Energy's Unexpected Jobs Boom
September 16, 2013
The rapid rise in shale gas and tight oil in the United States constitutes nothing less than a revolution in oil and natural gas. No longer can there be any doubt about the dramatic change in America's energy position, says Deniel Yergin, vice chairman of IHS.
- U.S. oil production is up 50 percent since 2008, when it was supposedly slated to run out of oil.
- Natural gas production has increased by 33 percent since 2005 and shale gas alone now constitutes about 45 percent of total natural gas production.
This has occurred amid a half-decade of deep recession and high unemployment. Indeed, without the boost from the unconventional oil and gas development, the U.S. economic picture would have looked even worse over the last few years.
- According to a new study from IHS, the unconventional energy boom increased average household disposable income in 2012 by $1,200.
- That figure is expectedto grow to $2,700 by 2020.
Government revenues are also seeing a boost on account of the rise of new energy production.
- The value chain associated with shale gas and tight oil contributed over $74 billion in additional federal and state government revenues in 2012.
- That figure is expected to reach over $125 billion by 2020.
Abundant, low-cost natural gas -- brought on by the emergence of shale gas -- is also transforming America's position as a manufacturer. It is important on an even larger scale for businesses that rely heavily on natural gas or electricity generated with natural gas -- ranging from petrochemicals and fertilizer, to food producers and glass manufacturers. For these companies, low-cost natural gas is a game changer and will stimulate an estimated $350 billion of new investment in the United States over the next dozen years.
For the United States, this demonstrates the widening opportunity resulting from the rise of unconventional oil and gas.
Source: Daniel Yergin, "Energy's Unexpected Jobs Boom," Fortune, September 5, 2013.
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