This morning, ExxonMobil filed our submission with the U.S Department of Energy for the open-comment period of a recent study DOE commissioned on the economic implications of liquefied natural gas (LNG) exports.
That study concluded that natural gas exports would yield net economic benefits for the United States. Its conclusions also reinforce the fact that the country’s enormous natural gas resource base can support both growing domestic use of natural gas for manufacturing and electricity generation as well as LNG exports.
The study’s findings are backed up by similar analyses from the Brookings Institution, Manhattan Institute, Rice University’s Baker Institute, the National Association of Manufacturers, the American Chemistry Council, the Small Business & Entrepreneurship Council, and the U.S. Chamber of Commerce, along with numerous other organizations, editorial boards and elected officials.
DOE’s study is more good news for America’s growing natural gas production, a result of technological innovations by industry to unlock supplies trapped in unconventional formations. The simple fact is that natural gas is creating a brighter, cleaner, more secure energy future. We have more than a century’s worth of supply with prolific new resources coming online. And increased use of natural gas is contributing to substantial reductions in air pollution and greenhouse gas emissions.
This is having a profound and positive effect on America’s economy, a point we emphasized in the comments we filed. I encourage you to read them. They provide an excellent overview of the issues facing policymakers as the export discussion advances.
Higher wages and economic multipliers
Of particular interest are the sections on pages 4-5, citing research from IHS Consulting on jobs and wages in the energy industry that are tied to natural gas production from unconventional sources.
In a study last year, IHS noted that the average wage rate for production workers in the oil and natural gas industry – $35.15 per hour – far exceeds the average hourly wage rates “paid in manufacturing (at $23.70 per hour), wholesale trade, education and many other industries.”
The result is a “large multiplier and induced impact because more income is spent on general goods and services by workers in unconventional oil and natural gas activity than in other industries or in the economy in general.”
That helps explain why oil and natural gas production from unconventional sources acts as “one of the larger employment multipliers” in the U.S. economy.
And as the DOE-commissioned report indicates, more exports will almost certainly lead to more investment, more exploration, and more production, meaning even more economic benefits.
The industry will add this economic expansion while continuing its main task of reliably providing the energy supplies vital to the functioning of a modern and growing American economy.
A myriad of benefits
The technological revolution tied to unconventional oil and gas development is having a transformative effect on our economy.
It’s helping revive American manufacturing. It’s slashing greenhouse gas emissions. It’s increasing energy security. And it’s a robust job creator at a time when much of the rest of the economy is still limping along.
That points the way to an energy future worth pursuing.