Shale Will Help Deliver 55,000 Additional Jobs to Houston
A new report co-authored by the Greater Houston Partnership and HSBC Bank USA finds that the benefits of the shale energy revolution are poised to continue in Houston, extending far beyond just the jobs on the wellpads. The study, “Houston’s Next Boom: Exporting Innovation,” analyzes the combined impact of the surge in energy-related exports and the expected oil and gas exploration efforts in Mexico, all made possible by advances in hydraulic fracturing and horizontal drilling. This “surge” in additional economic activity is expected to bring in an additional 55,185 jobs to the region. Here’s the job breakdown from the report:
- Industrial machinery exports: 28,574
- Chemical exports: 23,787
- Infrastructure projects: 2,824
The report notes that as Mexico opens its doors to oil and gas expansion, Houston’s industrial machinery exports will continue to climb. Currently, Houston exports $19.3 billion in industrial machinery, according to the report, but this figure is projected to rise by 15 percent—creating over 28,000 jobs.
This continued climb should not come as shock, though, considering that Houston exported $110.3 billion of goods in 2012—up 164 percent from 2005 (page 10). As of 2012 (the most current data available) the shale revolution has propelled Houston to surpass New York, Los Angeles, Detroit and Seattle as the nation’s highest metro regional exporter.
Our abundance of affordable domestic energy, especially clean-burning natural gas, has also revitalized the American manufacturing sector, creating thousands of direct jobs and many more indirect and spinoff jobs. The petrochemical industry is one area that shale development is driving to new heights. According to the American Chemistry Council, natural gas is fueling a domestic petrochemical boom, providing an inexpensive feedstock (gas) necessary for facility operations and growth. The availability of this energy source has created a strong price difference between operations in the United States and the rest of the world, so much so that chemical companies have committed $100.2 billion to new expansion projects here at home – bringing manufacturing jobs back to America.
According to Lori Vetter, senior vice president and regional commercial executive for Texas at HSBC Bank, the partnership between U.S. industry operators and Mexico holds great potential for both countries. The Houston Chronicle/FuelFix.com reports:
“As we go into Mexico, there’s going to be great opportunities. We have the technology and expertise to help them reverse the decline in their production forecasts. That in itself will require Texas companies to make more of the things they’re already making and ship them as that market opens.”
Less than a decade ago, Americans across the country were looking for work. Today, in shale regions, operators and related industries face the opposite problem. Peter Huntsman, chief executive officer of chemical maker Huntsman Corp. said: “[Y]ou can take every citizen in the region of Lake Charles between the ages of 5 and 85 and teach them all how to weld and you’re not going to have enough welders.” In other words, there are more jobs available than there are people to fill them!
Thankfully, in shale plays from Texas to North Dakota to Colorado, colleges, high schools, engineers and laborers are already teaching hard working Americans the skills required to join the shale workforce. These types of programs will only expand as the economic opportunities from shale development continue to increase.
However, the study warns that these promising estimates could be curbed if shale opponents continue to push unfounded restrictions on the technologies essential to the U.S. production boom. The United States is in a unique position in that it is far and away the global leader in shale development. This next energy boom and all of the economic benefits that come with it could be stifled if the “ban fracking” campaign succeeds in delaying progress. From the report (page 5):
“The outlook for LNG, chemical and oil field equipment exports remains strong; however, downside risks do remain as coalitions have formed to try and halt the practice of hydraulic fracturing and a few local governments have already enacted laws to ban the practice. At the request of the U.S. Congress, the Environmental Protection Agency is “conducting a study to better understand any potential impacts of fracturing on drinking water.” If the study leads to barriers and overly stringent regulation, drilling and newly released gas supplies could be reduced.”
America’s energy experts and top regulators agree that hydraulic fracturing is a proven and safe technology. According to Secretary of the Interior Sally Jewel: “Fracking has been done safely for decades. There is no doubt that this essential tool will be used for decades to come.” Let’s lead with science first and foremost so that Americans can get back to work.