Hydraulic Fracturing: Good News for America’s Economy
Hydraulic fracturing and extensive shale reserves are continuing to provide good news for America’s economy. In Oklahoma, the Chairman of the Oklahoma Independent Petroleum Association, Robert Sullivan, called the new innovation being utilized in the oil and gas industry the “cornerstone” of the state’s economy. As the national unemployment remains stuck at or near nine percent, real innovation is creating real jobs across the nation—and the world is taking notice. Last week, a Financial Times headline read, “Oil shale boom boosts US jobs market”, an article that tells of the impressive gains American oil and gas development is providing for the U.S. jobs market. The highlights speak for themselves:
- “The boom in shale oil and gas production has created one bright spot in the otherwise grim US labor market, as manufacturing growth in oilfield services equipment leads to big jumps in profit and calls for new staff to cope with demand for everything from rigs to pipes to pumps.
- “The rate of job growth is noteworthy,” said Brian Davidson, an economist with the US Bureau of Labor Statistics, which compiled the statistics. He noted, in comparison, that total non-farm employment rose just 1.2 per cent in September, reflecting still sluggish growth across other sectors.
- “For every well drilled in the US – and there are tens of thousands drilled each year – up to 200 people come and go across that well,” said James Minmier, president of Nomac Drilling. “All are high-paying jobs that infuse dollars into local communities.” Chesapeake is trying to fill 700 jobs across the company.
- Mr Mosher says Compass’s backlog of orders for compression equipment will take years to clear. “It’s incredible,” he said. “I’ve never been any place where you could look down the road and demand was going to grow exponentially.”
But it’s not just about jobs. Hydraulic fracturing has truly opened the doors for America’s energy future. The Houston Chronicle highlights that national production rates are expected to exceed Russia and Saudi Arabia by 2020; the state of North Dakota alone is surpassing an OPEC member in oil production today. This homegrown, domestic energy source is reducing our dependence on foreign regimes, boosting our national security and providing for our economies on the local, state and federal levels. Even if you failed economics (sorry professor), the tangible benefits of shale development are impossible to ignore—
- Leaders of gas exporting powers to urge return to oil-linked price. Platts. “The US has had significant growth in the amount of gas that can be recovered domestically because of shale, making it now the largest producer of natural gas in the world. PFC Energy, the consultants, said last week that dramatic growth from shale sources meant that the US will become the top producer of oil and gas on a barrel of energy basis, surpassing Russia and Saudi Arabia, by 2020.”
- North Dakota Oil Rivals OPEC Member. Bloomberg. Surging crude output in the Bakken shale formation is set to make North Dakota a bigger oil producer than OPEC member Ecuador. The chart of the day tracks North Dakota’s production, which has almost doubled in the past two years, as Ecuadorean output has stagnated…“There’s been an amazing jump in North Dakota output,” said Rick Mueller, a principal with ESAI Energy LLC in Wakefield, Massachusetts. “We are looking for output to be anywhere from 700,000 barrels to 1 million barrels a day within five years.
- Oil shale boom boosts US jobs market. Financial Times. James West, oil field services analyst at Barclays Capital, said 3.5m of horsepower in pressure pumping equipment will be added to the US market in 2011, and the same amount is likely in 2012…“The US is adding $8-$10bn in economic activity just to build equipment to produce shale,” Mr West said.
- Shale gas enhancing energy supply, security. Houston Chronicle, Mark Albers. Whether you call it revolution or evolution, one thing is clear: Shale natural gas is producing jobs and economic benefits across the nation…As our nation considers this potential, we are reminded of the importance of reliable, affordable energy to our economy – especially during challenging economic times. Affordable supplies of natural gas – driven by the increase in shale production – have helped reinvigorate the domestic petrochemical industry, which relies on gas as a feedstock to make plastics and the other building blocks of modern manufacturing. These supplies are strengthening America’s steel industry, which is building new mills and hiring workers to support shale gas drilling. And areas where production of shale oil or natural gas is occurring are experiencing economic growth, job creation, and increased tax revenue.”