With the escalation of fracking over the last several years and the resulting increase in oil and natural gas production, the US energy industry has undergone a significant turnaround. Not only is the country producing more of its own energy and importing less from foreign oil giants, everyday consumers and job seekers are seeing their lives change as a direct result of the drilling – be it through a new job, a higher wage, or lower gas bills.
- There are nearly 40 known shale plays across the US, from coast to coast, which means that many of us are likely to see some activity ramping up:
- The Marcellus primarily underlying Pennsylvania could hold as much as 500 trillion cubic feet of natural gas – even if just 10% of this gas is recovered, it would still be enough to meet the entire country’s natural gas needs for two years.
- Early predictions estimate that the Utica – underneath the Marcellus – could contain as much as 55 billion barrels of oil and 16 trillion cubic feet of natural gas.
- A mid-2013 report estimated that 7.4 billion barrels of oil and 6.4 trillion cubic feet of natural gas could ultimately be recovered from North Dakota’s Bakken and Three Forks plays, as previously unrecoverable oil now has a good chance to make it to the surface thanks to advancing fracking technology.
- South Texas’ Eagle Ford shale oil is some of the most valuable crude in the world, characterized as “exceptionally light and sweet” and inexpensive to refine.
- The Monterey Shale spans 1,750 square miles from Los Angeles to San Francisco and promises as much as 15.4 billion barrels of oil, more than double the amount estimated in the Bakken and more than five times the amount in the Eagle Ford – which could amount to more than half of the undeveloped, technically recoverable shale oil resources of the continental US.
- The most abundant oil shale beds in the world lie in the Green River Formation along the border of Colorado, Wyoming, and Utah, with estimates that about 800 billion barrels could be extracted – three times as much as Saudi Arabia’s proven reserves and enough to satisfy current US demand for more than a century.
- By 2025, the unconventional oil and gas industry will support 3.9 million jobs across the nation on three fronts: direct (e.g., at oil exploration companies), indirect (e.g., in supply industries), and induced (e.g., in consumer goods and services like restaurants).
- Tens or even hundreds of thousands of new jobs have been added in shale-producing states – like Texas (where shale development has created 575,000 jobs to date); Pennsylvania (102,600 jobs); California (96,500 jobs); Louisiana (78,900 jobs); and Colorado (77,600 jobs).
- Even non-producing states are experiencing job and economic gains from shale development’s lengthy supply chain – like New York (44,400 related jobs), Illinois (38,600 jobs); Michigan (37,800 jobs); Missouri (37,700 jobs); and Florida (36,500 jobs).
- Of all new jobs created between 2005 and 2012 in Pennsylvania, 90% were created by the drilling industry – in 2009 alone, 44,000 new shale jobs added $4 billion to the state’s economy, and the Marcellus is expected to support more than 211,000 fracking jobs across the state by 2020.
- Chesapeake Energy Corp. began work on three new facilities in Ohio to support Utica shale drilling – a 85,000-square-foot office tower, a 55,000-square-foot receiving and maintenance shop, and a 6,000-square-foot repair shop – all being built by Ohio construction companies with local workers.
- Shale oil and gas development in the Eagle Ford area of South Texas has contributed to whirlwind construction job growth in the Coastal Bend region – far exceeding the employment gains in all other industries between 2001 and 2010 – and was supporting almost 100,000 jobs by the end of 2012.
- Between 2007 and 2012 North Dakota’s transportation and warehousing industry grew about 16% annually – with a 35% increase in 2012 alone.
- Because of shale development in the Baton Rouge, Louisiana, area, construction related to its extraction in 2014 will increase the demand for skilled laborers from 17,500 to 31,000, the biggest increase in 30 years.
- With fracking going on in Colorado’s Niobrara shale, the energy industry contributed $29.6 billion to the state’s economy in 2012 and supported more than 110,000 high-paying jobs – contributing to over $3.8 billion in employee income to state households in 2012.
- In Williston, North Dakota, construction activity and job openings are up in each of three private development sectors: commercial, single-family homes, apartments.
- Energy workers typically earn salaries 11%-15% higher than the national average, and those figures are not limited to upper-level white-collar positions but also prove true for skilled and semi-skilled blue collar workers – regardless of education level.
- Full-time workers in mining and oil & gas exploration saw an almost 6% salary growth in 2012, nearly double the 3.5% increase in national wages during the same period.
- The median salary in Pennsylvania’s core Marcellus industries exceeds $80,000, besting the statewide average by more than 40%.
- The median annual wage for all oil and gas workers hovered around $37,600 in 2010. Just one year later, average salaries in North Dakota’s Bakken formation were around $70,000 – and easily topped the $100,000-a-year mark with overtime.
- In West Virginia, the number of oil and gas extraction jobs grew by 9.5% from 2008 to 2011, while wages for those workers rose on average nearly $11,000 to exceed $71,700.
- The average oil and gas worker in Ohio makes $30,247 more than the statewide figure.
- Since the start of Eagle Ford development in South Texas in 2008, personal income has risen in all but one of the 23 area counties. The increase has topped 30% in three counties (Dimmit, La Salle, and McMullen); the remaining 19 saw improvements anywhere from 4.05% to 22.84%.
- In 2012, the average consumer found an extra $145 in his or her wallet because of lower home utility bills from abundant, affordable natural gas.
- Household disposable income from increased activity in the shale value chain should reach $2,000 by 2015 and more than $3,500 per year by 2025.
- Upwards of 95% of each individual windfall will go right back into the marketplace in the form of consumer spending, boosting overall economic growth.
- Through 2035, the energy industry will invest more than $5.1 trillion in energy development in the US, and the increased production of goods and services related to continued shale development could contribute as much as $475 billion to GDP.
- Tax revenue will also expand: By 2035, the cumulative tax contribution from the oil and gas revolution will surpass $2.5 trillion – about half of which will go to the federal government as a source for reducing the national debt.
- In early 2013, the ranks of millionaires increased by 21 over the course of a week in DeSoto Parish, just south of Shreveport, Louisiana – which just so happens to overlay part of the Haynesville formation that holds an estimated 3 million to 15 million cubic feet of natural gas.
- Ohio’s Carroll County – the sparsely populated drilling hub of the Utica Shale – boasts 88 recently minted millionaires, mainly dairy farmers.
- In Texas, it’s possible that more than $15 billion in oil royalty checks were paid to landowners in 2012 – which tops $40 million every day and $1 billion every month.
- Watford City, North Dakota’s First International Bank added 65 lenders, trust officers, and insurance agents at its 21 community branches during 2012, while neighboring competitor McKenzie County Bank responded to increased customer demand by hiring a commercial banker and a residential loan officer to its 17-person staff.
- The First National Bank in Hermitage, Pennsylvania, assembled a Shale Energy Team, “a selection of financial experts who remain current on issues related to the Marcellus and Utica Shale.”
- A Columbus, Ohio-based investment banking firm saw energy-related transactions grow from 10% of company revenue to more than 40% in five years.
- During the first three quarters of 2012, energy transactions accounted for more than 23% of all transactions in the US, and four of the 10 largest US deals involved oil and gas companies.
- According to Minneapolis Federal Reserve Bank data, deposits in banks with branches in the Bakken shale region were up 27% in 2011 and another 15% in 2012, reaching $3.9 billion.
- Microtel Inn & Suites has developed new properties in Fairmont, West Virginia; Steubenville, Ohio; Aztec, New Mexico; and Texas’s Permian basin – all ripe with shale drilling activity.
- Vantage Hospitality Group, parent company of Americas Best Value Inn, has recently added five new hotels near Texas shale deposits.
- In North Dakota, the number of hotel rooms increased from 15,207 in 2009 to 16,221 in 2011 – and more than 2,000 additional rooms were under construction since then.
- The Oklahoma hospitality industry has added 1,242 new rooms in recent years.
- Higher hotel occupancy rates provide an economic bonus through industry taxes funneled back into local communities – in Pennsylvania, law dictates hotel tax receipts be used to promote local tourism and build public venues.
- Hotel occupancy rates in Washington County, Pennsylvania, jumped from 50% to 70% between 2007 and 2013, and the 3% hotel occupancy tax that brought in $1.1 million in 2010 – double the collection in 2006 – is being used to defray improvement costs of the county fairgrounds, renovate the local minor-league baseball field, and to promote area tourist attractions.
- Fayette County, Pennsylvania, collected $858,147 in hospitality taxes in 2010 – 60% more than in 2008 – enabling the local visitors’ bureau to offer advertising and construction grants to nonprofits catering to tourists.
- Hotel tax revenues in Tioga County, Pennsylvania, jumped 38% in one year, reaching $365,000 in 2010 from $264,000 in 2009.
- In Bradford County, Pennsylvania, hotel tax revenue climbed 65% between 2009 and 2010, from $158,457 to $262,600.
- The Lawrence County, Pennsylvania, budget expected $60,000 in hotel tax revenues for 2012 – but the actual number came in at nearly double that, making it possible to reinstate funds for tourism promotion initially slashed by budget cuts.
- Gas is a clean-burning energy source that could serve as a bridge fuel between high-carbon coal and other future renewable energy sources, like cheap solar power.
- Natural gas has about half the carbon footprint of coal and is providing remarkable environmental benefits, contributing to helping reduce CO2 emissions and improving air quality in major cities that are relying more heavily on natural gas.
- While CO2 emissions rise elsewhere, the US is decreasing domestic CO2 emissions – now at their lowest level in more than two decades – because of the continuing natural gas boom from shale: Lured by record low prices, 150 coal-fired power plants have switched to natural gas in the last three years.