Study: Shale Boosted Nation’s Economy During Recession

May 07, 2015

$48 billion annual economic impact came at time when “the economy needed all the help it could get”

The “shale gas revolution” that Range helped to pioneer with the discovery and development of the Marcellus Shale “created an economic boost during a time the economy needed all the help it could get” by pumping $48 billion per year into the United States’ economy between 2007 and 2013, according to a new working paper published by the National Bureau of Economic Research.

University of Michigan researchers Catherine Hausman and Ryan Kellogg authored the new national study.  Among their findings:

….a broad set of sectors has benefited from new sources of unconventional natural gas. Households, for instance, have seen much lower utility bills for both natural gas and electricity. Industrial users have also benefited, including rents for some natural gas intensive industries that have not had to pass on the lower gas prices to their customers.

And in an article that appeared in the Washington Examiner, reporter Jason Russell had this take on Hausman and Kellogg's findings:

The gains from fracking have not only gone to natural gas producers, but manufacturers and consumers as well.

"Manufacturing sectors that are particularly gas intensive have expanded relative to other manufacturing sectors since the onset of the shale gas boom," Hausman and Kellogg wrote. Thanks to low natural gas prices, fracking created 24,000-65,000 extra jobs in gas-intensive industries. In industries that are less gas-intensive, fracking still created between 280,000-610,000 jobs. The upper-bound estimate is significantly larger than all the jobs created in California in the last year, according to the Bureau of Labor Statistics.

Through cheaper gas bills for heating and cooking, United States households have benefited from fracking to the tune of $17 billion per year.

This latest study is one of several that reveal similar findings. 

  • A recent Brookings Institute-backed paper showed that residential natural gas consumers have seen benefits upwards of $17 billion per year from increased production.
  • A recent study from the Manhattan Institute called the oil and gas sector a “bright spot” in the U.S. economy when it comes to jobs created both directly and indirectly (transportation, construction and information services.) According to the study, “nearly 1 million Americans work directly in the oil & gas industry, and a total of 10 million jobs are associated with that industry. ”In Washington County, Pennsylvania birthplace of Marcellus Shale development, researchers from the Center for Energy Policy and Management at Washington & Jefferson College found that the industry had a $6 billion economic impact on the county during a three-year period, making up nearly 20-percent of the county’s total economic output, among other key findings.

Additional Information:

Researchers: Shale, $6 billion economic impact on Washington County

Washington Examiner "Fracking Boosted Economy During Recession"

National Bureau of Economic Research Shale Impact Study

An Analysis of the Economic Impact of Unconventional Shale Development in Washington County, Pennsylvania (2011 to 2013)