Report cites $1.1T in energy savings due to natural gas production
MARIETTA — Natural gas consumers have saved $1.1 trillion since 2008 because of increased natural gas production in the Shale Crescent USA region of Ohio, Pennsylvania and West Virginia, according to a new economic analysis.
“Natural Gas Savings to End-Users: 2008-2018, A Technical Briefing Paper,” released by Shale Crescent USA and the Ohio Oil and Gas Energy Education Program, found growth in domestic production resulted in more than $4,000 in savings per household over the 10-year period for those that use natural gas. U.S. natural gas producers, employing advanced technologies, have made the country the top natural gas producing country in the world with 85 percent of that growth coming from the Shale Crescent region.
Tied directly to the abundance of affordable natural gas, residential, commercial, industrial and electric power generating sectors in these three states have realized a combined savings of more than $90 billion since 2009, the report said. The savings in Ohio was $45 billion, $44 billion in Pennsylvania and $4 billion in West Virginia.
Industrial users in Shale Crescent USA have realized nearly $25 billion in savings over the past 10 years, increasing the attractiveness for new manufacturing investments, a conclusion that aligns with the findings of previous studies conducted by IHS Markit for Shale Crescent USA.
Energy intensive industries that locate in the Shale Crescent region should experience significantly higher profits than other areas of the country due to lower natural gas and natural gas liquids prices, IHS Markit studies said.
“The strength of natural gas and natural gas liquids production in the Shale Crescent region, as this report confirms, has made this region the most profitable place to build a petrochemical plant, giving manufacturers here a critical competitive edge,” Jerry James, Shale Crescent USA co-founder, said. “Energy is the catalyst to breathing new life into American manufacturing and, after years of challenges, we are excited about the bright future in store for communities all along the Shale Crescent.”
Development of the Marcellus and Utica shale formations in these states is responsible for a third of the nation’s natural gas production, and recent projections show the region will account for nearly 45 percent by 2040.
“The surge of affordable, reliable energy had an incredibly positive impact on our operations. The natural gas savings we realized were the driving force in reducing operating costs, which allowed Eagle to expand our workforce and grow as a company,” said Joe Eddy, former president and CEO of Eagle Manufacturing, which produces over 750 products from its Wellsburg, W.Va., facility.
In addition to attracting new industry and the corresponding rise in job creation, the report demonstrates the dramatic energy savings delivered to residential consumers across the country .
Low-income households experience among the most significant savings, with energy bills for the lowest 20 percent of incomes, dropping by 30 percent, or $315, since 2008, which would be equivalent to a 2.7 percent boost in annual income.
“If Ohio, Pennsylvania and West Virginia were a country, it would be the world’s third largest natural gas producer – an accomplishment due to technology innovation that is unlocking energy from the Marcellus and Utica shales, and resulting in growth across the region,” said Rhonda Reda, executive director of the Ohio Oil & Gas Energy Education Program. “The savings tied to Ohio natural gas production have been transformational for all energy consumers, particularly for low-income families who spend a disproportionate amount on energy.”