Unconventional oil and gas activity is already revolutionizing America's energy future and bringing enormous benefits to its economy, Director of Consulting Energy and Natural Resources at IHS Jerry Eumont said. Net petroleum imports have fallen from 60 percent of total consumption in 2005 to 42 percent in October 2012.
The recent surge in unconventional oil and gas and its effect in the United States was the topic of discussion at the American Petroleum Institute’s (API) Houston Chapter luncheon Tuesday.
U.S. oil production, which has risen 25 percent since 2008, reached about 8.5 million barrels per day in 2012, Eumont said.
Tight oil is contributing the most to this increase due to recent advances in energy development. Unconventional natural gas is also contributing to the transformation in the natural gas market. A dozen years ago, shale gas production was only 2 percent of the nation's total natural gas production but represents 37 percent today.
This "renaissance" in the nation's unconventional market means an increase in employment – about 1.7 million jobs were created in 2012, Eumont noted. This number is projected to increase to 2.9 million jobs by the end of the decade and 3.4 million in 2035.
"Job creation in the shale plays is occurring in the oil company and service side, but is also occurring throughout the regions that have active plays," said Eumont. "Hotel, restaurants, construction, etc. are all benefiting from this activity. The impact as it trickles down is tremendous."
Unlocking unconventional energy will generate millions of jobs and billions in government receipts, Eumont added.
This energy renaissance is expected to make significant contributions to the U.S. economy through direct employment, its many and diverse connections with supplier industries, the amount of spending this direct and indirect activity supports throughout the economy, and the revenues that flow to federal and state and local governments.
IHS expects substantial growth in capital expenditures and employment to occur in support of the expansion of production within the unconventional sector:
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