- $76 billion share of U.S. GDP.
- $33 billion in capital investments made.
- $18.6 billion in federal, state and local government tax and federal royalty revenues.
- 600,000 jobs supported.
And that was just in 2010.
These impressive stats sum up the economic contributions of U.S. shale gas production in 2010, according to a recent study from IHS Global Insight.
The U.S. shale gas industry will continue to be a major generator of jobs, government revenue and economic stimulus for decades as production continues to increase. Researchers estimated that nearly $2 trillion in capital investments will flow into the U.S. shale gas industry between 2010 and 2035.
The benefits of such massive investment will spread throughout communities, businesses, and governments around the country. The study examined recent increases in shale gas production and modeled the growth trend into the future, finding that shale gas will grow from 27 percent of U.S. natural gas production in 2010 to 60 percent in 2035. As a result:
- The jobs supported by the shale gas industry are expected to more than double by 2035, from 600,000 in 2010 to 1.6 million by 2035.
- The annual government tax revenues will more than triple, from $18.6 billion in 2010 to $57 billion in 2035.
- In total, the shale industry will generate more than $933 billion in federal, state and local government tax and federal royalty revenues over the next 25 years.
- The value added to the U.S. GDP will nearly triple, from more than $76 billion in 2010 to $231 billion in 2035.
Those are a lot of large numbers that can be hard to fully grasp. A few comparisons may help:
- The $2 trillion in shale gas capital expenditures to be invested by 2035 is an amount that would reduce the current U.S. national debt by about 13 percent.
- The $933 billion in tax and royalty revenues from shale gas activity expected over the next 25 years is an amount that would come to close to paying for the 2011 Social Security and Medicaid budgets combined.
- The $231 billion in value added to the U.S. GDP by the shale gas industry in 2035 is an amount that’s higher than the GDP of the majority of the world’s countries in 2010, including Ireland, New Zealand and Denmark, just to name a few.
The U.S. shale gas industry is already a sizable contributor to the U.S. economy, and as these numbers show, the industry’s contributions will only continue to grow. But this growth is not pre-determined – and, in fact, can be undermined if counterproductive policies and regulations are enacted by policymakers at the federal and state levels. Government policies that promote access to U.S. energy supplies and increased investment are necessary for the industry to continue its pattern of growth – as are the industry’s actions to maintain safe operations throughout the country.
With a focus on effective policy and responsible operations, the shale gas industry can play a major role in U.S. economic recovery and growth.