Intelligence brief: Natural gas stars in lowering emissions, cost of living; Every mile of pipeline creates 58 jobs

Gas industry news you need to know

Almost 350,000 jobs were created in 2015 for the purposes of building natural-gas pipelines (ewg3D / iStock)

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Natural gas plays starring role in lower emissions, living costs

The replacement of coal-fired power with natural gas and renewables has helped reduce US carbon dioxide emissions from electricity generation to the lowest level in more than two decades, according to the US Energy Information Administration.

CO2 emissions from electricity generation totaled 1,925 million metric tons in 2015, the lowest since 1993 and 21% below their 2005 level, the EIA said. The Obama Administration and Environmental Protection Agency set a goal last year of reducing CO2 emissions from power generation by 32% in 2030 compared to 2005 levels.

Natural gas staked a claim to become the number one source of US electricity generation in the second half of 2015, with its share of total generation surpassing that of coal for the first time in April and again for each of the final six months of the year. Considering both the higher thermal efficiency of generators and lower carbon content of fuels, electricity generation using natural gas emits roughly 40% of the CO2 that would be emitted from a coal-fired unit producing the same amount of electricity, the EIA noted.

Separately, the EIA reported that decreases in natural gas and crude oil prices have reduced household energy costs. According to the US Bureau of Labor Statistics, the chained consumer price index for urban consumers decreased by 1.2% and the energy component of this index decreased by 35.3% between June 2014 and February 2016. The EIA said lower energy prices had a significant impact on this decrease. It noted that during the time period covered by the BLS, Henry Hub natural gas prices declined 56%.

Every mile of pipeline creates 58 jobs

Each mile of natural-gas pipeline built in the United States in 2015 created 57.9 jobs, according to a report conducted by IHS Energy for the National Association of Manufacturers.

About $25.8 billion was spent in the US in 2015 to construct the proposed 6,028 miles of new pipelines, the report said. The construction spending generated a temporary increase in employment of 348,789 jobs, including 59,874 in the manufacturing sector. The spending made an estimated $34 billion in direct, indirect and inducted contributions to gross domestic product.

Some 92% of the spending was for transmission pipelines with a diameter of at least 30 inches. IHS explained that the share of economic benefits flowing to the manufacturing sector for the 30-inch diameter pipeline was higher than the share for the 12-inch diameter pipeline because expensive capital goods and equipment, such as steel pipe and pumps, comprise a higher share of the unit cost for the 30-inch diameter line.

Looking to 2016, IHS forecast almost $10.5 billion in operation and maintenance spending on the 303,828 miles of pipeline in the United States. The spending will contribute 119,753 jobs and $16.5 billion to GDP, it said. On a unit basis, for every $1 billion in direct O&M spending on natural-gas transmission lines, the total increase in US employment would be 11,424 jobs, and $1.575 billion in US GDP. About 4.3% of the total employment increase will occur in the manufacturing sector while 13.7% of the additional GDP will be in manufacturing, the report predicted.