A Wall Street Journal report [subscription required] quotes energy analysts who say America will cut its Middle East oil imports in half by the end of the decade and could become oil-independent by 2035, thanks to North American production.
To those who see the unique chance for the United States to increase domestic oil and natural gas production and fundamentally change this country’s energy equation, we say welcome to the fold. The Journal’s sources are saying things similar to what others have said, including Wood Mackenzie’s analysis last fall, Citi’s 2020 Energy Outlook released this spring and this week’s study by Harvard’s Kennedy School. Of course, along with the energy, there’s job creation and tax revenue generated for government treasuries. All good.
Look at the analyses and there’s a common thread: hydraulic fracturing. It’s the game-changer for the United States, unlocking oil and natural gas resources from shale and other tight rock formations. It is responsible for the rewriting of U.S. natural gas reserve estimates, and its use in oil development is expanding in North Dakota, Texas and other states.
USA Today highlights the fracking boom in a big article, here. There’s a neat infographic with the story, detailing some hydraulic fracturing basics. The piece’s main thrust is the fantastic economic and energy opportunities afforded by fracking, as well as some of the challenges:
“Even as the price of natural gas dropped to around $2 for a thousand cubic feet this warm winter — half last year's price — states caught up in the boom have enjoyed an employment windfall when jobs nationally have been hard to come by. Since 2009, Pennsylvania has 38,900 natural resources jobs, up 72%; North Dakota has 21,900 jobs, a 172% surge, according to Federal Reserve data. These numbers don't include jobs added to service the fracking industry — everything from selling workers donuts to making steel pipes used in the process.”
That’s what dynamic growth, driven by energy derived from hydraulic fracturing, looks like. The article goes on:
“For many others, the good times are rolling. Welders employed in the natural gas industry average $28.48 an hour, 6 bucks more an hour than other industries pay, according to the Bureau of Labor Statistics. ‘We're still hiring,’ says David Schultz, a plant manager for Forum Energy Technologies' metal fabrication plant in Clearfield, Pa. … About half the fracking well tanks that are manufactured or fixed at the plant are bound for Ohio and the Utica shale, Schultz says.”
No question, there are challenges, as the article notes. Traffic, noise, stretched public services, scarce hotel space, long lines at restaurants. People are concerned the boom will go bust, although industry leaders repeatedly stress the long-term nature of their shale investment. Ohio State University agricultural extension agent Mike Hogan:
“The number of trucks on the roads is incredible. But the money is more than welcome here.”
That seems to be the dominant attitude in other shale states. Energy development is bringing dramatic growth that occasionally tests local infrastructures. But it’s also lifting local, regional and state economies – taking up what Citi’s Daniel Ahn, one of the authors of its energy outlook, describes as slack in our economy. “This couldn’t happen at a better time,” Ahn says.