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In 2008, Eagle Manufacturing Co. was struggling. The country was stumbling into the Great Recession and the Wellsburg, W.Va., company was forced to downsize its workforce from 160 to 135.
Eagle makes industrial safety and hazardous material handling products and was being heavily impacted by natural gas prices. The Henry Hub benchmark price peaked at a monthly average of $12.69 per million British Thermal Units (MMBtu) in June 2008, but Eagle was forced to pay around $14/MMBtu on the spot market. The company relied on gas to heat its 850,000 square-foot factory and to fuel its boilers and ovens. But it also was hurt by the high price of natural gas liquid ethane because high-density polyethylene (HDPE) resin is a key raw material in its products.
Then the shale revolution rode to the rescue.
“By the end of 2009, the availability of a local supply of abundant, affordable natural gas from shale provided us with an energy cost advantage that helped start the most aggressive expansion in our more than 100-year history,” said Joe Eddy, the company’s former president and CEO, during a media call hosted by Shale Crescent USA.
Based on the Henry Hub price, Eagle—purchased by Justrite Safety Group in 2018—would have saved more than $500,000 a year in natural gas costs alone. Throw in the company’s demand growth for HDPE that has reached 20 million pounds a year, and the savings due to the low price of ethane are about $4 million a year.
Eagle is not alone in reaping the benefits of dramatically higher natural gas production. An economic analysis for Shale Crescent USA and the Ohio Oil and Gas Energy Education Association showed that increased gas output from Ohio, Pennsylvania and West Virginia has saved U.S. end-users about $1.1 trillion between 2008 and 2018.
“The energy savings have been significant across all sectors of the economy and is ongoing,” said Jerry James, CEO of Maritta, Ohio-based Artex Oil Co. and co-founder of Shale Crescent USA.
The analysis sought to establish what prices would have been without natural gas production from Northeast shale plays, which contributed 85% of the country’s gas production growth from 2008 to 2018. The “crescent” of Ohio, Pennsylvania and West Virginia would rank No. 3 in the world in gas production behind the U.S. (sans the crescent) and Russia, and ahead of Iran and Qatar.
“If natural gas production from shale had not begun to dramatically increase in 2008, then natural gas supplies would have been tighter and presumably equilibrium prices greater between 2009 and today,” said the report.

Jack Kleinhenz, the report’s author, said he reached his conclusions by calculating counterfactual gas prices (what the price would have been without shale production) in four scenarios:
- Historic West Texas Intermediate (WTI) price to Henry Hub U.S. benchmark price ratio. This scenario estimates the Henry Hub price using WTI as the independent variable. Once estimated, Kleinhenz was able to model Henry Hub prices for 2009 to 2018;
- In this scenario, a WTI-to-Chicago Citygate hub price ratio provides both national and state level prices;
- The U.S. Energy Information Administration’s (EIA) price forecast for 2009 through 2018; and
- The fourth method allows 2008 prices to be held constant from 2009 to current.
Of the four, the 2008 constant price scenario showed the biggest savings, $1.6 trillion, and the EIA the smallest at $523 billion, likely due to forecasts that took expected increases in shale production into account. The Henry Hub scenario of $1.1 trillion in savings is based on 2018 dollars, as is the Citygate scenario of $888 billion.
The Northeast was the biggest beneficiary of the shale boom, with household savings averaging $646 in 2017, according to the analysis. That translated to a 38% decline in the average natural gas bill since 2008, which was equivalent to a 0.8% increase in 2017 household income.
Nationally, households averaged $429 in savings in 2017, or a 0.6% increase in income, as gas bills declined 35% over the 10-year period.
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