The shale gas boom will account for nearly 1.5 million new jobs by 2015, employing hundreds of thousands of workers across 48 states even though some companies are cutting back on production, according to a study released this week.
Soaring investment in unconventional gas production accounted for 1 million jobs in 2010 and will continue to have an effect on the national economy, contributing $197 billion to annual U.S. gross domestic product by 2015, according to the report by research and analysis firm IHS Global Insight. That total will increase to $332 billion by 2035, the report indicates.
Job growth related to unconventional gas production, in both producing and nonproducing states, will increase to 2.4 million by 2035, according to the research.
The independent study was commissioned by the industry-backed America's Natural Gas Alliance and is part of a series on unconventional gas -- developed from shale, coal-bed methane and tight sands -- by IHS Global Insight, which is based in Englewood, Colo.
Roger Ihne, principal energy portfolio leader for research firm Deloitte, which was not affiliated with the study, said that while the United States now has an oversupply of natural gas, which has forced major producers to cut back on their operations, gas has a strong outlook for continued investment and job growth.
"I think clearly there's been a fundamental shift as a result of natural gas and specifically shale gas in the United States, and it has really helped to fuel a boom," said Ihne, who said the IHS study seemed on track with other analyses.
The horizontal drilling and hydrofracking used in extracting gas from shale is currently banned in New York state. However, Gov. Andrew Cuomo is reportedly considering a plan to allow it in five counties along the Pennsylvania border. But the state's environmental agencies must first compose regulations.
The debate over allowing the controversial technique in New York has split communities and neighbors. Environmentalists argue that the potential threats to the air, water and human health are not worth the risks. Advocates say that with proper techniques, the process is safe, and the economic benefits are worth the risks.
Nearly $3.2 trillion in cumulative investments in unconventional gas development are expected to fuel the economic growth related to the industry from 2010 to 2035, according to the study.
"At a time when the U.S. economy is slowly recovering from the Great Recession and struggling to create enough jobs to sharply reduce the unemployment rate, the growth in shale and other unconventional natural gas production is a major contributor to employment prospects and the U.S. economy," IHS vice president John Larson, the lead author of the study, said in a statement.
Larson said the study took into account cutbacks on natural gas production spending because of its surplus. Major producers of domestic natural gas have had to shift away from the capital-intensive process of producing gas from unconventional sources like shale because of low natural gas prices.
Gas closed down 2.8 cents at $2.467 per million British thermal units in trading Friday on the New York Mercantile Exchange.
According to the U.S. Energy Information Administration, there was 57 percent more gas in underground storage in March than the same month a year ago.
"We've already embedded that sort of oversupply and that activity that's going to go on as companies think about investment opportunity potentially slowing," Larson said.
Major investments in industrial projects, like several multibillion-dollar petrochemical plants already in the works in Texas, likely will contribute to growth in American gas demand that will draw continued spending on natural gas production, Ihne said.
Texas will see by far the most job growth because of the boom, with 288,222 new jobs already attributable to unconventional gas production as of 2010, the study said. That number will grow to 385,318 in 2015 and 682,740 by 2035, according to the study.
Annual government revenue from unconventional gas production is expected to exceed $49 billion by 2015, and reach $85 billion by 2035, the study said. By 2035, total government revenue from unconventional gas development will reach nearly $1.5 trillion, according to the report.
The economic benefits of the shale boom are broad, according to the study, with 18 percent of the projected 1.46 million new jobs to come from nonproducing states by 2015. Louisiana ranked second in job growth in producing states, followed by Colorado, Pennsylvania, Arkansas and Wyoming.