The natural gas value chain accounted for nearly 3% of all U.S. gross domestic product (GDP) and non-farm payroll employment in 2015, with the industry's benefits reaching all 50 states, even those without production, according to a new ICF report backed by the American Petroleum Institute (API).
Isolating its analysis to look solely at domestically produced gas, condensate and natural gas liquids (NGL) -- not crude oil or imported hydrocarbons -- ICF found that the domestic gas value chain accounted for 1.95 million direct and indirect jobs in 2015, along with 2.15 million jobs from induced economic activity.
ICF's employment tally included production, infrastructure and end-use jobs across the power generation, industrial and residential/commercial sectors, among others.
"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 and useful energy services," ICF researchers wrote. As an example, they pointed to the petrochemical industry, where economic impacts were found up "through the derivative chemical levels" but not in the manufacture of intermediate or consumer products.
Using this method, ICF found the gas value chain supporting employment even in states without oil and gas production, where infrastructure and end-use segments still accounted for some jobs.
The report, issued during the Trump administration’s “Energy Week,” API used ICF's findings to tout the benefits of gas across the country, highlighting state-by-state examples such as Tennessee, where the industry in 2015 supported 3.1% of the jobs and contributed $12.94 billion to its economy.
"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," API CEO Jack Gerard said. "With energy week in full swing, this study is another example of the job and consumer benefits of natural gas across the country."
The study also calculated projections to 2040 based on the Energy Information Administration's (EIA) Annual Energy Outlook (AEO). By 2040, domestic gas employment impacts across production, infrastructure and end-use segments could reach as high as 5.9 million under EIA's 2016 AEO high oil and gas resource scenario, ICF found.
"Value added for all three segments combined grows from $551 billion in 2015 to $934 billion in the" AEO reference case, "an annual growth rate of 2.14%," ICF said. "The 2016 high oil and gas resource case has a higher growth rate of 2.45% per year and reaches $1,008 billion by 2040."
The gas value chain is also expected to grow its contribution to U.S. exports through 2040, according to ICF, building on the $37.6 billion the industry contributed to exports in 2015, including petrochemicals, fertilizers, plastics and resins.
Looking at available EIA projections and "making reasonable assumptions about other items," it estimated that "the fastest growth in natural gas value chain exports would be expected in" liquefied natural gas "exports and petrochemicals, with substantial growth also expected in pipeline natural gas and NGLs.
"By 2020, the exports of all natural gas value chain items might be 133% to 158% of 2015 export values. By 2030, the natural gas value chain exports might be expected to be 190% to 215% of 2015 levels and by 2040 about 232% to 253%," ICF said. "In other words, exports of natural gas value chain items would grow at annual rates of 3.4% to 3.8%, while the overall value chain grows between 2.0% and 2.4% per year."