Energy Industry: Let Us Frack or the Economy Will Suffer

FILE - This Tuesday, Aug. 25, 2009 file photo shows capped wells in the foreground as Anadarko Petroleum Corp., drills a series of wells on a pad on a Weld County farm near Mead, Colo. in the northeastern part of the state. The drilling process called hydraulic fracturing, or fracking, is shaking up world energy markets from Washington to Moscow to Beijing. Some predict what was once unthinkable: that the U.S. won't need to import natural gas in the near future, and that Russia could be the big loser. 
AP
Alex Brown
Sept. 4, 2013, 8:30 a.m.

The boom in Amer­ic­an oil and nat­ur­al gas is help­ing the U.S. eco­nomy and its con­tri­bu­tions could sub­stan­tially in­crease by the end of the dec­ade, says a study re­leased Wed­nes­day by sev­er­al ma­jor play­ers in the fossil-fuel in­dustry.

But that boost, the re­port warns, comes with a caveat: Reg­u­la­tions on hy­draul­ic frac­tur­ing could stifle those gains and push the in­dustry’s eco­nom­ic be­ne­fits be­low even today’s levels.

The study, con­duc­ted by Col­or­ado-based IHS Inc. for sev­er­al trade as­so­ci­ations, looks at the eco­nom­ic im­pact of “un­con­ven­tion­al” oil and gas, en­ergy sources ex­trac­ted by us­ing tech­niques oth­er than tra­di­tion­al drilling. One ex­ample, hy­draul­ic frac­tur­ing, is used in North Dakota’s Bakken form­a­tion has helped spark the oil boom there, but has also been cri­ti­cized for its en­vir­on­ment­al im­pact.

The eco­nom­ic be­ne­fits of un­con­ven­tion­ally ex­trac­ted fuels are sig­ni­fic­ant, the study says. Among its find­ings:

  • More than 2 mil­lion work­ers are sup­por­ted by their pro­duc­tion, and that num­ber could hit 3.3 mil­lion by 2020.
  • The in­dustry’s con­tri­bu­tion to gross do­mest­ic product was $284 bil­lion in 2012, and could clear $468 bil­lion by the end of the dec­ade.
  • State and fed­er­al gov­ern­ments col­lec­ted $74 bil­lion in tax rev­en­ues from un­con­ven­tion­al oil and gas in 2012; that num­ber could sur­pass $125 bil­lion by 2020.
  • The in­dustry was re­spons­ible for $1,200 in dis­pos­able in­come per house­hold na­tion­aide in 2012; that num­ber could near $3,000 by 2020.

But that ex­tra money in con­sumers’ pock­ets (and the gov­ern­ment’s) isn’t guar­an­teed. The study’s pre­dic­tions get much more dire as it factors in po­ten­tial re­stric­tions on land use or ex­trac­tion meth­ods. Sup­por­ted jobs, it es­tim­ates, would fall to 1.2 mil­lion by 2020, a loss of 2.1 mil­lion jobs. GDP con­tri­bu­tion, es­tim­ated to ex­ceed 3 per­cent, would drop to less than 1 per­cent. And for the av­er­age con­sumer? The oil-and-gas-cre­ated dis­pos­able in­come, es­tim­ated to be above $2,500 for 2020, could drop be­low $500.

Back­ers of the study in­cluded the Amer­ic­an Pet­ro­leum In­sti­tute, Amer­ica’s Nat­ur­al Gas Al­li­ance, the Nat­ur­al Gas Sup­ply As­so­ci­ation, the U.S. Cham­ber of Com­merce, and the Amer­ic­an Chem­istry Coun­cil.

In a state­ment ac­com­pa­ny­ing the study, ISH Eco­nom­ics Vice Pres­id­ent John Lar­son em­phas­ized the in­dustry’s be­ne­fit to the con­sumer. The study “puts the un­con­ven­tion­al re­volu­tion in con­text as an im­port­ant but little un­der­stood pock­et­book is­sue for all Amer­ic­ans,” he said.

The Amer­ic­an Pet­ro­leum In­sti­tute ad­ded its own state­ment on the eco­nom­ic dangers of im­pos­ing more reg­u­la­tions. “To un­lock our full man­u­fac­tur­ing po­ten­tial, those in Wash­ing­ton must turn aside ef­forts that would im­pose du­plic­at­ive reg­u­la­tions on shale de­vel­op­ment, raise pro­duc­tion costs, and lim­it ac­cess to do­mest­ic re­sources,” said Kyle Isakower, API vice pres­id­ent for policy and eco­nom­ic ana­lys­is.

What We're Following See More »
STAFF PICKS
When It Comes to Mining Asteroids, Technology Is Only the First Problem
1 days ago
WHY WE CARE

Foreign Policy takes a look at the future of mining the estimated "100,000 near-Earth objects—including asteroids and comets—in the neighborhood of our planet. Some of these NEOs, as they’re called, are small. Others are substantial and potentially packed full of water and various important minerals, such as nickel, cobalt, and iron. One day, advocates believe, those objects will be tapped by variations on the equipment used in the coal mines of Kentucky or in the diamond mines of Africa. And for immense gain: According to industry experts, the contents of a single asteroid could be worth trillions of dollars." But the technology to get us there is only the first step. Experts say "a multinational body might emerge" to manage rights to NEOs, as well as a body of law, including an international court.

Source:
STAFF PICKS
Obama Reflects on His Economic Record
1 days ago
WHY WE CARE

Not to be outdone by Jeffrey Goldberg's recent piece in The Atlantic about President Obama's foreign policy, the New York Times Magazine checks in with a longread on the president's economic legacy. In it, Obama is cognizant that the economic reality--73 straight months of growth--isn't matched by public perceptions. Some of that, he says, is due to a constant drumbeat from the right that "that denies any progress." But he also accepts some blame himself. “I mean, the truth of the matter is that if we had been able to more effectively communicate all the steps we had taken to the swing voter,” he said, “then we might have maintained a majority in the House or the Senate.”

Source:
STAFF PICKS
Reagan Families, Allies Lash Out at Will Ferrell
1 days ago
WHY WE CARE

Ronald Reagan's children and political allies took to the media and Twitter this week to chide funnyman Will Ferrell for his plans to play a dementia-addled Reagan in his second term in a new comedy entitled Reagan. In an open letter, Reagan's daughter Patti Davis tells Ferrell, who's also a producer on the movie, “Perhaps for your comedy you would like to visit some dementia facilities. I have—I didn’t find anything comedic there, and my hope would be that if you’re a decent human being, you wouldn’t either.” Michael Reagan, the president's son, tweeted, "What an Outrag....Alzheimers is not joke...It kills..You should be ashamed all of you." And former Rep. Joe Walsh called it an example of "Hollywood taking a shot at conservatives again."

Source:
PEAK CONFIDENCE
Clinton No Longer Running Primary Ads
1 days ago
WHY WE CARE

In a sign that she’s ready to put a longer-than-ex­pec­ted primary battle be­hind her, former Sec­ret­ary of State Hil­lary Clin­ton (D) is no longer go­ing on the air in up­com­ing primary states. “Team Clin­ton hasn’t spent a single cent in … Cali­for­nia, In­di­ana, Ken­tucky, Ore­gon and West Vir­gin­ia, while” Sen. Bernie Sanders’ (I-VT) “cam­paign has spent a little more than $1 mil­lion in those same states.” Meanwhile, Sen. Jeff Merkley (D-OR), Sanders’ "lone back­er in the Sen­ate, said the can­did­ate should end his pres­id­en­tial cam­paign if he’s los­ing to Hil­lary Clin­ton after the primary sea­son con­cludes in June, break­ing sharply with the can­did­ate who is vow­ing to take his in­sur­gent bid to the party con­ven­tion in Phil­adelphia.”

Source:
CITIZENS UNITED PT. 2?
Movie Based on ‘Clinton Cash’ to Debut at Cannes
1 days ago
WHY WE CARE

The team behind the bestselling "Clinton Cash"—author Peter Schweizer and Breitbart's Stephen Bannon—is turning the book into a movie that will have its U.S. premiere just before the Democratic National Convention this summer. The film will get its global debut "next month in Cannes, France, during the Cannes Film Festival. (The movie is not a part of the festival, but will be shown at a screening arranged for distributors)." Bloomberg has a trailer up, pointing out that it's "less Ken Burns than Jerry Bruckheimer, featuring blood-drenched money, radical madrassas, and ominous footage of the Clintons."

Source:
×