By Taylor Kuykendall, Reporter
A new study sponsored by the U.S. Chamber's Institute for 21st Century Energy puts hard numbers to the claim that shale gas could spark a revolution in American energy.
According to the study, unconventional energy development has already created 1.75 million jobs in its relatively short development period. By 2035, the study concludes, unconventional gas development will have generated more than 3.5 million jobs, reaching 2.5 million by as early as 2015.
Unconventional sources of energy include fuels extracted from oil sands, shale gas formations and deepwater drilling.
The study, "America's New Energy Future: The Unconventional Oil and Gas Revolution and the U.S. Economy" was conducted by energy consulting firm HIS CERA. The American Petroleum Institute, American Chemistry Council and Natural Gas Supply Association also sponsored the study.
"We've known for some time that shale energy is truly a game-changer for America—and now we can prove it," said Karen Harbert, president and CEO of the Energy Institute in a news release regarding the study. "This new, comprehensive study demonstrates that shale energy is already contributing over $200 billion to our economy, with much more to come, if policymakers at all levels of government don't stand in the way."
Shale gas development, such as that underway in northern West Virginia where the Marcellus Shale play is being developed, has become a significant source of new domestic energy.
"West Virginia has long been a leader in energy production, and the future is bright thanks to shale energy," said Doug Parsons, director of the Lewis County Development Authority. "We're already beginning to see the impact of shale energy in our community. In just five short years, Lewis County has gone from having one of the highest unemployment rates in the state to one of the lowest and it's all due to the shale industry."
Unconventional natural gas extraction is becoming the norm. Gas from unconventional sources accounts for nearly 65 percent of natural gas production.
"This growth in oil and natural gas production is fueled by the exploration and production industry, which is driving the unconventional revolution with over $87 billion in capital expenditures in 2012," the report states. "Since the majority of the technology, tools, and know how are home grown, an overwhelming majority of every dollar spent throughout this supply chain remains in the United States and supports domestic jobs."
Over the past four years, domestic production of oil has increased by over 25 percent. Domestic oil production, the study suggests, is expected to increase by 68 percent because of shale gas development. As a result, net oil imports are expected to drop significantly.
The benefits to government coffers are also significant.
"In 2012, unconventional oil and natural gas activity will contribute nearly $62 billion in federal, state and local tax receipts," the report states. "By 2020, total government revenues will grow to just over $111 billion. On a cumulative basis, unconventional oil and natural gas activity will generate more than $2.5 trillion in tax revenues between 2012 and 2035."
The industry is not without controversy. Issues regarding environmental protection, ownership rights and other issues are among the number of concerns of opponents of unconventional oil and gas development.
A statewide assessment of shale gas impact from IHS is expected to be released soon.