Growing natural gas production in the United States has created a wealth of economic opportunity across the Midwest. The United States is now the largest producer of natural gas in the world and production is expected to grow by 44 percent by 2040.
This energy renaissance has created new jobs and bolstered industries struggling since the financial collapse of 2008, and there is a bright spot in Michigan’s immediate future: new infrastructure to connect our state with abundant and affordable natural gas.
Currently, our state has several pipeline projects in review that will create the infrastructure to connect Michigan to the economic benefits of the new energy production. As vast as United States gas reserves are and as technologically advanced the methods of extraction have become, there still remains the issue of providing a network to be able to deliver the natural gas to customers both locally and around the world. For the United States to realize its potential as an energy producer, it must invest in a robust energy infrastructure capable of handling the increased production of natural gas.
The benefits of these proposed projects are significant. Take the Rover project for example. This pipeline constitutes an investment of approximately $4.3 billion, and is set to create 10,000 constructions jobs and generate nearly a billion dollars in wages. Moreover, Michigan alone is projected to receive about $16.5 million from taxes on the use of building materials during the pipeline’s construction, generating approximately $11 million annually in state, local, and federal taxes. Investments like this project spur economic activity and attract additional large-scale investment projects.
The Michigan House pointed out the economic advantages of natural gas in Michigan’s economy in its 2012 Report on Natural Gas and concluded that new gas pipelines will be needed to receive larger volumes of natural gas and to minimize pipeline transportation costs.
The Rover pipeline will provide the infrastructure necessary to ensure Michigan has direct access to safe, reliable energy resources, providing a low-cost fuel source for our state. As a result, manufacturers in our states will have new means to run their businesses in a more cost-effective way, resulting in clear and longstanding benefits to our state.
Any large infrastructure project comes with negative impacts, but this project has demonstrated a strong commitment to land restoration and impact mitigation. As for its effect on property values, studies have shown that natural gas pipelines does not decrease land values and will provide a net-benefit to our entire community.
According to a study by the Interstate Natural Gas Association of America, which took case studies from four geographically diverse areas, there is no significant effect on the sales price of property, regardless of the size or location of the pipeline. Infrastructure technology has advanced leaps and bounds over the last couple of years, and pipelines have become among the most effective and environmentally friendly way to transport natural resources.
While with any underground pipeline project there are small risks, the new technology and safety measures will help mitigate potential impacts, while providing our state the long-term infrastructure for low-cost, domestic energy sources.
The Rover pipeline is an important step in enhancing our energy infrastructure, which will help our country in assuming its new role as an international energy power broker. But, more importantly, this project will provide clear and immediate benefits to our community by creating new jobs, increasing Michigan’s tax revenue, and supplying our state with low-cost energy resources.
Gary Wolfram is professor of economics and public policy at Hillsdale College.