The Wide, Beneficial Reach of U.S. Natural Gas

Mark Green
Posted June 28, 2017

Natural gas, with a lengthy value chain that reaches all 50 states, today is benefiting American consumers, supporting millions of jobs and supplying billions to the national economy – and will continue doing so well into the future, a new ICF report finds. Key highlights:

• Consumers – Total end-use cost savings of $100 billion by 2040, or $655 per U.S. household, from the increased use of natural gas throughout the economy.
• Jobs – Expected to grow from about 4 million (non-agriculture jobs) in 2015 to between 5.2 million to 5.9 million by 2040.
• Economy – Total added value from direct, indirect and induced activities and jobs throughout the economy was $551 billion in 2015 and could increase to more than $1 trillion in 2040.

From the report:

Economic impacts are measured in terms of the number of jobs that are supported, the wages paid for those jobs, and the total value added (that is, the contribution to the national GDP and to its constituent state products). A unique feature of this report is that it defines the natural gas value chain as going “all the way through consumption” to include the economic activity of converting the natural gas to other products. … The natural gas value chain touches all states and a large number of industrial sectors supporting 2.9% of all non-farm jobs and contributing 3.1% of the national economy (GDP).

Worth underscoring: the benefits of natural gas reach all 50 states – both natural gas producers such as Pennsylvania and Colorado and non-producers such as Connecticut and New York. API Chief Economist Erica Bowman:

“The economic benefits associated with the use of natural gas should not be understated. From the industry’s skilled workforce that produces natural gas, to the restaurants that feed our workers, to pipelines and the workers who build them, to power generation and the homes and businesses that benefit from affordable and reliable electricity, the benefits of natural gas are felt throughout the U.S. economy.”

Three charts from the report show how ICF projects the beneficial impacts of natural gas will grow. First, jobs:

Economic value added:

And wages:

This chart shows the state-by-state employment benefits of natural gas and its value chain (direct, indirect and induced jobs):

Reaction to the ICF report, here. Selected comments:

Stephanie Catarino Wissman, API-Pennsylvania:

“As an energy-producing state, natural gas is critical to Pennsylvania’s economy and its workforce. But the benefits of natural gas extend to non energy-producing states like New York and Massachusetts that depend on natural gas produced in Pennsylvania to heat and power homes and businesses. As this study confirms, natural gas is providing great benefits to all 50 states. Elected officials at all levels of government should embrace this clean-burning energy resource that is critical to our nation’s jobs and economy.”

Tracee Bentley, Colorado Petroleum Council:

“The technology has been proven safe, and Colorado is realizing the economic and environmental benefits of clean-burning natural gas,” said Executive Director Tracee Bentley. “Thanks to U.S. leadership on energy development, led by the production happening right here in Colorado, drivers are saving more than $550 in fuel costs and household budgets grew by $1,337 due to utility and other energy-related savings.”

Steve Guveyan, Connecticut Petroleum Council:

“The study is right in sync with Governor Malloy’s Comprehensive Energy Strategy which calls for more natural gas now and in the years ahead,” said Executive Director Steven Guveyan. “Additional natural gas will also provide more reliability and low-cost fuel for the electricity grid in New England, as natural gas displaces coal and oil.”

David Mica, Florida Petroleum Council:

“Florida relies on natural gas to generate nearly 70 percent of its electricity. The increased growth in natural gas over the past several decades has positively impacted Florida’s air quality and reduced its carbon footprint. During our hot and humid summer season, Floridians and tourists also truly appreciate natural gas’ affordability and reliability as the air conditioners continue to run.”

Erin Roth, Minnesota Petroleum Council:

“America's natural gas renaissance provides Minnesota with a unique opportunity to utilize a clean and affordable fuel alternative to produce electricity to heat and cool our homes and to help reduce emissions. Further, this abundant energy resource is providing affordable energy to Minnesotans.”

Steve Dodge, New England Petroleum Council:

“Natural gas has provided great benefits to New England consumers, workers, and the environment. Increased supplies of clean-burning natural gas will help lower electricity prices for consumers who have paid 50 percent more for electricity as compared to the rest of the nation due to constrained pipeline infrastructure in the region. Moving forward, we must embrace this affordable energy and the pipelines that transport it.”

Karen Moreau, API New York (noting that natural gas could do more in New York if state officials would permit construction of natural gas pipelines:

“New York is the fourth largest consumer of clean burning, affordable natural gas in the country, which is the fuel of choice for over 4.4 million New York homes, 398,000 businesses and 6,000 industrial consumers. This number would be even greater if Gov. Cuomo had not blocked the Constitution and Northern Access pipelines, and delayed the Millennium pipeline extension which would support a newly-built natural gas fired power plant. If not for states like Pennsylvania producing record amounts of natural gas, New Yorkers would not enjoy such low cost energy. When it comes to producing natural gas, Gov. Cuomo loves ‘Made in America’, just not ‘Made in New York.’”

As the ICF report shows, natural gas is a significant engine of economic growth – as well as the main reason U.S. carbon emissions from electricity generation are near 30-year lows. As the report demonstrates, the United States is rich in natural gas. Needed are energy policies that recognize this wealth and support safe and responsible development in the future, including construction of needed infrastructure. API President and CEO Jack Gerard:

“From power generation for homes and businesses that benefit from affordable and reliable electricity, to the industry’s skilled workforce that produces natural gas, to pipelines and the workers who build them, the advantages of natural gas are wide-ranging. With energy week in full swing, this study is another example of the job and consumer benefits of natural gas across the country.”