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Study Finds New Natural Gas Development Could Create More Than 45,000 Jobs And $9 Billion In Economic Development In Illinois

New natural gas production from Southern Illinois shale has the potential to create more than 45,000 jobs in Illinois and $9 billion in economic investment, according to a study released by the Illinois Chamber Foundation. The study, The Potential Economic Impact of New Albany Gas on the Illinois Economy, was conducted by Dr. David Loomis, president of Loomis Consulting and professor of economics at Illinois State University.

The study is the first of its kind to focus solely on Illinois’ potential when it comes to increased hydraulic fracturing and horizontal drilling—techniques that have been used in other states to create a nationwide boom in natural gas and oil production, as well as increasing economic development and much-needed jobs. It includes the following findings:

  • Three different scenarios: The New Albany shale formation is well known in the oil and gas production world, but it’s unknown if these drilling techniques will be effective in extracting natural gas (or oil) economically—allowing for the ramp up of significant investment and production that has been seen in other areas of the country. Therefore, Loomis created three scenarios (low, medium, high) to determine the range of economic benefits that could come to Illinois.
  • Jobs and economic impact: The total employment impacts (direct, indirect and induced impacts) for the three different scenarios are:
    • 1,034 new jobs for the low scenario
    • 10,337 new jobs for the medium scenario
    • 47,312 new jobs for the high scenario
    • This highest scenario translates into over $9.5 billion of economic impact for the state.
    • The high scenario is similar to the historical employment impacts of shale gas measured in Arkansas (9,683), Pennsylvania (44,098), Texas (Eagle Ford only—47,097), and Louisiana (57,637).
  • The economic impact could be even greater: The study’s estimates are conservative in part because they do not include the economic impact of land leases that would be given to local landowners, nor does it look at what could happen if exploration discovers extractable oil deposits, such as what was found in western North Dakota.

The study made comparisons to investments in other shale formations and based reasonable modeling assumptions from their experiences, including: gas production levels, number of wells drilled per year, costs per well and amount of local content (Illinois resources vs. those brought in from other states).

“As we look at possible economic engines that could propel Illinois’ economy for decades to come, we need to look no further than the potential for increased natural gas production,” said Doug Whitley, president and CEO of the Illinois Chamber of Commerce.

“Accessing natural gas in Illinois could produce many direct and indirect benefits and thousands of jobs,” said  Loomis, who also does annual studies showcasing the impact of Illinois’ wind industry. “Illinois is in a great position to participate in this dynamic energy renaissance.”

The Illinois Legislature is currently negotiating with oil and gas interests, business organizations and environmental groups to create regulatory guidelines for future hydraulic fracturing and horizontal drilling in Illinois. The latest industry draft gives Illinois the chance to pass one of the most comprehensive set of protections in the country while providing the industry the certainty it needs to invest in the state.

The number of jobs at stake is not lost on people from the areas where the shale exists.

The Heartland Institute concludes that New Albany shale is still unproven but has the potential to be a significant creator of  jobs for the State of  Illinois.  Even with the modest ramp-up of  jobs assumed in this study, a minimum of  1,000 jobs would be created or supported each year with the potential of  47,000 jobs annually if  the highest scenario is realized.  This highest scenario translates into over $9.5 billion of  economic impact for the state.

“Given the thousands of jobs at stake, we hope the Legislature will double their efforts to provide a workable regulatory road map so Illinois has the chance to join the energy production economic boom in the United States,” said Tom Wolf, executive director of the Illinois Chamber’s Energy Council. “Illinois is in no position to turn away responsible job growth opportunities.”

“The results of this study showcase the exciting opportunities for local communities,” said Norma Lansing, president of the Effingham County Chamber of Commerce. “The quantity and quality of jobs that are possible would be a huge boon for the economy in this area of the state.”

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Schwartz joined Group C Media in April 1989 as managing editor of Today's Facility Manager. In September 2012, she transitioned to a new role dedicated to developing online content for Business Facilities and Today's Facility Manager. Schwartz can be reached at [email protected]

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