The second study in the IHS series measuring the economic benefits of unconventional oil and gas production in the United States is now available. The new study, American’s New Energy Future: The Unconventional Oil and Gas Revolution and the U.S. Economy – Volume 2: State Economic Contributions is the first in the series to examine the impact for every state on a state-by-state basis. The study measures the impact in terms of jobs, economic value, and government revenue for each state.
The study is a follow-up to the national-level study which found that unconventional oil and gas production currently supports more than 1.7 million U.S. jobs and will support nearly 3 million by the end of the decade.
The latest state-by-state results reveal that, while the economic contributions are driven largely by activity in the 16 states with oil and/or gas production, a significant portion of the economic activity is located in the “non-producing states.”
“The unconventional oil and gas revolution is having a bigger impact across the country, including in non-producing states, than is generally recognized,” said Daniel Yergin, vice chairman of IHS and author of The Quest. “What we found is that the economic and financial links reach out across all the states in our highly-interconnected national economy.”
The 32 states in the Lower 48 that lack major unconventional oil and gas activity will contribute nearly 500,000 jobs through businesses that sell goods and services critical to the lengthy supply chain that supports unconventional oil and gas development, the study finds. The Top 10 non-producing states in terms of jobs are New York, Illinois, Michigan, Florida, New Jersey, Minnesota, North Carolina, Georgia, Missouri and Wisconsin.
The 16 producing states will contribute nearly 1.3 jobs, the study finds. The Top 10 producing states—Texas, North Dakota, California, Colorado, Oklahoma, Pennsylvania, Utah, Louisiana, Ohio, and Arkansas—will contribute nearly 1.2 million jobs.
On a national level, total unconventional oil and gas production in the Lower 48 will contribute $63 billion in federal, state and local tax receipts in 2012. Total government revenues will grow to nearly $113 billion by 2020. Nearly $238 billion will be contributed in value added to the U.S. economy in 2012. This contribution to U.S. gross domestic product (GDP) will rise to more than $416 billion by 2020.
“Looking ahead, the potential is there for the unconventional oil and gas revolution to have an even broader impact on the U.S. economy,” said John Larson, vice president, IHS public consulting. “By lowering the cost of key industrial inputs—such as natural gas—this unconventional revolution could help lay the foundation for a renaissance in U.S. manufacturing and increased competiveness in the global economy.”
To download America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy – Volume 2: State Economic Contributions complete report and methodology, and state-by-state results visit www.ihs.com/unconventionalsandthestateeconomies.
America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy – Volume 2: State Economic Contributions is based on the IHS CERA analyses of each play which calculate the investment of capital, labor, and other inputs required to produce these hydrocarbons. The economic effects of these investments are then calculated using the proprietary IHS Global Insight economic impact assessment and macroeconomic models to generate the contributions to employment, GDP growth, labor income, and tax revenues that will result from the higher level of unconventional oil and gas development. The research was supported by the American Petroleum Institute, Institute for 21st Century Energy, the American Chemistry Council, America’s Natural Gas Alliance and the Natural Gas Supply Association. IHS is exclusively responsible for all of the analysis and content.