Study reveals employment and capital gains of natural gas exports

A new study found that the export of liquid natural gas from the U.S. could have a significant impact on the domestic economy.

As of 2012, the unconventional gas market has supported 2.1 million jobs, according to Kyle Isakower of the American Petroleum Institute, and is expected to support 3.9 million by 2025. Exporting natural gas to the global market, however, has the potential to strengthen these numbers and produce a remarkable income, as revealed by ICF International.

ICF projected that up to $115 billion could be added to the GDP by 2035 as a result of LNG exports. Furthermore, a net increase of 665,000 jobs nationwide is expected, with 77,000 occurring in the manufacturing industry.

"These exports will significantly reduce our trade deficit, increase government revenues, grow the economy, and support millions of U.S. jobs in engineering, manufacturing, construction, and facility operations," said Isakower.

The country has the potential for robust LNG trade largely due to the increase in extraction from unconventional gas sources. These tough-to-reach deposits, which include coalbed methane, shale gas, methane hydrates, tight gas and other resources, have been recently obtainable thanks to advances in technology such as horizontal drilling and hydraulic fracturing.

States with markets for energy extraction will benefit the most from exporting LNG. However, even those who do not extract will see positive impacts. According to API, net employment and income gains are expected in every U.S. state, with incomes above $1 billion projected for over half by 2035. Texas, however, would see the biggest gains in employment and income, with a projected 156,000 net jobs and $31.4 billion in revenue in that time period.

Manufacturing gains
Heightened LNG exports will produce a demand for a variety of manufactured goods. For the extraction process, manufactures will be sought after for piping and steel casing, cement, compressor equipment, tanks and control systems. For processing, refining and transportation, the LNG trade will require construction of pipelines and new facilities.

The projected manufacturing job gain of 77,000 will see its largest gains in Texas and California, with producers of tools, machinery, electronics and vehicles will accounting for the largest portion.

Manufacturers in these areas should consider making investments to boost their production capabilities, such as increasing staff. Although a shortage of skilled workers is posing a challenge to hiring managers, manufacturing recruiters can help pinpoint the talent companies require.