Another independent study titled “America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy,” released recently concluded that shale oil and gas drilling and development has helped create 1.75 million jobs in the last few years in the United States. The study also indicated that there was a possibility of 2.5 million new jobs by 2020 and 3.5 million by 2035. The study was done by IHS-CERA, an independent global energy research firm, and was commissioned by a group led by the US Chamber of Commerce’s Institute for 21st Century Energy. Other organizations that supported the research for this study are the American Petroleum Institute, the American Chemistry Council, and the Natural Gas Supply Association.
This study is the first of a series of three intended to shed significant light on the impact of shale development. This first study, titled “National Economic Contributions”, is about the impact of “upstream operations,” that is, oil and gas extraction. The second study will look at the impacts of shale development on a state by state basis. The third will go into “downstream operations”, or the impact of shale development after production.
This particular effort claims to be the first to examine the nationwide impact of shale energy development and to provide concrete numbers about the beneficial developments. Karen Harbert, the President and CEO of the Energy Institute, explained that this study is proof that shale energy is a game changer for the US. She said, “This new, comprehensive study demonstrates 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.”
The report also indicates that this industry is also poised to directly benefit local governments at all levels. For example, this year shale is responsible for $62 billion in tax revenue according to this study. By 2035, shale energy development is expected to bring in more than $2.5 trillion in tax revenue, more than half going to state and local governments. This revenue can assist in paying down the deficit and can fund important programs for Americans. On top of that, trillions of dollars are expected to be invested by the energy industry as well, bringing continuing growth to our economy and creating jobs. In 2012 alone, $87 billion was invested in shale development.
Another obvious benefit of shale development discussed by the study is the continuing movement toward energy independence for the country. The research showed that, thanks to shale, the US now has enough natural gas to supply the country for 100 years. Shale development will reduce the need for oil imports by as much as 60 percent by 2020. Ms. Harbert said that the US would therefore spend $200 billion less on imported oil. Shale has already led to a 25% increase in oil production in the last four years. Further increases are expected, with 2015 numbers expected to be 46% higher than 2008 oil production, and a 68% increase by 2020.
While not discussed directly by this study, the profit generated by shale development also gets paid to shareholders of energy stocks, the majority of which are individuals like you and I, as well as retirement funds for individuals.
The “$64,000 Question” is this: are our local, state and federal government agencies going to work with energy companies to create balanced and responsible shale development, or will they be swayed by the false claims of some energy opponents? Remains to be seen, friends.
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