America has a lot of oil and natural gas that’s “unconventional” – energy trapped in shale and other rock formations that can be produced through horizontal drilling and hydraulic fracturing. So says a study released this week by respected energy consultant IHS Global Insight: By 2035, unconventional oil and natural gas development could yield more than $5.1 trillion in capital spending into the economy, support 3.5 million jobs and generate $2.5 trillion in cumulative federal, state and local tax receipts.
Big numbers, big deal – if we embrace it.
Speakers at a Vote 4 Energy event, “Energy and the Economy,” noted upsides to America’s vast unconventional oil and natural gas reserves – which IHS’ John Larson likened to a “tsunami of production” to hit over the next two decades. Some highlights:
Sean McGarvey – president, AFL-CIO Building and Construction Trades Department:
- With the right government policies, unconventional oil and natural gas can “put a floor under the U.S. economy.”
- Oil and gas developed with hydraulic fracturing can lift the middle class with good-paying jobs.
- For millions of skilled craft professionals, unconventional oil and natural gas signals jobs.
Owen Kean – senior director for energy policy, American Chemistry Council:
- Affordable natural gas is lowering manufacturing costs and attracting a number of jobs back to the U.S. that had gone offshore.
- Because of natural gas, chemical industry costs are one-third what they were five years ago – a benefit that’s rippling throughout the U.S. economy.
- A half-dozen petrochemical facilities could come online because of natural gas’ availability and affordability.
- The United States could be a global platform for providing “value added” products to world markets, including energy.
Ross Eisenberg – vice-president, energy and resources policy, National Association of Manufacturers:
- U.S. manufacturing, which already enjoys a global edge because of affordable and available energy, could increase that advantage with the unconventional development projected by IHS.
- “It’s clear we should be voting for energy.”
IHS’ Larson – vice-president, public sector consulting:
- Economic growth is dependent on the availability of stable, affordable energy – and unconventional oil and natural gas provides both.
- The infrastructure demands of increased unconventional oil and gas development – roads, pipelines and other facilities – will provide an economic stimulus of their own going forward.
Yet, potential isn’t reality. Speakers said threats to this economic growth, job creation and revenues to government include:
- Regulation and permitting policies that chill or block investments in energy projects or in the infrastructure needed to deliver energy from the shale plays to refiners and ultimately consumers. Larson said that without access to markets, energy is a commodity without value. He said production from energy-rich North Dakota is being constrained by infrastructure limitations.
- The U.S. Chamber’s Christopher Guith said his organization Identified more than 350 energy projects (including “green energy” ventures) that had been “stalled, stopped or delayed” by federal officials.
API President and CEO Jack Gerard said a common-sense regulatory structure is needed, one that encourages energy development instead of obstructing or killing it. Also needed is a fair tax system that fosters energy capital investment instead of discouraging it. Gerard:
“Study after study has shown similar results: We can produce more of the energy we need here at home, and doing so will create hundreds of thousands of good jobs for Americans who need them. … The revolution in shale energy is tilting the world’s energy axis towards the Western Hemisphere and toward the United States. This realignment could affect the global energy landscape and our economy for the rest of the century. … A revolution is occurring, and it is bringing good news for our economy and for American workers and a significant increase in government revenues. But how this revolution turns out is not a given and its benefits are not guaranteed.”
Larson called the potential of America’s unconventional oil and natural gas a once-in-a-hundred-years opportunity. Now, what will we do with it?