Source: “Benefits and Opportunities of Natural Gas Use, Transportation, & Production,” American Petroleum Institute
It heats a majority of U.S. homes and generates a plurality of domestic electricity. It burns cleaner than petroleum-based products and is cheap and abundant. It’s natural gas, and a new analysis by the American Petroleum Institute explores how it contributes “to the U.S. economy both at a national level and in terms of the economies of individual states.”
“Benefits and Opportunities of Natural Gas Use, Transportation, & Production” tracks “the number jobs that are supported, the wages paid for those jobs, and the total value added (that is, the contribution to the national GDP and to its constituent state products).”
New Mexico is a major player in natural gas, with nearly 40,000 related jobs and an economic contribution of $720 million in the end-use segment, $1.9 billion in infrastructure, and $2.4 billion in production. But as the graph below shows, the state’s not as active as it once was. The downward trend in price instigated by the fracking revolution dropped marketed production from 1.7 million cubic feet in 2000 to 1.2 million cubic feet in 2012.
With U.S. demand rising and the market for exports expanding, it’s safe to assume that New Mexico’s natural-gas production will again head upward. But aside from customer interest, the health of the industry is directly related to both federal and state policies. That’s why it is important for all those concerned about the state’s well-being to follow the Trump administration’s positive moves on energy. Just as important is next year’s race for state land commissioner. The campaign’s already turned quite nasty, with an eco-left challenger attacking the incumbent with what the Santa Fe New Mexican‘s Steve Terrell called “misleading taunts, full of explosive language but lacking any substantiation.”
There is another advantage to natural gas — it is half as expensive per BTU (energy content) as oil. Well head prices are now $46/BBL for oil and $3/mcf for gas.
Here is the math: There is a 7:1 ratio in energy of a barrel of oil and an mcf of gas. A barrel of oil equivalent of gas is 7 mcf of gas which would cost ($3×7=) $21. So natural gas costs under half as much for the same energy content.