Shale Gas Supports More Than 600,000 American Jobs Today; by 2015, Shale Gas Predicted to Support Nearly 870,000 Jobs and Contribute $118.2 Billion to GDP, IHS Study Finds

"Shale gale" will also blow in lower natural gas, electricity costs, and boost tax revenue

WASHINGTON--()--The natural gas "shale gale" that has dramatically transformed the outlook for U.S. energy supplies is also having profound economic impacts -- creating jobs, reducing consumer costs of natural gas and electricity, stimulating economic growth and bolstering federal, state and local tax revenue, according to a new IHS Global Insight study. The study found that shale gas production supported more than 600,000 jobs in 2010, a number that is projected to grow to nearly 870,000 by 2015.

The study, The Economic and Employment Contributions of Shale Gas in the United States, is the most definitive study to date tracking the long-term economic impact of U.S. shale gas production. It presents the economic contributions of shale gas in terms of jobs, economic value and government revenues through 2035, as well as the broader macroeconomic impacts on households and businesses. The report is the first of three on the economic effects of unconventional gas and oil development in North America.

“The rapid growth in shale gas production—currently 34 percent of total U.S. production—is one of the most significant energy developments in recent decades and is having a significant impact on the nation's economy in terms of stimulating job creation and economic growth,” said IHS Vice President John Larson, the lead author of the study. “This study further informs the discussion with a greater understanding of the economic potential from this vast American energy source.”

Among the study's key findings:

  • Shale gas had grown to 27 percent of U.S. natural gas production by 2010; it is currently 34 percent and will reach 43 percent in 2015 and more than double by 2035 to 60 percent
  • In 2010, the shale gas industry supported more than 600,000 jobs; by 2015 the total will likely grow to nearly 870,000 and to more than 1.6 million by 2035
  • Nearly $1.9 trillion in cumulative capital investments are expected to be made between 2010 and 2035
  • Annual capital expenditures, especially strong in the early years, will grow to $48.1 billion in 2015
  • The shale gas contribution to the U.S. gross domestic product (GDP) was more than $76.9 billion in 2010; in 2015 it will be $118.2 billion and will triple to $231.1 billion in 2035
  • Over the next 25 years, the shale gas industry will generate more than $933 billion in tax revenues for local, state and the federal governments
  • Savings from lower gas prices, as well as the associated lower prices for other consumer purchases, equate to an annual average addition of $926 in disposable income per household between 2012 and 2015, and increase to more than $2,000 per household in 2035 on an annual basis

The report’s findings reflect the dramatic impact of shale gas production in the United States. As recently as 2007, it was believed that the country would soon need to import large volumes of liquefied natural gas (LNG) for domestic consumption. Instead, shale gas production has more than doubled the size of the discovered natural gas resource in North America—enough to satisfy more than 100 years of consumption at current rates.

A key reason for the shale gas industry’s profound economic impact is its high “employment multiplier”—the indirect and induced jobs created to support an industry. For every direct job created in the shale gas sector, more than three indirect and induced jobs are created, a rate higher than the financial and construction industries, the report finds.

“Shale gas combines a capital-intensive industry with a broad domestic supply chain,” Larson said. “The United States is a leader in all parts of the shale gas industry which means that most of its suppliers are domestically based, and that means a larger portion of the dollars spent are supporting domestic jobs in trucking, steel fabrication, aggregates, heavy equipment manufacturing, hotels, and restaurants, among others.”

The study also found that shale gas and related jobs pay higher wages on average – currently $23.16 per hour – than those paid to workers in manufacturing, transportation and education.

The IHS Global Insight study measured the broader impact of lower natural gas prices, finding that over the 2010-2035 period prices on average would be at least two times higher absent shale gas production. This impact is even greater now and over the next few years when prices would have been two-and-a-half to three times higher. The lower natural gas prices have resulted in a 10 percent reduction in electricity costs nationally and that flows through the economy to lead to lower prices for many other consumer purchases.

Lower gas prices also boost the international competitiveness of domestic manufacturers, resulting in 2.9 percent higher industrial production by 2017 and 4.7 percent higher production by 2035.

“Absent the added supply from shale gas production, large volumes of LNG imports would be required and U.S. consumers would be paying European or even Asian prices which are two to three times what they are today here in the U.S.,” Larson said. “The benefits of that savings reverberate through the wider economy.”

The Economic and Employment Contributions of Shale Gas in the United States was commissioned by America's Natural Gas Alliance (ANGA). IHS Global Insight offers an independent assessment and is exclusively responsible for all of the analysis, content, and conclusions contained in the study.

In measuring the economic contribution of shale gas, the study fully "sized" the economic influence of the industry by capturing all the supply chain and income effects associated with shale gas activity in the U.S. The results of the production and capital expenditure profile analysis were integrated into a customized modeling approach developed by IHS Global Insight. This approach links Input-Output modeling techniques – similar to those used by the U.S. Department of Commerce and the Congressional Budget Office– with the dynamic modeling capabilities of proprietary IHS models to capture the industry's comprehensive contribution and impact on the economy. The results represent a conservative estimate as the study:

  • Constrained future production and capital expenditures by realistic market demand as well as technical and economic feasibility of developing shale gas plays.
  • Did not consider production or investment activities from additional gas plays that have yet to be discovered.
  • Independently evaluated each play to reflect regulatory environments in each region and adjusted production profiles to reflect little or no development if there was uncertainty as to regulation and access.
  • Did not consider the economic benefits accruing to the U.S. suppliers who are supplying the Canadian shale gas industry.
  • Did not quantify the job creation in industries that would refocus investment back to the United States (for instance, petrochemicals).

IHS Global Insight established the modern economic forecasting industry nearly 50 years ago and provides the most comprehensive economic and financial information available on countries, regions, and industries, using a unique combination of expertise, models, data, and software within a common analytical framework. Among those who developed IHS Global Insight's expertise in this area was Nobel laureate in Economics Lawrence Klein.

To download The Economic and Employment Contributions of Shale Gas in the United States complete report and methodology, visit

About IHS (

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Businesses and governments around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,500 people in more than 30 countries around the world.

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Jim Dorsey, +1-781-301-9069
Jeff Marn, +1-202-463-8213


Jim Dorsey, +1-781-301-9069
Jeff Marn, +1-202-463-8213