A report issued by American Clean Skies Foundation last Thursday projects that technology-driven changes in oil and gas production since 2007 will lead to annual employment gains of 835,000 to 1.6 million new jobs nationwide by 2017 — more than the entire U.S. auto manufacturing industry — and increase the country’s gross domestic product (GDP) by $167 billion to $245 billion net.

Domestic natural gas production in 2017 is expected to be more than 6 Tcf annually, due in part to the use of new extraction technologies, the report said. Oil and liquids production is also seen as rising over that period, totaling an additional 630 million bbl in 2017, a volume that is nearly equal to the crude oil that the U.S. imported from the Persian Gulf in 2011 (680 million bbl).

According to ACSF, for every 1 Bcf/d of additional gas demand, there will be 13,000 additional direct drilling and pipeline jobs created, plus thousands more related to chemical plants and gas-consuming facilities. In turn, these jobs will generate a further 10,000 to 30,000 induced indirect jobs in the manufacturing, retail and service sectors.

The “Tech Effect: How Innovation in Oil and Gas Exploration is Spurring the U.S. Economy” report “helps us put a face on the large economic stimulus that shale gas production has provided for America,” said Gregory C. Staple, CEO of ACSF, a Washington, DC-based nonprofit group formed in 2007 by Chesapeake Energy CEO Aubrey McClendon to promote the use of natural gas for power generation (see NGI, April 30, 2007).

States with extensive shale gas reserves, such as Texas and Pennsylvania, can expect to add up to 236,000 and 145,000 jobs in 2017, respectively, the study said. “States that do not have significant shale gas resources are also expected to gain tens of thousands of jobs, due largely to supply chain businesses. Examples include Florida (59,000 jobs), New Jersey (36,000 jobs) and Missouri (21,000 jobs).

The surge in gas production has led to a renaissance in petrochemical, steel, polymer, glass and ammonia facilities, the ACSF study said. It noted that Pennsylvania, which straddles the Marcellus Shale gas region, won a bid to be the site of a new Royal Dutch Shell plc ethane cracker plant with 400 employees (see NGI, March 19). The plant would be the first of its kind in the northeastern United States. Three other states competed to build the plant, which is expected to play a major role in revitalizing the region.

In addition, the authors said Ohio’s lagging steel industry received a boost when Vallourec & Mannesmann Holdings Inc. agreed to build a $650 million plant in Youngstown, OH, to meet demand for drilling materials such as steel pipe (see NGI, Jan. 16). U.S. Steel and Timken also had announced expansions in Ohio. And Halliburton, Baker Hughes and Select Energy Services — all oil and gas service companies — said they plan to build facilities in the state to meet the needs of drillers in Ohio’s Utica shale play.

ACSF’s report noted that Iowa would host the first new nitrogen fertilizer factory in the United States in more than a decade (see NGI, Sept. 7). Ammonia is the basic material for nitrogen-based fertilizer. Natural gas is used both as a feedstock and a fuel in ammonia production. Rather than producing the fertilizer domestically, ammonia producers have been importing it due to high prices for natural gas in recent years. Low gas prices now are bringing about a turnaround in their fortunes, said the authors.

Also cited was Wisconsin, which has no drilling activity, but which has seen a “sand rush.” The sand is used as a hydraulic fracturing proppant. There are already 16 sand mines in Wisconsin, and demand for sand mining now exists in Arkansas and Missouri too. Georgia has two ceramic proppant factories (an alternative to sand) and more facilities are planned.

According to ACSF, steel demand from the oil and gas industry is expected to be more than 66 million tons between 2008 and 2017, which would be more than enough to justify the new facilities that are being planned in Ohio. Overall steel production currently is 89 million tons a year. “Demand for steel tubular goods has soared, contributing to a revitalization of the domestic steel industry…[and] low energy prices are also helping to make the sector more competitive internationally,” it said.

Incremental tax receipts from all sources of government taxes are expected to rise to $85 billion a year by 2017, according to the report. In addition, it said that increases in royalty payments to individuals/governments should reach $12 billion annually in 2017.

©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.