Energy historian Daniel Yergin has a must-read piece in The Wall Street Journal that gives a big-picture view of the unconventional oil and gas revolution transforming the American economy.
The Journal piece accompanies the recent publication of a report prepared by Yergin’s IHS consulting group. “America’s New Energy Future” highlights the economic contribution of dramatically increased oil and gas production from unconventional sources like shale and tight rock.
The numbers reported by Yergin and IHS are extraordinary:
- More than 1.7 million new American jobs created so far, a number that could rise to as much as 3 million by 2020. The majority of those jobs arise in a wide range of manufacturing and other sectors that support oil and gas drilling.
- A 25 percent increase in domestic oil production since 2008, which Yergin notes is “the highest growth in oil output of any country in the world over that time period.”
- Nearly $62 billion in additional federal, state and local tax receipts in 2012, and more than $2.5 trillion in cumulative added tax revenues between 2012 and 2035.
Yergin notes that the enormous increase in domestic natural gas production could well spur a continued manufacturing renaissance in the United States, particularly for energy-intensive industries or those – like the chemical business – that rely on natural gas as a feedstock.
To give an example of what that could mean, consider ExxonMobil Chemical Company’s recent permit application to expand production along the Gulf Coast. Plans for the multi-billion dollar project include constructing a new ethane cracker – a project explicitly designed to capitalize on abundant supplies of domestic natural gas.
Pending regulatory approval and a positive investment decision, the project has the potential to create 10,000 construction jobs. Once completed, it will add 350 permanent positions to the company’s workforce in Baytown, TX. It hardly stops there. If this project proceeds, the effects will ripple through the community, supporting more than 4,000 jobs in the greater Baytown area, increasing regional economic activity by $870 million annually, and generating more than $90 million per year of additional local tax revenue.
There’s been a lot of bad news on the employment front over the past several years. It’s great to see this kind of recognition of the oil and gas industry’s positive contribution to the U.S. jobs picture.