As policymakers in Washington continue to debate ways to stimulate the economy and boost revenue, there’s a new case study that shows just what can be achieved when the energy industry is able to invest and produce American energy resources.
On Tuesday, the Fort Worth Chamber of Commerce released an analysis of a decade of drilling in the Barnett Shale natural gas formation in 24 North Texas counties. The study was conducted by the Perryman Group and describes in detail the positive large-scale economic effects generated by drilling in the Barnett Shale.
According to the study, the cumulative regional economic benefits between the 2001 and 2011 period include more than $65 billion in economic output. For 2011 alone, the study estimates the Barnett is responsible for $11.1 billion in annual economic output and more than 100,000 jobs, just in the North Texas region alone. That’s good news going forward.
Barnett Shale development has become an important source of tax revenue to state and local entities. This year alone, counties and cities in the North Texas area are estimated to receive $730 million in tax revenues. When combined with the $911 million in additional tax revenue the state will likely receive, the Barnett Shale is estimated to generate $1.6 billion in tax revenue for the state of Texas in 2011.
These are impressive numbers, and they provide a bit of good news amid the recent flurry of bleak economic forecasts.
The study provides lessons about how an activity that is truly stimulative can spread its benefits through the economy. It details how “direct spending for exploration and production activity related to the Barnett Shale leads to multiplier effects through the economy which, in turn, initiate a chain of spillover business stimulus throughout the area.”
That spillover stimulus is substantial. The calculated economic output for the region is estimated to be 9.4 percent higher than it would be without the Barnett Shale, while personal income in the region is roughly 8.5 percent higher. And approximately 38.5 percent of the incremental growth in the economy of the region over the past decade has been the result of Barnett Shale activity.
I hope this study is widely read by legislators and other public officials in Washington, D.C., and state capitals like Albany and Little Rock, where debates are continuing about the importance of encouraging domestic energy production via shale gas.
The multiplier effect of economic activity rippling outward from shale production is not just confined to Texas, of course. Abundant domestic supplies of natural gas benefit the nation’s economy as a whole. Pennsylvania, North Dakota, West Virginia and many other states can attest to the jobs, royalties and tax revenues that shale production creates. I’ve also written about how the shale gas boom is reinvigorating the nation’s petrochemical industry, which makes plastics and other building blocks of modern manufacturing.
It’s also saving consumers money. Last month the chairman of the Secretary of Energy Advisory Board’s Natural Gas Subcommittee noted in the Washington Post that increased supplies from shale “has meant, since 2009, that consumers’ costs of natural gas to heat homes or generate electricity have fallen by more than half.”
Perhaps the best news of all from the study is that while the production from the Barnett Shale has been a notable source of economic stimulus to Texas as well as an important domestic fuel source for the nation, only a small portion of total estimated production has occurred to date. With increasingly sophisticated technology and growing energy demand, the authors conclude, “The Barnett Shale is expected to continue to generate economic stimulus for local area and state economies for decades to come.”
The Perryman Group’s findings provide policymakers a playbook for spurring economic growth, creating jobs, and reducing deficits by supporting development of America’s enormous unconventional natural gas resources.
Wonderful that Texas Chamber of Commerce has taken some interest in shale exploration of natural gas in 21 of their counties. My question is what took so long for them to communicate applications? I mean many office buidlings were empty because the loss of the oil boom and now all of a sudden their is money in that shale. Pehaps we will see a new tv series called “Dallas” again! Who knows with the politics being pandered down in Texas maybe they will form their own country and thus be safe from EPA laws and other issues.
Are we all so ignorant to the simple facts that oil, natural gas, coal, and non-silicate minerals are non-renewable and will only end in the loss of jobs? The pollution and environmental degradation caused by the use of non-renewable resources, from the mining all the way to the landfill are a waste and everyone knows that any jobs created are only temporary. We only have 40 years left of oil. Tar sands, shales, even natural gas are pointless and those jobs will only last a short whlie. A good example of this are the ghost towns that thrived on coal mines. The same will happen. I’m so glad everyone on this web site cares about their children. Nature can not be fooled.
Ah yes, the sky is falling. Remember all to well when the economic forecast for oil reserves was very grim in deed. The prognosis indeed was very grim, with proven global reserves expected to be rapidly declining, and surely would begin to run out in 20 or 30 years.
That prognosis was declared, not by some flaky far left doomsayer, but respected and knowledgeable oil industry experts. We were told in no uncertain terms we were to expect this calamity to occur with absoulute certainty.
That prediction was made in the mid-1970′s, and we were supposeded to begin a rapid decline in the 1990′s!
What happened? Bad numbers? Lousy economists? OPEC scare mongers? Nope. It was those sneaky oil companies, investing in new technology which would extend the life expectancies of then known reserves, and adding to reserves through far superior exploration techniques. Not to oversimplify, but that about sums up the why those forecasts proved to be wrong. No different than predicting the weather, well sorta.
So, if you want to believe otherwise, that is your constltutional right to do so. But, please get your facts straight before crying the sky is falling. Just think, if we had never exploited the oil reserves… read more »
…in the ground, we would have run out of whales by now and wouldn’t know the joys of whale watching.
And, if you really want to cry about the sky falling, remember even the sun will someday lose its’ energy and will no longer give us the light of day thay we so eagerly crave and need.
Smile and enjoy life!
What took so long, is probably a mix of things! Investing in new technology and plays which previously were not economically viable, do not occur overnight. Investiingis also an unproven event and comes with a certain degree of risk. I don’t know anyone willing to invest without a certain degree of, well, certainty.
Certainty is rarely possible, so most of us are willing to take a risk if the certainty is within reasonalbe bounds. I don’t think anyone would or could argue with someone else proceeding into risky ventures with a great deal of caution.
What happened is more than likely a combination of things. Risk was certainly one aspect, the other being demand. Without sufficient demand, no one in their right mind would proceed with a huge investment, and when we are looking at shale, I believe the cost factors are even greater.
So give it some slack, and be glad that we are finding more ways to develop our precious assets. Just becaus an oil company is doing the investment and taking the risk, doesn’t necessarily indicate a sinister plot to deceive the public. Give it a break and be glad someone is willing to take the risk on your… read more »
…behalf.
Wonderful that Texas Chamber of Commerce has taken some interest in shale exploration of natural gas in 21 of their counties. My question is what took so long for them to communicate applications? I mean many office buidlings were empty because the loss of the oil boom and now all of a sudden their is money in that shale. Pehaps we will see a new tv series called “Dallas” again! Who knows with the politics being pandered down in Texas maybe they will form their own country and thus be safe from EPA laws and other issues.
Are we all so ignorant to the simple facts that oil, natural gas, coal, and non-silicate minerals are non-renewable and will only end in the loss of jobs? The pollution and environmental degradation caused by the use of non-renewable resources, from the mining all the way to the landfill are a waste and everyone knows that any jobs created are only temporary. We only have 40 years left of oil. Tar sands, shales, even natural gas are pointless and those jobs will only last a short whlie. A good example of this are the ghost towns that thrived on coal mines. The same will happen. I’m so glad everyone on this web site cares about their children. Nature can not be fooled.
Ah yes, the sky is falling. Remember all to well when the economic forecast for oil reserves was very grim in deed. The prognosis indeed was very grim, with proven global reserves expected to be rapidly declining, and surely would begin to run out in 20 or 30 years.
That prognosis was declared, not by some flaky far left doomsayer, but respected and knowledgeable oil industry experts. We were told in no uncertain terms we were to expect this calamity to occur with absoulute certainty.
That prediction was made in the mid-1970′s, and we were supposeded to begin a rapid decline in the 1990′s!
What happened? Bad numbers? Lousy economists? OPEC scare mongers? Nope. It was those sneaky oil companies, investing in new technology which would extend the life expectancies of then known reserves, and adding to reserves through far superior exploration techniques. Not to oversimplify, but that about sums up the why those forecasts proved to be wrong. No different than predicting the weather, well sorta.
So, if you want to believe otherwise, that is your constltutional right to do so. But, please get your facts straight before crying the sky is falling. Just think, if we had never exploited the oil reserves… read more »
…in the ground, we would have run out of whales by now and wouldn’t know the joys of whale watching.
And, if you really want to cry about the sky falling, remember even the sun will someday lose its’ energy and will no longer give us the light of day thay we so eagerly crave and need.
Smile and enjoy life!
What took so long, is probably a mix of things! Investing in new technology and plays which previously were not economically viable, do not occur overnight. Investiingis also an unproven event and comes with a certain degree of risk. I don’t know anyone willing to invest without a certain degree of, well, certainty.
Certainty is rarely possible, so most of us are willing to take a risk if the certainty is within reasonalbe bounds. I don’t think anyone would or could argue with someone else proceeding into risky ventures with a great deal of caution.
What happened is more than likely a combination of things. Risk was certainly one aspect, the other being demand. Without sufficient demand, no one in their right mind would proceed with a huge investment, and when we are looking at shale, I believe the cost factors are even greater.
So give it some slack, and be glad that we are finding more ways to develop our precious assets. Just becaus an oil company is doing the investment and taking the risk, doesn’t necessarily indicate a sinister plot to deceive the public. Give it a break and be glad someone is willing to take the risk on your… read more »
…behalf.