New Study Show Impact of Shale Gas

Gas fuels growthHot on the heels of UGI Utilities’ 13 percent reduction in gas rates, comes a comprehensive study examining the impact of shale gas on the economy nationwide. The report by IHS Global Insight, a 50 year pioneer in economic forecasting, confirms shale gas as a current and future economic powerhouse.

Perhaps the most welcome finding is the projected 870,000 jobs attributed to the shale gas industry by 2015. Jobs from shale drilling span a variety of industries and currently average $23.16 per hour — a welcome bright spot in very dim economy.

The impact has been felt here in Pennsylvania as the Patriot News summarized this weekend:

According to a recent federal report, “The fastest 12 growing occupations in Pennsylvania are all directly related to Marcellus Shale,” said Sue Mukherjee, director of workforce development for the state’s Department of Labor and Industry. The number of employees in the core oil and gas industries in Pennsylvania has more than doubled in the last three years. Mukherjee said the number of new hires who come from within the state has increased to 74 percent.

Projecting out further, shale gas is expected to contribute nearly $1 trillion in federal, state, and local taxes in the next twenty-five years. So much for those who insist drilling companies somehow sidestep taxation.

More drilling also means cheaper gas prices for residents. IHS reports that producing gas domestically, rather than importing, has lowered prices from potentially $12 per million BTU to around $4. This massive cost savings is passed on to the consumer via lower heating and electricity prices — a savings Pennsylvanians see on every monthly statement.

By 2035, lower gas prices will equate to an average increase in disposable household income of more than $2,000 annually. According to Pennsylvania Secretary of Community and Economic Development Alan Walker, lower gas prices have already saved Pennsylvania residents and businesses $13 billion over the last two years. And more affordable local energy will likely make the state attractive to energy-intensive businesses, like manufacturing, creating another opportunity for significant job creation.

Given that shale drilling has led to the discovery of over 100 years of natural gas supply in America, a principled impact fee will enable Pennsylvania to truly become the keystone of the nation’s energy future. But an unnecessary and excessive tax could push future drilling, and the jobs that come with it, to other states with plentiful natural gas resources and friendlier business climates.