New Report Highlights Vast Economic Growth from Shale Development
A new study from IHS CERA puts the immense economic benefits of shale development in the spotlight, showing the hundreds of thousands of jobs and billions in revenues that have been generated as production continues to soar. From the report:
“Employment related to unconventional oil and gas production in these supply chain industries totaled 524,000 jobs in 2012 and is expected to grow 45 percent to 757,000 jobs in 2025” (emphasis added).
These numbers indicate a bright future for American manufacturers of steel pipe, construction equipment, railcars, sand gravel producers as well as technical labor. On top of these positive numbers, IHS CERA found that supply chain industries will contribute, “more than $16 billion in government revenues in 2015 (up from $13 billion in 2012) and rise to about $23 billion in 2025” (emphasis added). As IHS managing director Brendan O’Neil puts it:
“The growth in unconventional production has become an important source of economic activity for these industries at a time when many of their other primary markets were experiencing decline as a result of the Great Recession.”
According to the study, the job-creating ability of shale development is even felt in non-producing states:
“Jobs supported by supply chain activity in producing states were nearly 460,000 in 2012 and are expected to increase to 630,000 jobs in 2025, with construction and support activities for oil and gas operations being the highest source of employment contributions. Total employment contributions for non-producing states are expected to rise from 64,000 jobs in 2012 to 127,000 in 2025, with the capital goods sector contributing the most jobs for those states.”
IHS CERA’s findings are seen daily in local coverage across the country. The Pittsburg Post-Gazette recently reported on how the Marcellus Shale is driving growth in the chemicals sector. Thanks to hydraulic fracturing and horizontal drilling, troves of previously irrecoverable resources are creating an affordable feedstock for the chemicals industry. As Robert Fry, chief economist for DuPont said this week: “From the chemical companies’ perspective, natural gas liquid is a very important feedstock, so the increase in production is a big deal.” The American Chemistry Council (ACC) also backs this outlook. According to the ACC, affordable natural gas spurred more than $124 billion in chemical factories.
A similar story exits within the fertilizer industry. In Illinois, plans to create a nitrogen fertilizer company are in the works. Mark Gulley, an analyst at BGC Financial LP in New York said that another $12.7 billion in fertilizer plants are expected to go into production by 2020.
Reports like these highlight how the benefits of shale development go far past supplying our energy needs. The ripples extend far and wide, effecting entire communities and individuals alike. The best news of all, America’s energy revolution has only just begun.