Until a few years ago, only geologists got excited about shale. But, today, this type of rock is the source of a new American energy boom, which is creating and supporting millions of jobs in a number of states, including Pennsylvania, Texas, and North Dakota.
Production of oil and natural gas from supported 1.75 million U.S. jobs in just the past few years, according to a report by IHS Global Insight, co-sponsored by the U.S. Chamber?s Institute for 21st Century Energy. Jobs tied to unconventional oil and gas production will reach 3.5 million by 2035, according to the study. Eighty percent of these jobs are on drilling rigs or supply these rigs with pipe, water, sand, and other materials. These shale-related jobs pay more than double the national average. The ripple effect will support the other 20% of jobs?hotel, restaurant, and rail line, for example.
?We?ve known for some time that shale energy is truly a game-changer for America?and now we can prove it,? says Karen Harbert, president and CEO of the Energy Institute.??This study shows that shale energy is already contributing over $200 billion to our economy, with much more to come if policymakers at all levels of government don?t stand in the way.?
Oil extracted from shale has contributed to a more than 25% increase in domestic production of oil over the last four years.?By 2015, oil production is expected to increase by 46% over 2008, and by 2020, there will be a 68% increase?predominantly because of shale.
While U.S. oil production hit a 15-year high in 2012, almost all the increase in production has come from shale development on privately owned lands. The U.S. government continues to restrict development on land that it owns. In fact, in fiscal years 2010?2011, oil production on federal lands declined 11%.
Source of Government Revenue
The IHS study finds that shale energy development is filling the coffers of cash-strapped governments. Government revenues from energy taxes and royalties were expected to reach $62 billion in 2012, rising to $110 billion annually by 2020. A total of $2.5 trillion in additional tax revenue, half going to state and local governments, will be generated by 2035.
?Thanks largely to shale, America now has access to enough natural gas to supply our nation for over 100 years,? Harbert says. ?In addition, shale will reduce the need for oil imports.?In fact, our study shows that by 2020 net oil imports will decrease by 60%, and America will spend $200 billion less on imported oil.?
An Energy Exporter
The shale energy boom has put the United States in the unfamiliar position of becoming a net energy exporter. The Energy Information Administration (EIA) reports that in 2011, for the first time in more than 60 years, the United States became a net exporter of gasoline, diesel, and other refined fuels. EIA says that the United States could become a net exporter of natural gas by 2035.
Energy companies, however, are faced with significant policy obstacles. A 37-year-old federal law prohibits oil drawn from American lands to be sold abroad with some exceptions, including exports to Canada and oil from the Alaskan North Slope.
Now, there is talk in Washington about putting a cap on natural gas exports, even as large increases in domestic supplies have driven natural gas prices to record lows. A study by Michael Levi of the Council on Foreign Relations found that American firms could make up to $3 billion annually by producing and exporting liquefied natural gas (LNG), the form to which natural gas must be converted to be transported overseas.
In May 2012, the Department of Energy approved the first new LNG export permit in years, allowing Cheniere Energy to export natural gas from its terminal in Louisiana. But the agency announced that it needs more time to consider a Sierra Club complaint against Cheniere?s plans. At least 15 other permits are waiting Energy Department approval.
Meanwhile, countries in Southeast Asia, including Singapore and Australia, are building out infrastructure to bring natural gas to market with an eye toward China and Japan. Closer to home, TransCanada Corp. plans to build and operate a $4 billion natural gas pipeline that will send North American gas to eager Asian markets.
Learn more at the Energy Institute?s Shale Works for Us website.
JOBS CREATED BY SHALE ENERGY DEVELOPMENT
GOVERNMENT REVENUE GENERATED BY SHALE ENERGY DEVELOPMENT
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Public release date: 29-Nov-2012
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