WASHINGTON—Unconventional oil and gas production in the US offers significant job creation, economic growth and government revenues, according to a new study from Englewood, Colo. based research and consulting firm IHS.
It says the unconventional, or “tight” oil and gas sector (Tight refers to reserves extracted by horizontal drilling and fracking), will support more than 1.7 million jobs in 2012 at average wage levels dramatically higher than the general economy.
The number of jobs is expected to increase to 2.5 million over the next three years, eventually hitting nearly 3.5 million in 2035.
The study, America’s New Energy Future: The Unconventional Oil and Gas Revolution and the Economy estimates annual tight oil production—projected at 2 million barrels of oil per day (mbd) for 2012—will increase by nearly 70 per cent by 2015 to more than 3.5 mbd and rise to 4.4 mbd in 2020. Unconventional gas production is expected to increase 22 per cent to nearly 42 billion cubic feet per day (Bcf/d) in 2015 (65 per cent of total U.S. gas production) and reach more than 76 Bcf/d in 2035 (75 per cent of total U.S. gas production).
The study’s key findings include:
• Nearly $5.1 trillion in capital expenditures are expected between 2012 and 2035.
• Employment: nearly 1.8 million jobs in 2012; 2.5 million jobs in 2015; 3 million jobs in 2020; 3.5 million jobs in 2035.
• Unconventional energy activity will contribute $237 billion to GDP in 2012, increasing to $475 billion annually in 2035.
• Sector will generate more than $61 billion in federal and state government revenues in 2012; $91 billion in 2015; and $111 billion in 2020.
“Unconventional oil and gas production is unique in that it combines a highly capital-intensive industry with a broad domestic supply chain,” said John Larson, IHS vice president, public sector consulting.