The United States is at the very beginning of an energy revolution—one that has already begun to unlock environmental and economic benefits. According to a newly-released study from the American Gas Foundation (AGF) and IHS CERA, “Fueling the Future with Natural Gas: Bringing it Home,” shale development will play a fundamental role in increased North American energy production for the next 100 years. The question is no longer “do we have enough?” but rather, “how do we best take advantage of this tremendous opportunity?”
This represents a dramatic turn of events from just a few short years ago, when the United States was on the verge of an energy crisis. Thanks to hydraulic fracturing and horizontal drilling, the United States is now home to an abundant and affordable supply of clean-burning natural gas. This energy abundance is opening doors in critical areas of the U.S. economy, improving the quality of life for millions of people, creating much-needed jobs, protecting the environment and enhancing national security.
In 2000, total shale gas production was at one billion cubic feet (Bcf) per day, or roughly two percent of the total natural gas production in the United States Lower 48. By 2012, natural gas produced from shale accounted for 39 percent of total production, with expectations it will account for 58 percent by 2035. This has shifted the United States from being a net importer of natural gas to one with the capacity to become a net exporter. According to the report, “the United States is essentially self-sufficient in natural gas, producing 92% of its total supply and receiving the rest from Canada.”
This is not only an incredible opportunity for the United States, but one that is helping the nation reduce its carbon emissions, while also helping to provide other public health benefits.
The same technology that has unlocked vast quantities of natural gas reserves has also been extremely successful in unlocking previously untapped oil reserves. According to the report:
“Production of unconventional ‘tight’ oil has increased from 100,000 barrels per day in 2003 to an estimated 2 million barrels per day (mbd) in 2012.” (emphasis added)
Increased domestic production has driven down oil imports from 60 percent in 2005 to only one-third of total demand in 2012. Needless to say, this increased production of oil and natural gas on U.S. soil has strengthened the United States’ energy security and slashed our reliance on foreign countries for our energy needs.
In just a few short years, shale development has brought billions of dollars into the U.S. economy and provided myriad high-paying jobs to hard working Americans. At the study’s release today, American Gas Association president and CEO Dave McCurdy referred to the “industrial and manufacturing renaissance” driven by clean and abundant natural gas. According to the report:
- “Unconventional oil and gas activity and energy-related chemical manufacturing, directly or indirectly, were responsible for 2.1 million jobs, nearly $284 billion in value added to GDP and more than $74 billion in government tax revenues in 2012. By 2025, these contributions are expected to grow to 3.9 million jobs, $533 billion (constant 2012 $) in value added to GDP, and $138 billion (constant 2012 $) in government revenues.” (emphasis added)
- “IHS CERA projects that upstream capital expenditures will average some $200 billion (nominal $) per year during 2012-2035 for a total expenditure of more than $5 trillion over this period.”
Even closer to home than surging local economies and high-paying jobs, the success of shale development is putting money directly back into the wallets of consumers. An IHS CERA report from September 2013 found that shale development has increased average household incomes by roughly $1,200, due mostly to the lower energy costs made possible by abundant natural gas. These savings will steadily increase to $2,000 in 2015 and more than $3,500 by 2025.
Thanks to responsible shale development, the United States is reducing environmental impacts, while Americans are going back to work and saving money at home. And the best news? It’s only just beginning.