Strong gas production in Shale Crescent region led to $1.1 trillion in savings

American natural gas end-users—which include households, businesses, manufacturers, and power generators—have realized $1.1 trillion in savings since 2008 as a result of increased gas production in the Shale Crescent USA region (Ohio, Pennsylvania, and West Virginia), according to a new economic analysis released Oct. 21.

The report—Natural Gas Savings to End-Users: 2008-18, A Technical Briefing Paper, released by Shale Crescent USA (SCUSA) and the Ohio Oil & Gas Energy Education Program (OOGEEP)—found that the substantial growth in US gas production resulted in more than $4,000/household in savings over the 10-year period for those that use gas.

US gas producers, employing advanced technologies, have made the US the top gas-producing country in the world, with 85% of that growth coming from the Shale Crescent region.

Tied directly to the abundance of affordable 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 (Ohio, $45 billion; Pennsylvania, $44 billion; and West Virginia, $4 billion).

Industrial users in Shale Crescent region 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, according to the IHS Markit studies, should experience markedly higher profits than other areas of the country due to lower gas and natural gas liquids prices.

“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,” said Shale Crescent USA co-founder Jerry James. “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 one third of the nation’s gas production, and recent projections show the region will account for nearly 45% 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 chief executive officer of Eagle Manufacturing, which produces more than 750 products from their Wellsburg, West Virginia site.

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 some of the most significant savings, with energy bills for the lowest 20% of incomes dropping by 30%, or $315, since 2008. This would be similar to a 2.7% 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,” she said.