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Sean Hackbarth A natural gas drilling rig in Bradford County, PA.A natural gas drilling rig in Bradford County, PA. Photo credit: Daniel Acker/Bloomberg.

Last week, I linked to a study from the University of Illinois at Chicago that found that 45,000 construction jobs were created by the natural gas boom in the Marcellus Shale region of the Northeast. The report states [emphasis mine]:

From 2008 to the first half of 2014, over 72 million hours of direct and indirect construction labor has been worked on natural gas and oil projects related to the Marcellus Shale. These hours translate to 36,321 actual construction workers (based on a standard 2,000 hours of work) and engaged in oil and gas work that would not have occurred “but for” natural gas exploration in the Marcellus Shale geological footprint. 

On a call with reporters on the release of the study, President of North America’s Building Trades Unions, AFL-CIO Sean McGarvey explained that the timing of the shale boom in the region couldn’t have been better for construction workers in the region:

At a time when the U.S. construction industry was in the midst of what was arguably a depression, … one of the few, if not only, bright spots, were the jobs that were created by virtue of domestic oil and gas development.

Here’s a chart from the study that illustrates how critical natural gas development has been for employing construction workers since the Great Recession hit. Shale energy construction employment increased as the non-shale energy construction employment decreased. 

Marcellus Shale gas construction employment unaffected by recession.Marcellus Shale gas construction employment unaffected by recession.

Other union leaders have praised the Marcellus Shale as a job-creator. Earlier this year, Laborers' International Union (LIUNA) mid-Atlantic regional manager Dennis Martire, called shale “a lifesaver and a lifeline for a lot of working families.” LIUNA members logged 400,000 hours on energy-related jobs in 2008, but that increased to 5.7 million hours in 2012.

From drilling rigs to pipelines and other energy infrastructure, record-levels of natural gas production in the Marcellus Shale is fueling construction job growth. Barring federal regulators needlessly piling duplicative regulations on hydraulic fracturing, the region should continue seeing job growth.

Sean Hackbarth  Daniel Acker/Bloomberg.An oil pump near Williston, North Dakota. Photographer: Daniel Acker/Bloomberg.

North Dakota oil production continues setting records. In August, its portion of the Bakken formation produced its one billionth barrel of oil.

The state averaged over one million barrels of oil daily for the fifth straight month. In addition, Mark Perry at the American Enterprise Institute points out, 500,000,000 barrels of oil have been produced in just the last two years.

Accumulated oil production from the Bakken area of North Dakota.Accumulated oil production from the Bakken area of North Dakota.

Perry also notes that drillers continue to improve using horizontal drilling and hydraulic fracturing. Daily production per well has more than doubled from 52 barrels in 2009 to 101 barrels in August.

This growth in oil production has helped the United States become the world’s top petroleum producer, lead to a dramatic drop in oil imports, and allowed us to seriously consider lifting the oil export ban.

For North Dakota, the shale boom has meant a 2.8% unemployment rate and stories of people making $50,000 delivering pizzas. If you want a job in North Dakota, you can find a job. North Dakota’s success illustrates the economic benefits of shale energy. Shale oil and natural gas development could support 3.9 million jobs by 2025, according to an Institute for 21st Century Energy study.

If federal regulators refrain from imposing duplicative regulations and fix the permitting process to open federal land to development, we can expect continued growth.

Sean Hackbarth The U.S. Department of Energy's nuclear waste facility at Yucca Mountain, Nevada.The U.S. Department of Energy's nuclear waste facility at Yucca Mountain, Nevada. Photo credit: U.S. Department of Energy.

One year after a federal judge told the Obama administration that it couldn’t ignore federal law by shutting down development of a permanent nuclear waste facility in Yucca Mountain, Nevada, the Nuclear Regulatory Commission released a report finding that the site would be safe:

The Nuclear Regulatory Commission (NRC) issued Thursday’s report after the U.S. Court of Appeals for the District of Columbia Circuit directed the agency to resume the evaluation last year.

The NRC said after reviewing information from the Energy Department that it found the site “design meets the requirements that apply after the repository is permanently closed.”

That means the proposed site can safely store the nation’s nuclear waste for one million years — the federal threshold — once it’s closed.

Senator Lisa Murkowski (R-AK), ranking member of the Senate Energy and Natural Resources Committee, praised the report:

Knowing that the Yucca Mountain site is a safe, worthwhile investment as a permanent repository for the country’s spent nuclear material is welcome, if long-overdue, news, and I call on the NRC to resume its license review process and for Congress to provide the NRC with the funds needed to complete its review.

In 2002, Congress approved Yucca Mountain as a disposal site and $9.5 billion was spent to develop it. However, as the Institute for 21st Century Energy’s Matt Letourneau wrote, “The administration effectively cancelled the Yucca Mountain repository and has failed to provide any alternative to on-site storage" for America's nuclear reactors. At the same time, Senator Harry Reid (D-NV) has blocked any efforts to fund the program from passing the Senate.

Federal policy is to build a facility to safely store nuclear waste. (And for over 30 years, many electricity users paid fees to fund the facility.) As the NRC report states, Yucca Mountain can accomplish this. It’s time for the Obama administration and Senator Reid to follow the law, restart the program, provide the funding needed to license and build the facility, and solve this decades-old problem once and for all.

Sean Hackbarth Gas-drilling site on top of the Marcellus Shale in Lycoming County, PA. Photo credit: Nicholas A. Tonelli. Licensed under a Creative Commons Attribution 2.0 Generic license.

Here are four examples of how shale energy development is working on a state level.

1. Natural gas development in the Marcellus Shale is creating thousands of jobs, according to a University of Illinois at Chicago study:

Natural gas exploration in the Marcellus shale formation has created just over 45,000 construction jobs, a new study has concluded.

The study looked at a 13 trades related to natural gas exploration from 2008 through the first half of 2014.

It was commissioned by the Oil and Natural Gas Industry Labor-Management Committee, a coalition of labor and industry interests in oil and gas.

“A preliminary examination of employment data in states related to the Marcellus Shale Play … reveals that natural gas exploration has been a strong engine of job growth,” the researchers with the University of Illinois concluded.

The figures are based on actual hours worked in Pennsylvania, West Virginia, Maryland and Ohio, assuming 1,600 hours in a year for a worker.

Earlier this year, consulting firm FMI estimated that "more than $330 billion will be spent on oil- and gas-related construction during the next four years.”

2. Farther west, Mark Green writes about a new study on the positive economic effects that oil and natural gas development generates in Colorado:

Just looking at 2012, oil and natural gas activity generated more than $200 million for Colorado schools, supported nearly 94,000 jobs in the state and created more than $23 billion [sic] in state economic activity, according to the report conducted by the university’s Leeds School of Business and commissioned by API.

3. An Ohio town in the Utica Shale is experiencing an economic boom from developing natural gas from the Utica Shale:

In Marietta, hotels are full. Restaurants are booming. The city’s median household income shot up more than 20 percent in one year to a 2013 estimate of $40,286, according to the U.S. Census Bureau.

At Marietta’s auto dealerships, the increase in business has been immediate and dramatic.

“Three months ago, we couldn’t get them financed on a $5,000 car,” Marietta dealer Jim Cobb says of one of his recent Chrysler-Jeep-Dodge-Ram customers.

“Suddenly, they come in and buy a $60,000 truck and pay you cash for it.”

4. Let's not forget North Dakota:

Ground zero for America's "shale revolution" in gas and oil production, North Dakota is also the reigning title-holder for lowest unemployment among the 50 states.

There were more unfilled jobs in September than job applications within the state, where oil field workers can make six-figure salaries and even the fast-food restaurants dangle hiring bonuses of $300 or more. The state has been recruiting specifically from Michigan for workers of all stripes and skill levels — hoping to entice entire families to relocate and grow roots.

North Dakota's official 2.8% jobless rate in August is essentially full employment, allowing just about anyone who wants a job to get one

These economic benefits will continue if we embrace America’s energy abundance. A 2012 report from the U.S. Chamber’s Institute for 21st Century Energy stated, “By 2035, unconventional oil and gas will add almost $475 billion dollars to the economies of the lower 48 US states.”

Sean Hackbarth Person pumping gas.Photographer: Andrew Harrer/Bloomberg.

Since the shale boom has made the U.S. the world’s top petroleum producer, we have the opportunity to end the nearly 40-year old crude oil export ban. However, some fear this will mean higher gasoline prices. A new study and comments from a top federal energy expert indicate that won’t be the case.

An Aspen Institute’s study found that “prices of various grades of oil are set in world markets.” Lifting the ban and allowing U.S. oil to be sold globally would put “modest” downward pressure on gasoline prices

The report also found that ending the export ban would encourage more domestic energy development resulting in growth to the manufacturing sector and the economy as a whole:

An average of 37,000 manufacturing jobs would be created every year through 2025 A total of 650,000 jobs would be added at peak in 2019 Household income would rise by $2,000 to $3,000 in 2025

Other recent studies have also concluded that there will be positive effects from lifting the oil export ban. An IHS study estimated $746 billion in new investment and 394,000 new jobs per year through 2030, and a Brookings Institution study projects a $600 billion to $1.8 trillion boost to the economy, while resulting in lower gasoline prices.

As if these studies weren't enough, Adam Sieminsk, administrator of the U.S. Energy Information Administration, gave energy analysts more to chew on by telling Platts Energy Week TV, “Exports might not have that much of an impact on gasoline prices.”

Like the conclusion from the Aspen Institute study, he said, “Preliminary evidence suggests that gasoline prices get set in the global markets." He then explained the mismatch between domestic production and refining capability:

We have a lot of light sweet crude. We have a refining system that's geared to run heavier sour crude.

In May, EIA concluded that 98% of the growth in oil production has comprised of lighter crude, and production of that type of oil “will continue to outpace that of medium and heavier crudes.”

Trade can reduce this mismatch. “[E]xporting some of the stuff that we don't need and getting in some of the stuff that we do need might be something that is best for the economy,” Sieminsk added.

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