Study Finds Natural Gas Plays Essential Role in the Healthcare Industry 

Washington, D.C. – As part of its Advancing America series, the American Gas Association (AGA) released a new study today outlining the critical role of natural gas in America’s healthcare industry. According to the new study, the U.S. healthcare sector consumes approximately 272 billion cubic feet of natural gas per year, comparable to the total annual natural gas consumption of Utah. Natural gas’ reliability and affordability are critical to addressing healthcare costs and safeguarding hospital operations during emergencies, including natural disasters. 

According to the United States Energy Information Administration (EIA), 80 percent of American hospitals use natural gas for water heating and 74 percent use it for space heating. AGA’s study finds that the average hospital would need 61.4 percent more electricity if unable to use natural gas for these applications. Additionally, the use of natural gas has kept lights on and equipment operating at hospitals during disaster situations when power outages have shuttered other infrastructure. 

“There’s no two ways about it – our energy saves lives,” said AGA President and CEO Karen Harbert. “The affordability of natural gas is critical to keeping hospitals open and serving patients, particularly in rural areas where healthcare facilities often operate with limited resources and extremely low profit margins. America’s hospitals are part of our critical infrastructure – and vital to protecting the health of Americans in good times and when tragedy strikes. The irreplaceable role of natural gas in providing reliability to America’s healthcare system is why there are currently zero all-electric inpatient healthcare facilities in the United States.” 

Montefiore Hospital in New York City was the first to install a natural gas combined heat and power system and was consequently the only powered hospital during the Great Northeast Blackout of 2003, and one of just a few that were able to service patients through Hurricane Sandy. Since then, hospitals have recognized the importance of natural gas for maintaining resiliency with more than 200 hospitals adopting natural gas combined heat and power systems. 

AGA’s Advancing America study also finds the use of natural gas in the healthcare sector is a significant cost saving measure for hospitals. Natural gas is approximately one-third the cost of electricity, according to the U.S. Department of Energy, and represents significant ongoing cost savings for hospitals and other healthcare delivery sites. Mandated electrification could add as much as $16.3 billion in passed down cost to consumers in the U.S. healthcare system through 2050 as a result of increased operational costs alone. 

The study also shows the high cost of electrification would lead to a loss of up to 276 thousand job years from 2026 to 2050. Approximately 35 percent of costs would be incurred by New York state, with much of the remainder concentrated in the rest of the Northeast. In addition to increasing healthcare bills for American families, this operational cost increase could endanger up to one third of American hospitals that currently operate with a profit margin under three percent. The estimated loss of economic activity as a result would translate to a GDP reduction of $32.2 billion during the same time frame.