New Study Finds Natural Gas in Marcellus Shale Region Worth 280,000 Jobs, $6 Billion in Government Revenue
Eric Wohlschlegel | 202.682.8114 | wohlschlegele@api.org
WASHINGTON, July 21, 2010—Natural gas production in the Marcellus Shale region—if developed—could create 280,000 new American jobs and add $6 billion in new tax revenues to local, state and federal governments over the next decade, a new study released today finds.
“One of the biggest opportunities to create jobs and increase America’s energy security lies within the Marcellus Shale region,” said Jack Gerard, president and CEO of the American Petroleum Institute. “Pennsylvania, New York and West Virginia have enough natural gas to create hundreds of thousands of well-paying jobs and provide Americans with a stable, domestic energy source for generations to come.”
The study, “The Economic Impacts of the Marcellus Shale: Implications for New York, Pennsylvania, and West Virginia,” by Timothy J. Considine, Ph.D. of Natural Resource Economics, expands on a recent Pennsylvania State University study, which found similar economic benefits from developing the Marcellus region—a layer of shale rock underneath much of western Appalachia, from southern West Virginia into southwestern, central, and northeastern Pennsylvania, and the southern tier of upstate New York.
Natural gas production in the Marcellus grew considerably during 2009 adding 57,000 new jobs mostly in Pennsylvania and West Virginia. “This new analysis predicts that many tens of thousands of more jobs could be created in the coming years if public policies do not drastically limit production,” said Considine. "Under the best scenarios the development of Marcellus could mean $24 billion in total economic value to the region, which would positively impact all sectors of the economy including the service industry, construction, manufacturing, health care, and education.”
The study also examines factors that could limit the benefits of natural gas development in the region, including: a possible severance tax in Pennsylvania; the current de facto moratorium on horizontal drilling in New York, estimated at $11 billion dollar in lost economic output; and the effects of a challenging tax and regulatory climate in West Virginia.
"Maintaining production growth is like running on a treadmill. Slowing down drilling and production would negatively impact employment and economic growth. If governments pursue policies that encourage the development of natural gas, the ultimate benefits to the economy, the tax base, and society would be significant,” said Considine.
The study finds that natural gas development stimulates the economy through business-to-business spending and via payments to land owners. The process involves exploration, drilling, building gas processing plants, and pipeline construction. These activities require goods and services from many sectors of the economy, including construction, transportation, iron and steel, and engineering services. Natural gas companies also pay lease and royalty payments to land owners, who in turn pay taxes and spend income on goods and services.
For complete text of the survey and more information - including survey methodology - please go to: The Economic Impacts of the Marcellus Shale: Implications for New York, Pennsylvani, and West Virginia.
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For Immediate Release: January 14, 2009 Contact: Jeff.Schrade@ngsa.org (202) 326-9300 www.NGSA.org or www.NaturalGas.org
"Blue Jobs" Provide Employment to nearly 6 Million Americans and Billions in Revenue to Taxpayers
(Washington, DC) Political leaders should start focusing on creating more "blue jobs" even as they pursue the creation of green jobs, a natural gas industry spokesman said today.
"Roughly 5.8 million Americans are employed in and supported by the natural gas and oil industries. We call those blue jobs, taking that image from the blue flame that comes from clean burning natural gas," said R. Skip Horvath, president and CEO of the Natural Gas Supply Association.
He noted that in the last quarter of 2008, even as the U.S. economy was contracting, natural gas and oil extraction firms added 16,000 new high-paying jobs compared to the same quarter in 2007.
"We fully support the creation of more green jobs, but we’ll be wearing our ‘Blue Jobs’ buttons when we meet with political leaders in Washington this year. We want them to better understand how vital our industry is."
"Solar and wind are the green energy forms everyone knows, but it takes blue to make green work. Fly-wheels, chemical batteries, compressed air and elevated water are future technologies that may someday be able to help solar and wind store energy, but the technology that’s available now to backup those generation sources is natural gas," Horvath said.
He noted that for every person employed directly in the industry, another two people are employed by supporting companies.
"We are talking about approximately six million people employed directly and indirectly by natural gas and oil firms. We could have even more people working in our industry with the right federal policies," Horvath said.
In addition to the employment impact, he cited a recent study which indicates opening new areas of supply could create over 100,000 new jobs and provide more than $1.7 trillion in revenue to federal, state and local governments over the next 20 years.
"In 2007, over $6.6 billion went to the U.S. treasury from royalties, rents and bonuses paid by the natural gas and oil industries. In 2008, that number more than doubled to more than $17.1 billion," Horvath said. "Last year state governments earned more than $2.2 billion from the natural gas and oil industry. In 2007, states received $1.6 billion."
As part of his jobs message, the NGSA leader noted that natural gas is a key component in American manufacturing.
"One-third of America’s natural gas is used by American manufacturers to create everything from trash bags and pantyhose to antifreeze and detergent. Those manufacturing jobs are all natural gas related," Horvath said.
He made his remarks at a United States Energy Association meeting held Wednesday at the National Press Club in Washington, D.C.
"Natural gas is essential to America’s economic future. If Congress works to make more natural gas available, the stronger our nation will be," Horvath said.
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NGSA was established in 1965 and encourages the use of natural gas within a balanced national energy policy. The association promotes the benefits of competitive markets to ensure reliable and efficient transportation and delivery of natural gas and to increase the supply of natural gas to U.S. customers. NGSA member companies supply approximately 30 percent of the natural gas used in the United States.