Shale Putting America Back In Motion
At the end of 2011, IHS CERA released a report on the enormous benefits being created by natural gas development across the United States. This past summer, a second installment of the IHS CERA study found that, by 2015, responsible natural gas production from shale and other “tight” reservoirs will create an astounding 1.5 million jobs. Now, just months later, IHS has released its latest report – a comprehensive and exciting compilation of America’s energy awakening, undoubtedly thanks to shale.
As the report lays out, production of these reserves via hydraulic fracturing and horizontal drilling is generating significant economic growth – and will continue to do so well into the future. According to IHS, continued oil and gas development from shale will lead to:
- the addition of 1.2 million new jobs by 2020, ultimately supporting a total of 3.5 million jobs by 2035;
- the creation of more than $5.1 trillion in cumulative capital expenditures by 2035; and
- almost $62 billion in additional federal, state and local tax receipts in 2012 and more than $111 billion in 2020, with a total of more than $2.5 trillion in cumulative added revenues between 2012 and 2035.
That’s unquestionably good news for a nation looking to jumpstart its economy and free itself from foreign energy dependence. And with nearly 1 in 10 new U.S. jobs created by oil and natural gas development, it’s not surprising the outlook is shining bright.
In fact, the development of American shale is already providing a major boost to American manufacturing. As the Wall Street Journal reported today, America’s once abandoned rust belt is now coming back to life thanks to affordable, clean-burning natural gas. From the Journal:
“‘I never would have expected that as a region we’d have a second chance to be a real leader in American manufacturing,’ Bill Flanagan of the Allegheny Conference on Community Development, a regional business group, told a crowd of locals who came to hear about the chemical plant. ‘Suddenly we’re back in the game.’
“…’The U.S. is now going to be the low-cost industrialized country for energy,’ the energy economist Philip Verleger says. ‘This creates a base for stronger economic growth in the United States than the rest of the industrialized world.’
And as Daniel Yergin, IHS Vice Chairman and a leading global authority on energy, also described it in the Wall Street Journal, shale development holds a “tantalizing prospect that the U.S. could regain market share among the world’s manufacturing exporters”, a statement confirmed time and again across the nation and in recent reports by PricewaterhouseCoopers.
Yet atop these outstanding economic impacts (as described in local, regional, and national news), the broader socio- and geopolitical impacts of America’s ability to generate its own energy cannot be overlooked. Reducing our trade deficit and decreasing our reliance on foreign, often insecure sources of energy have wide reaching benefits for our national security and economy alike.
From Dr. Yergin:
“Shale gas alone is now 10% of the overall U.S. energy supply. And similar technologies to recover so-called tight oil trapped in rock formations are largely responsible for boosting U.S. oil production by 25% since 2008—the highest growth in oil output of any country in the world over that time period.
“…the energy revolution is having other effects that get less attention. The balance of payments is one. The increase in domestic oil production over the past five years will reduce our oil-import bill this year by about $75 billion. The growth of shale gas will save the U.S. from spending $100 billion a year on imported LNG, which was the likely prospect five years ago.
“There is also a geopolitical dimension. The increase in U.S. oil production since 2008 is equivalent to almost 80% of what was Iran’s export level before the imposition of sanctions on the Tehran regime. Without the additional oil coming from the surge in U.S. oil output, the Iranian oil sanctions could not have worked as well as they have.
“…The rapid growth of oil and natural gas production represents a major opportunity for the U.S. Without these energy resources, the disappointing economic picture would look worse, and so would the jobs numbers. Instead, the energy revolution is helping revitalize the economy and make the U.S. more competitive in the global marketplace.”
From the creation of millions of jobs to the strengthening of our national security, the development of America’s shale reserves is proof-perfect that American ingenuity and technology can truly put America back in drive.