Benefits to the Economy through the Direct Use of Natural Gas

“Over 69 million American households rely on natural gas utilities to provide energy to appliances inside their homes. Another 5.7 million more commercial and industrial businesses are supplied through the same local gas utilities to meet their daily needs.”The American Gas Association, Energy Analysis, Benefits to the Economy through the Direct Use of Natural Gas

Last year, the American Gas Association analyzed how the direct use of natural gas benefits the economy as a whole. Results showed a strong relationship between the reliance that consumers have on natural gas and the success of our economies. Let’s take a closer look at these results. 

Benefits to the Economy through the Direct Use of Natural Gas - diagram

The study found that in 2018, more than 3.4 million jobs were connected to the direct use of natural gas, which amounted to $408 billion to our nation’s gross domestic product (GDP). These jobs paid $152 billion in personal income. Of this employment, as much as 83% remained local! This is largely due to local distribution companies, or LDCs. These are the utility companies that deliver energy directly to the homes and businesses of consumers nationwide. LDCs are a crucial component of the gas industry. In that same year, they supplied more than 40% of energy consumed in the nation.  

Direct, Indirect and Induced Jobs

The industry has provided a number of jobs in upstream, midstream and downstream sectors. Hundreds of thousands of these jobs can be traced directly back to the well pad, including jobs in extraction, distribution or even the manufacturing of appliances that use natural gas. Any employee that comes in direct contact with the product is considered direct.  

Benefits to the Economy through the Direct Use of Natural Gas Chart

On the other hand, indirect jobs are also created by the natural gas industry. For example, our accountants, IT department, and even the folks on our external affairs team are still part of the process. Indirect natural gas jobs reach all economies across the nation.

Lastly, induced jobs are created through personal purchasing of goods and services by employees. They are not a direct part of the natural gas supply chain, but they create a strong ripple effect that drove approximately 69% of the national GDP in 2018.  

Consumers and Producers Rely on Each Other

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At the end of the day, consumers of all kinds rely on natural gas to keep their energy bills low, their lights on and their appliances running. But in turn, these local distribution companies count on consumers to continue purchasing gas for several reasons. First, the higher the demand for natural gas, the more jobs will be needed to meet that demand. Second, consider the footprint of your home purchases. Think about the number of appliances in your home that use natural gas or were manufactured using natural gas. The sale, installation and repair of these appliances supplied more than 1 million jobs in 2018. So, while repairing an appliance or paying an energy bill might only be a small part of your day, don’t forget just how many jobs you are fueling by utilizing natural gas in your everyday life.   

George Stark

George grew up in Western PA, graduated from Dickinson College and has been involved in Public Policy matters since then. He has worked in Harrisburg and Pittsburgh on energy issues with a focus on Local, State and Federal matters. As the Director, External Affairs at Cabot Oil & Gas Corp, George directs the media, community and legislative relations for the company.