US Chamber: Without Shale, Ohio & Pa. Would Have Lost Hundreds of Thousands of Jobs and Billions in GDP
A new report released today from the US Chamber of Commerce entitled “What if America’s Energy Renaissance Never Actually Happened?” outlines the huge impact shale development has had on the United States, and particularly in Pennsylvania and Ohio. The report finds that without our energy renaissance, the United States would have lost 4.3 million jobs and $548 billion in annual GDP.
Ohio and Pennsylvania, and more specifically the “Rust Belt,” would have been hit extremely hard over the past few years. In fact, Pennsylvania and Ohio alone would have lost 232,400, $22.9 billion in state GDP and $13 billion in labor income annually without shale development. From the report:
“The impact the energy renaissance has had (and continues to have) on Pennsylvania’s economy is difficult to overstate. These figures account both for the losses that would have been experienced by the oil and gas industry under such a scenario, and the significant energy cost savings from which both residential and industrial energy users in Ohio benefited.”
Ohio’s Lt. Governor Mary Taylor and U.S. Representative Bill Johnson explained the significance of report, which shows the impact of what a ban on fossil fuels – the goal of the Keep It In The Ground campaign – would do. As Lt. Governor Taylor today said in a press call today:
“The timing of this report is perfect, as it highlights the positive impact of this industry and reveals the transformational effects on Ohio’s economy. As importantly, the report highlights what our country and specifically what Ohio would look like had policies been enacted that prevented the energy revolution. The policies which would have undermined our energy resurgence would have been misguided and counterproductive. In Ohio, we’ve shown how to protect Ohioans and balance important regulations while advancing the economic impact of the industry.”
Rep. Johnson, a member of the House Energy and Commerce Committee, also offered the following remarks:
“The bottom line is this: The energy renaissance that has happened in the Marcellus and the Utica shale—that is what has brought Ohio back, in my opinion. Those counties that have significant plays in the Marcellus and the Utica shale have seen their unemployment rates drop by as much as 66 percent. It has been astounding the opportunities that have been created.”
The U.S. Chamber’s report took a look at the economic impact of data from 2015 and compared it to similar data from 2009, when domestic energy started to accelerate (although in Ohio, exploration and production of shale started in 2011). The report implemented an IMPLAN model, which analyzed the ripple effect through the economy to suppliers and ultimately households, quantifying the real world impacts and consequences that would have occurred had domestic energy been “kept in the ground.”
Of course, activists like Bill McKibben and groups like the Sierra Club have called for “Beyond Coal” and “Beyond Natural Gas” by making such sweeping statements as, “We can, and we must, and we will keep that coal and gas and oil underground.” Well, for those of us that actually live and work in these states, those political statements have tremendous real world consequences. For example, take a look this table, which lays out what would happen in Ohio had private companies not invested billions into the economy:
Pennsylvania also would have suffered serious impacts:
Nationwide, these numbers are even more astounding. The U.S. Chamber found that 4.3 million jobs would not have been created; the U.S. economy would be a half-trillion dollars smaller today; electricity prices would be 31 percent higher; and motor fuels would cost 43 percent more. Residential natural gas prices would be 28 percent higher and industrial natural gas prices would be 94 percent higher.
This would have disastrous ripple effects for Pennsylvania and Ohio’s manufacturing sector, impacting some of the most economically depressed areas in the country, particularly those who have incurred record-number job loss from the coal industry. Some of Ohio’s hardest hit counties were given a substantial boost by oil and natural gas, and as EID reported, shale counties in fact drove the entire state’s unemployment down.
Not only does this report create a much-needed pause to reflect on what would have happened had domestically produced oil and natural gas from shale not occurred—more importantly, it begs the question, what will happen to our future if in fact we “Keep It In the Ground”?
A coalition of civic leaders, nonprofits, chambers of commerce and port authorities recently came together to highlight the importance of the prolific natural gas production from the region’s Marcellus and Utica Shales. Ohio, Pennsylvania, and West Virginia together has surpassed Russia world’s largest producer of natural gas. As a Jerry James, president and CEO of Ohio-based Artex Oil Company stated,
“If Ohio, West Virginia and Pennsylvania would form its own country, we would now be the No. 3 producer of natural gas in the world. Over the last five years, virtually all the growth in natural gas production in the United States is all from Ohio, West Virginia and Pennsylvania.”
James said not only does the region have the most growth, but also the largest reserves, which has in turn given the region the lowest natural gas prices in the industrialized world.
“When you look at those other places in the world, they have natural gas, but they don’t always have the water for manufacturing and transportation, and they don’t have the markets to sell it into. “When you really look, we’re very, very fortunate that we have all three.”
Even the U.S. Secretary of Energy has taken note of this region. At a U.S. House Energy & Commerce hearing last week, responding to a question from Congressman David McKinley (WV-R) on the importance of ethane storage for advancing energy security and national security, Energy Secretary Ernest Moniz said,
“As we know in Pennsylvania, West Virginia, Ohio there is a tremendous opportunity given all the ethane production … it’s an extremely valuable commodity.”
The risk to our economy, pocket books, and employment (particularly in the Appalachian region) is simply too great even to comprehend keeping it in the ground. After five years of development it is certainly a good time for a much-needed reality check of what these anti-fracking campaigns are really all about. As the U.S. Chamber rightly pointed out,
“In a sense, [keep it in the ground activists] are arguing the country would be better off it the energy renaissance never happened.”