Economic Benefits of Fracking and Horizontal Drilling
December 17, 2014
Hydraulic fracturing and horizontal drilling techniques have opened American shale and allowed the United States to capitalize on its vast oil and gas resources trapped in rock formations across the country. Today, 30 percent of American liquid fuel production and 40 percent of natural gas production is due to shale, and the Energy Information Administration expects oil and gas production to grow by a respective 30 percent and 60 percent over the next decade.
A new report from the Congressional Budget Office details exactly how shale drilling technologies have benefited consumers as well as the economy:
- Without shale gas, natural gas costs in 2040 would be 70 percent higher than they are projected to be.
- In 2020, GDP will be 0.7 percent higher than it would have been without shale. By 2040, GDP will be 0.9 percent higher than it would have been without shale.
- The federal government's tax revenues will be $35 billion higher in 2020 due to shale energy than they otherwise would have been.
According to the report, the Marcellus Shale (in New York, Pennsylvania and West Virginia) contains the most recoverable shale gas (at 25 percent), followed by Texas and Louisiana's Haynesville-Bossier Shale (15 percent), Texas' Eagle Ford Shale (10 percent) and Texas' Barnett Shale (10 percent). Forty percent of recoverable shale oil lies in the Eagle Ford and Austin Chalk Shales in Texas, while another 20 percent is in North Dakota and Montana's Bakken Shale.
Source: "The Economic and Budgetary Effects of Producing Oil and Natural Gas From Shale," Congressional Budget Office, December 2014.
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