New Study Analyzing State-Specific Benefits of Natural Gas Finds More Than $550 Billion in Total Added Value
A new study by ICF International reaffirms the substantial economic benefits provided by natural gas development and use in the United States. The report, produced on behalf of the American Petroleum Institute (API), examines the economic impact of natural gas-related activities and employment in each of the 50 states, as well as the country as a whole.
Overall, the report finds that increased domestic natural gas use not only saves consumers money – estimated to reach $100 billion by 2040 – but also significantly contributes to the U.S. economy by supporting in an estimated four million jobs across the country.
Titled “Benefits and Opportunities of Natural Gas Use, Transportation, and Production,” the ICF report breaks down the benefits associated with each part of the natural gas value chain – from development to end use by consumers and manufacturers. In doing so, this report helps to give a full, comprehensive look at the benefits provided by natural gas. In total, the report finds that the natural gas supply chain provided more than $550 billion in economic benefit in 2015 – a truly staggering contribution. As the report notes,
“The total value added by these direct, indirect and induced activities sums to $551 billion in 2015, which is 2.9% of the entire U.S. GDP for that year.” (pg. 3)
Along with determining the current economic impact, the report also quantifies the job creation associated with the natural gas supply chain, finding that an estimated four million U.S. jobs were supported by natural gas in 2015. At a state level, Texas accounted for the largest employment in 2015 (direct, indirect and induced) associated with natural gas. While unsurprising that the Lone Star State had the largest employment associated with natural gas, given its impressive level of production and booming petrochemical industry, the numbers are nevertheless staggering: an estimated 784,900 jobs, or 6.8 percent of total state jobs in 2015.
In addition to employment gains, the economic value added by natural gas activities and use in Texas are equally impressive, accounting for roughly $114 billion in 2015 across the entire supply chain. According to the report:
“The contribution to the Texas economy in terms of direct, indirect, and induced value added in 2015 was $114.0 billion, of which $41.5 billion was related to the end use segment, $33.6 billion was from the infrastructure segment, and $39.0 billion was from the production segment.” (pg. 228)
Looking forward, the contribution of natural gas is projected to continue to be significant. According to the report, total U.S. employment associated with natural gas could reach 5.9 million people by 2040. Additionally, the report finds that total wages from employment related to natural gas activities could total an estimated $397 billion dollars in 2040. In total, the direct, indirect and induced value added by projected natural gas activities could grow by about 2.45 percent per year, reaching over $1 trillion in added value by 2040.
There is no question that domestically produced natural gas has a profound impact on the United States economy. As this report shows, not only does natural gas currently provide significant employment opportunities and hundreds of billions of dollars in added value to the domestic economy, those contributions are projected to increase substantially.
Read the full report here.