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In a weekly address to the nation back in March, President Obama addressed the crippling effect of gas prices on the economy, citing the creation of 'thousands' of American jobs through his renewable energy plan, and stating simply, "we can't drill our way out of this problem."
But a new report from IHS threatens that claim, and makes the prospect of 'thousands' of American jobs look paltry compared to the estimated 1.7 million created this year by implementing the safe development of unconventional means to extract oil and gas in the United States. The report also estimates that the number of jobs could grow to 3 million by the end of the decade.
So, can we drill our way to more jobs and economic prosperity? According to IHS - Yes we can!
The key lies in the aforementioned unconventional drilling techniques - such as horizontal drilling or the unnecessarily maligned hydraulic fracturing techniques - which unlock natural gas and oil trapped in the pores of dense rock formations.
These unconventional means require larger initial investments compared to their conventional counterparts, but the future payoffs are tremendous. IHS estimates that $2.1 trillion in capital will be spent on unconventional oil and gas extraction in the U.S. by the year 2035. That activity equates to 1.7 million jobs this year, 3 million by 2020, and 3.5 million by 2035.
Karen Harbert, president and chief executive officer of the energy institute, states "We've known for some time that shale energy is truly a game-changer for America - and now we can prove it."
She adds, "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."
The problem with such methods according to some of those policymakers however, is the perceived environmental risks involved in the techniques. Fracking of course, has long been a source of such controversy.
Energy expert Daniel Yergin seeks to allay those fears in his recent Wall Street Journal column, which outlines three major environmental considerations, and explains how he and a committee of peers have provided best practices and solutions to the Secretary of Energy regarding those considerations.
Yergin writes, "These initiatives will help to provide a safe foundation for the further development of the industry."
Furthermore, the group plans to release a state-by-state report on the benefits of shale development in November; the importance of which could be underscored through the example of New York state.
Via Fuel Fix:
With unconventional drilling, the supply chains are long — and the ones serving the U.S. industry mostly are domestic — so investments in nconventional plays can ripple throughout the U.S. economy, even in areas without rigs and oil field workers.
For instance, New York’s financial community stands to benefit from the investments in this arena, even though a moratorium bars hydraulic fracturing and natural gas drilling in the state.
State governments and federal coffers also can expect to benefit from the activity.
Economic benefits at both the state and federal levels make such unconventional drilling techniques a desirous prospect moving forward, as the United States tries to pull itself out of the last four years of economic stagnation.
Yergin summarizes, "The rapid growth of oil and natural gas production represents a major opportunity for the U.S."
He adds, "Without these energy resources, the disappointing economic picture would look worse, and so would the jobs numbers."
Hopefully the next administration will recognize that maybe - just maybe - we can drill ourselves out of this.