The development of unconventional natural gas resources in the lower 48 states supported 1 million jobs in 2010, and that total will grow to 1.5 million by 2015 and to more than 2.4 million by 2035 according to new research from IHS Inc. commissioned for America’s Natural Gas Alliance (ANGA), an association of 30 of North America’s largest independent natural gas producers. ANGA’s members include Chesapeake Energy Corp. (NYSE: CHK), EOG Resources Inc. (NYSE: EOG), Anadarko Petroleum Corp. (NYSE: APC), Devon Energy Corp. (NYSE: DVN), Apache Corp. (NYSE: APA), and Range Resources Corp. (NYSE: RRC).

Unconventional natural gas production in the US will account for two-thirds of all natural gas production by 2015 and nearly 80% of all production by 2035. But the increase won’t come cheaply — the industry is expected to invest $3.2 trillion by 2035 to develop unconventional resources. The report defines “unconventional natural gas” as shale gas, tight sands gas, and coal-bed methane.

The report identifies 20 states that produce unconventional gas, and these states account for 826,000 of the 1 million jobs counted for 2010. Non-producing states (including the District of Columbia) account for about 18% of the created jobs that the report calls “suppliers in unconventional gas expansion.”

The top ten states for jobs in unconventional gas production in 2010 were:

1. Texas — 288, 222 jobs
2. Louisiana — 81,022 jobs
3. Colorado — 77,466 jobs
4. Pennsylvania — 56,884 jobs
5. Arkansas — 36,698 jobs
6. Wyoming — 34,787 jobs
7. Ohio — 312,462 jobs
8. Utah — 30,561 jobs
9. Oklahoma — 28,315 jobs
10. Michigan — 28,063 jobs

The top ten states account for nearly 75% of the jobs in producing states and almost 70% of the 1 million job total. Those percentages remain fairly constant through 2035.

The report estimates that unconventional gas production will contribute $174 billion to US GDP in 2015 and $41 billion to federal revenue in the same year. The way the revenue is spread around will change, though, according to the report:

[T]raditional oil and gas states like Texas and Louisiana will lead the way in terms of the economic benefits they will receive from unconventional gas activity. However, by 2015, many of these economic benefits—including employment (268,000), value added to GDP ($22 billion), and tax revenue ($8 billion)—will be realized in states that do not have any unconventional gas production activity (“non-producing” states), but instead will benefit from the purchases of supplies and services from businesses across the United States.

The question, of course, is whether or not the jobs and the revenue are sufficient to offset the costs that the rest of us pick up to support the drilling and fracking that unconventional gas production needs.

A recent report on the benefits of fracking conducted by a new research group at the State University of New York at Buffalo, the Shale Resources and Society Institute, has received criticism for having an industry bias. The university claims that funds for the study came from institutional funds, but admits that the new institute is seeking natural gas industry sponsors.

The IHS/ANGA report will only stoke up the fires of contention between producers and their critics. But with millions of jobs at stake, the industry has firmly put its thumb on the scale.

A copy of the report is available here.

Paul Ausick

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