Economic Outlook n° 1187 | Special Report | The Reindustrialization of the United States
Euler Hermes
22. Use of energy sources by sector Supply Sources Percent of Source
Petroleum 37%
72 22 5
1 41 3
Natural Gas 25%
7
Coal 21%
Renewables 8%
Nuclear 9%
<1 93
12
26 9
53 100 1
11 22
18 48 1
Electric Power 41%
32 35 30
40 7
11
17 76 1 7
Industrial 20%
Residential & Commercial 11%
Percent of Sector
94 3
3
Transportation 28%
Demand Sector
Source: Energy Information Administration, Annual Energy Review 2009 Unconventional gas: the cash cow?
Increased unconventional gas activity will contribute to capital investment, job opportunities, economic growth, government revenue, and lower prices across the country including:
>Nearly $3.2 trillion in investments in the development of unconventional gas are expected to fuel the increase in production between 2010 and 2035 >In 2010, unconventional gas activity supported 1 million jobs; this will grow to nearly 1.5 million jobs in 2015 and to over 2.4 million in 2035 >Between 2010 and 2015, the Top 10 producing states — as ranked by employment generated by their unconventional gas activity — will experience a compound annual employment growth rate of nearly 8%. Total U.S. employment is expected to grow at an average rate of 1.6% during the same time period >By 2015, unconventional gas activities will contribute nearly $50 billion in federal, state and local government tax and federal royalty revenue. Between 2010 and 2035, continued development of unconventional gas will generate a cumulative total of nearly $1.5 trillion in federal, state, and local tax and royalty revenue.
The Economic and Employment Contributions of Unconventional Gas Development in State Economies, IHS report for America’s Natural Gas Alliance (June 2012)
Double-tanked cars
Much of the consumption of petro- leum could be replaced with natural gas. The technology exists now to operate a passenger car on natural gas. Furthermore, it is possible to have two separate tanks, one for gasoline and one for natural gas, and to simply flip a switch between the two on the fly. Many municipalities are now run- ning buses and garbage trucks on na- tural gas. However, there are still only 110,000 natural gas vehicles on the road in the U.S., as compared to Iran
and Pakistan which have nearly 3 mil- lion vehicles each. There is enormous potential for the development of na- tural gas powered -vehicles in the U.S. And since there currently is only one natural gas powered passenger ve- hicle for sale in the U.S. - the Honda Ci- vic CNG - there would appear to be plenty of market share available for more than one manufacturer. The cost per mile to run a vehicle on natural gas now is a fraction of that of on ga- soline, although distribution and re-
lative price changes could increase or decrease that margin. Clearly natural gas could be a contributor to the rein- dustrialization of the U.S. through in- creased demand for new natural gas- powered vehicles. Natural gas is also increasingly being used by 18-wheel trucks, ships and trains, and there are even proposals for natural gas-powe- red aircraft. Part of the challenge in developing na- tural gas vehicles for the U.S. will be es- tablishing the necessary infrastruc-
ture of refueling stations, a costly in- vestment for the future when cur- rent demand is so low. In the U.S. each refueling station currently sup- ports only 102 vehicles on average, as opposed to 1,589 in Iran and 856 in Pa- kistan. While the lack of infrastructure is an obstacle, it also represents an op- portunity for further U.S. reindustria- lization.