Lately a couple of news stories have really helped drive home the ways in which our current energy revolution is benefiting the United States – from improving the environment by reducing emissions to driving economic growth and strengthening American energy security.
What these stories are doing is fleshing out the point made a year ago by the international consultancy IHS that the benefits of unconventional oil and gas development are felt even in those states without oil and/or gas production.
Consider this NPR segment highlighting some of the benefits New York State is reaping from hydraulic fracturing. There’s an irony here because New York has effectively prohibited producing energy through hydraulic fracturing.
Despite the Empire State’s moratorium on shale energy production, the abundance of natural gas being produced in places like the Pennsylvania portion of the Marcellus Shale (which alone accounts for 18 percent of total U.S. production) is helping effect a dramatic transformation in New York City.
According to NPR, buildings that have traditionally used oil for heating are now switching to natural gas, which burns much more cleanly and produces fewer greenhouse gas emissions. (Similarly, switching from coal to natural gas in power generation in the broader economy has helped bring the nation’s energy-related CO2 emissions to their lowest levels in two decades.)
So the air in New York is being cleaned thanks to hydraulic fracturing that is taking place in Pennsylvania.
The story notes that “it appears many New Yorkers have not made a direct connection between fracking and the increasing availability of natural gas in their region.” Let’s hope they do.
Wisconsin is another state that is benefitting from shale energy production, even while none is actually occurring within its borders. That is because, to quote The Wall Street Journal, when it comes to fracking, “Sand is the New Gold.”
The process of hydraulic fracturing requires pumping large amounts of sand into a well to hold open the tiny hairline fissures once the shale rock is cracked and allow fuel to flow out. Wisconsin’s sand is thought to be particularly well-suited for this purpose. And with the increase in hydraulic fracturing in North Dakota’s Bakken Shale, among other locales, there’s been a huge surge in demand for Wisconsin sand.
How big a surge? “State officials now estimate more than 100 sand mines, loading, and processing facilities have received permits, up from just five sand mines and five processing plants operating in 2010.” (For more, see this 2012 report from the Minneapolis Federal Reserve Bank.)
A ten-fold increase in sand mining activity in a few years obviously means more jobs, more economic activity, and more revenue for state and local governments.
Rising production = increased security
Finally, I’ll note the news from the U.S. Energy Information Administration (EIA) this week that domestic oil output has soared 18 percent since last year, thanks to hydraulic fracturing and directional drilling unlocking supplies in the nation’s various shale formations.
That means more than you think. Consider this line from Bloomberg’s report on EIA’s announcement: “Imported crude and petroleum products will dip to 28 percent of domestic demand next year, the lowest since 1985 and down from a peak of 60 percent in 2005.”
From the standpoint of energy security, the United States is unquestionably better off today than at any point over the last several decades. The positive implications for our overall national security, and for the nation’s diplomatic efforts overseas, are unmistakable – and that has everything to do with the contributions of America’s oil and gas industry.