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New Albany Shale May Boost Illinois Economy

December 17, 2012
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With an eye on economic development, still relatively untapped shale natural gas deposits in southern Illinois carry the potential to create $9.5 billion in new investment and 45,000 jobs, according to a report by the Illinois Chamber of Commerce.

The study by Illinois State University economics professor David Loomis is the "first of its kind" to look at the state's shale potential. New Albany underlies a substantial portion of the southern part of Illinois.

In the study's most bullish of three scenarios (low, medium and high), up to 47,312 new jobs could be created. Under the other two, up to 10,337 jobs could be created in the medium scenario and 1,034 jobs could be created in the low-growth job scenario.

"The high scenario is similar to the historical employment impacts of shale gas measured in Arkansas (9,683), Pennsylvania (44,098), Texas (Eagle Ford only, 47,097) and Louisiana (57,637)," the report said.

Loomis noted that the shale formation is "still unproven" but it has the potential to be a significant jobs creator. The study looked at the five-year ramp-up from the low scenario to the high one, and the latter would have the potential to create the multi-billion-dollar economic impact.

Earlier this year, the Illinois Oil and Gas Association (IOGA) indicated that most of the exploratory activity in the state was limited to Wayne and Hamilton counties. At that time, nothing had been drilled, said IOGA Executive Vice President Brad Richards. Nothing has changed in the past six months, he added.

"We're now talking about drilling starting the first quarter of next year; it was set back from this quarter," Richards said. Two drilling permits have been issued for exploratory work in the play.

During a lame duck session of the state legislature in the first week of January, IOGA will be pushing for legislation on hydraulic fracturing rules, said Richards.

"We had what we thought was a good chemical disclosure bill in hand [earlier this year] that would strengthen well construction standards along with some other things, and it was passed out of the state Senate at the end of the regular session in May," he said, but the bill ultimately "got stuck" in the lower House in the Assembly where legislators and environmental groups wanted "a more comprehensive bill."

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