Families, Manufacturers Save Billions Annually Thanks to Domestic Natural Gas Development

American consumers are saving billions of dollars annually thanks to domestic natural gas production, two recently released studies confirmed. The separate reports from the White House Council of Economic Advisors and ShaleCrescent USA attribute savings to the significant growth in domestic natural gas production – the majority of which has taken place in the Appalachia region.

Over the past decade, 85 percent of the growth in U.S. natural gas production has taken place locally and the region leads in available resources, demonstrating the opportunity for continued long-term development. As the U.S. strengthens its position as a global natural gas production leader, consumers, manufacturers, small businesses, hospitals, and schools will continue to be a winner.

Key takeaways from the White House report include:

  • To meet needs for heat, light, power, and transportation, U.S. consumers typically spend $1.4 trillion dollars annually, or roughly 7 percent of total GDP, on energy goods.
  • By lowering energy prices, [CEA] estimates that the shale revolution is saving U.S. consumers $203 billion annually, or $2,500 for a family of four. Nearly 80 percent of the savings stem from a substantially lower price for natural gas.
  •  [CEA] estimates that from 2005 to 2017, the shale revolution lowered energy-related GHG emissions by 527 million metric tons per year, or 9 percent of GHG emissions in 2005.

The Shale Crescent USA study found that natural gas production generated $1.1 trillion in energy savings over the past ten years and how production in Appalachian allowed for those successes to occur:

  • Nearly all the growth of natural gas production has come from the three states of Ohio, Pennsylvania and West Virginia. Shale Crescent USA is responsible for 85% of the natural gas production growth in the U.S. over the past ten years.
  • Natural gas prices using the annual average Henry Hub price have declined from $8.86 in 2008 to $3.08 in 2018,1 a 65% decrease. During the 10 years prior to 2008, natural gas prices were on a steep rise. If natural gas production had not increased, prices would have continued to rise.
  • Natural gas savings per household based on percent of income showed the lowest 20% percent realized savings of 2.7% of annual income. Stated differently, this would be similar to a 2.7% boost in income.
  • When allocating the entire $1.1 trillion savings from lower natural gas costs over the last ten years from every sector to each household in America (roughly 125 million households), average annual savings equate to $900 per household per year or $9,000 of savings over the ten-year period.

Both studies highlight the current progress and promising future for shale development in the United States. Thanks to the natural gas-dense Marcellus and Utica shales, Appalachia will remain on the forefront of energy savings, innovation, and climate progress for decades to come.