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Natural gas use supports 3.4 million US jobs, $408B in GDP, industry report says

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Natural gas use supports 3.4 million US jobs, $408B in GDP, industry report says

The direct use of natural gas in homes, commercial buildings and industrial facilities supported more than 3.4 million U.S. jobs in 2018, according to a new analysis by the nation's top trade group for investor-owned gas utilities.

The report from the American Gas Association, or AGA, attributed relatively few of those jobs, roughly 138,000, to workers employed in the gas distribution sector. However, the job count grew to nearly 1.7 million when analysts counted jobs linked to gas distribution, and it roughly doubled when analysts included jobs supported by economic activity throughout the value chain.

Together, those jobs accounted for $408 billion of U.S. GDP and underpinned $152 billion in personal income in 2018, according to the report.

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"A key piece of this analysis is the economic contributions associated with the direct use of natural gas, which tends to be lower cost compared with alternatives," report co-author and AGA Managing Director for Energy Analysis Richard Meyer said during a July 9 Twitter Q&A. "In other words, the total economic output (jobs, GDP, wages) would be on net lower if higher-cost fuels were utilized in lieu of natural gas."

The report comes as gas utilities are under pressure to evolve their business models to align with state climate policies. The same day the AGA released its economic analysis, the Rocky Mountain Institute called on state regulators to take a more active role in building decarbonization. In a report, the Rocky Mountain Institute recommended electrifying buildings, strategically retiring parts of the distribution system and creating a plan to transition utility workers into new roles.

The AGA report stressed that the economic benefits of gas distribution tend to accrue to the communities that gas utilities serve.

"One of the interesting takeaways of the analysis for me was the finding that between 62 and 83 percent of all indirect and induced jobs associated with local gas utility stay within that region," Meyer said.

The main constituents in the associated jobs category are upstream gas production, midstream transportation, downstream end uses and the gas appliance sector. The headline employment figure also includes so-called induced jobs, or jobs supported by the purchasing power of people employed directly or indirectly by gas utilities and associated sectors.

The jobs supported by gas distribution ballooned from 138,000 to 467,000 when AGA analysts factored in the various sectors that gas distribution affects, a list that spans 20 categories such as accommodation and food service and wholesale trade, according to the AGA's analysis. Direct, indirect and induced jobs added $97.8 billion in value to GDP and generated $26 billion in personal income.

The AGA counted another 90,000 jobs in gas production, a number that grows to nearly 436,000 including all upstream industries and indirect jobs in fields such as accounting and technology. Including induced jobs, the upstream category supported 1.4 million jobs, personal income of $60 billion and $152 billion in added economic value.

The end-users category includes the manufacture, sale and installation of gas appliances for 69 million U.S. households with gas service. These activities supported about 1 million jobs, drummed up $54 billion in personal income and added $99 billion to GDP, the AGA found.

Another category of end-user job creation baked into the figures is employment supported by the commercial use of natural gas, including in factories and restaurants. The AGA attributed 892,000 jobs, $39 billion in personal income and $90.5 billion in GDP to utility gas sales to these end users.