $25 billion in revenue and provided $257 million in local government revenue, according to a study issued by the University of Texas at San Antonio.2
A Comeback for U.S. Manufacturing?
The United States is still the world's largest manufacturer, with a 21 percent market share employing more than 11 million people. Although more jobs still leave the country than come back, the difference is shrinking as some companies failed to realize cost savings overseas. As examples: GE is bringing back production of energy-saving water heaters Caterpillar is increasing domestic production of hydraulic excavators; and NCR is returning production of automated teller machines.
Wise government policies, such as stable and supportive tax and regulatory structures, could accelerate the change. Every factory needs energy. Policies that ensure a robust energy-supply base can further enhance a national competitive advantage.
The North American natural gas market appears poised for a long period of supply stability that is expected to help keep future prices at reasonable levels. Access to vast, new supplies of domestic natural gas, at competitive prices on a world stage, is creating competitive advantages for U.S. petrochemical manufacturers, resulting in greater investment and industry growth.
Natural gas can also revitalize chemical manufacturers, wrote Cal Dooley, president and CEO of the American Chemistry Council, in a letter published by The Wall Street Journal.3
The council projects that increased production of shale gas would;
- Produce nearly 400,000 new jobs in the chemical sector and among suppliers.
- Increase U.S. economic output by more than $132 billion.
- Provide $4.4 billion a year in local, state and federal taxes.
1"The Pennsylvania Marcellus natural Gas Industry: Status, Economic Impacts and Future Potential" report by the Penn State University College of Earth and Mineral Sciences. July 2011.
2"Economic Impact of Eagle Ford Shale" report by the UT San Antonio Institute for Economic Development. May 2012.
3 "Shale Gas is Helping Industry, Too" by Cal Dooley. The Wall Street Journal. Letters. Aug. 5, 2011.