Economic Impacts of Virginiais Natural Gas Industries


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Virginia Tech. Virginia Center for Coal and Energy Research.


This study estimates the contributions of the natural gas industries to Virginia's economy. Activities covered by this study include the production of natural gas and associated products from wells in southwestern Virginia, gas transportation, and the distribution of natural gas to consumers throughout Virginia. The economic impacts of Virginia's natural gas industries considered by this study include direct, indirect, and induced effects. Direct effects include employment, payroll expenditures, and state and local tax expenditures by Virginia's natural gas industries; baseline data from published sources and an industry survey were used to estimate direct effects. A measure of direct effects, however, does not capture the full extent of the gas industries' economic impact A portion of the revenues received by these industries is spent in Virginia communities to pun:hase goods and services. In addition, wages and salaries received by natural gas industry employees, and by employees of supporting industries, support economic activity within the state. The business activities supported by industry and employee expenditures are called indirect and induced effects. Economic multipliers were applied to baseline data to estimate the indirect and induced economic effects resulting from the production, transportation, and distribution of natural gas in Virginia. In 1993, Virginia's natural gas industries employed over 3,000 people who earned more than $140 million in wages and salaries. In addition, over $80 million of industry revenues supported state and local governments as taxes and other payments. However, the industries' total economic impacts went well beyond these figures. Total in-state economic impacts of Virginia's natural gas industries - including direct, indirect and induced effects - during 1993 are estimated at over $1.5 billion in total economic activity, 12,000 jobs, and $350 million in payroll income.