Study: Shale Is A “Game-Changing” Opportunity for U.S. Economy
A new report this week from McKinsey & Company looks into the best opportunities for the American economy to grow and prosper. Unsurprisingly, energy – more specifically shale development – ranks as the biggest “game changer” available.
The significance of this is hard to overstate. In the 1970s, the United States began to experience a decline in oil and natural gas production, hurting our national security and worsening our national trade deficit. For the most part, this trend would continue for several decades, with the United States growing increasingly reliant on imports. But the combination of hydraulic fracturing and horizontal drilling has completely reversed the situation. Now, the United States is the apple of the global energy world’s eye, leaving OPEC to scratch its head as the United States reduces its reliance on overseas oil.
As McKinsey’s report highlights, this shift in dominance comes with countless, game-changing, economic benefits for the nation. According to the report:
“Powered by advances in horizontal drilling and hydraulic fracturing, the production of domestic shale gas and oil has grown more than 50 percent annually since 2007. The shale boom could add as much as $690 billion a year to GDP and create up to 1.7 million jobs across the economy by 2020.
“…If the United States fully realizes the opportunity, shale energy could revitalize the oil and gas industry, have downstream benefits for energy-intensive manufacturing, and send ripple effects across the economy. We estimate that it could add 2 to 4 percent ($380 billion to $690 billion) to annual GDP and create up to 1.7 million permanent jobs by 2020. This could be an important source of high-wage employment for workers without college degrees, generating economic activity in parts of the country that have seen little investment in recent decades.” (emphasis added)
To be clear, the report does note that there are challenges that face the shale industry, including public perception and perceived environmental impacts. Yet as McKinsey highlights, “if the United States can successfully manage these issues, the shale boom could generate economic growth, high-wage jobs, and a secure supply of affordable energy that enhances US competitiveness.”
Luckily for our nation and our economy, Energy Secretary Ernest Moniz stated just earlier today regarding hydraulic fracturing: “All of these [risks] are manageable.” In addition, state and federal regulators have continually affirmed the safety record of this process.
Looks like shale development is here to stay – and America’s future is only getting brighter.