Natural gas exploration in shale formations could create more than 47,000 jobs in Illinois and spur $9 billion in statewide economic development, concludes a new study released by the Illinois Chamber Foundation.
The study was conducted by Dr. David Loomis, a widely recognized expert in energy and telecommunications economics, who is director of the Center for Renewable Energy at Illinois State University.
“Accessing natural gas in Illinois could produce many direct and indirect benefits and thousands of jobs,” said Loomis in a press release. “Illinois is in a great position to participate in this dynamic energy renaissance.”
Thousands of New Jobs
The study provided estimates for three separate scenarios of economic impact based on different levels of exploration. A low level of exploratory activity would create more than 1,000 total jobs; a medium level would create more than 10,000 jobs; and a high level of exploratory activity would create more than 47,000 jobs. Each of these scenarios would be help stem a statewide exodus of jobs and workers, the study found.
The job creation numbers are consistent with job creation already realized in Texas through natural gas production in the Eagle Ford shale formation, which is known to be similar in geology to the New Albany shale formation in Illinois.
In addition to job creation, natural gas exploration and production would raise land values and create economy-wide benefits, the study observes.
Conservative Job Estimates
Kyna Legner, Illinois field director for Energy in Depth, a public outreach campaign launched by the Independent Petroleum Association of America, said the study illustrates the benefits of natural gas production.
“At a minimum, the study estimated that simply allowing companies the opportunity to explore New Albany for resources would create 1,000 jobs in Illinois, which already has an unemployment rate that is a full percentage point higher than the national average,” said Legner. “Is there any other industry that can create that many jobs simply by allowing it to explore for an opportunity? No production, just exploration.”
Legner said job creation may actually be higher than reported in the new study.
“The Loomis study was conservative in that it only looked at natural gas possibility, but the New Albany has attracted interest because of its liquids potential. Liquids plays are receiving a great deal of industry attention,” said Legner. Who Will Get the Jobs?Local activist groups such as Southern Illinoisans Against Fracturing our Environment (SAFE) said many of the jobs would go to out-of-staters who would be lured to Illinois.
Natural gas production through hydraulic fracturing “is a technically specialized kind of drilling mastered by Texas oil and gas service companies, such as Halliburton and Baker Hughes. Who, then, are the Illinois drilling companies that can qualify for this drilling work...?” SAFE asked in a press statement.
Legner dispelled the myth of jobs going to out-of-staters. Illinois, said Legner, has a long history of energy production and has an ample supply of qualified workers.
“Our state has been producing oil and gas for a hundred years. To say that Illinois does not have the expertise to participate in shale development is an insult to the thousands of men and women across the state who are employed by Illinois companies who develop oil and natural gas.”
Legner added, “Let’s not forget that Caterpillar, one of the major suppliers to the oil and gas industry, has its global headquarters here in Peoria, Illinois.”
Legislation regulating hydraulic fracturing—also called fracking—sailed through the Illinois Senate last year but became stuck in a House committee after House Speaker Mike Madigan added 101 pages of taxes and additional regulation that shocked energy companies.
In response, the oil and gas industry—which cannot begin its investment until regulations are certain—suggested compromise legislation incorporating some of Madigan’s provisions. It remains unknown whether the legislature will act on it in 2013.
Taylor Smith (firstname.lastname@example.org ) is a policy analyst at The Heartland Institute.
Loomis, David G., “The Potential Economic Impact of New Albany Gas on the Illinois Economy,” December 2012, http://news.heartland.org/sites/default/files/illinois_fracking_study.pdf