NORTH DAKOTA – The revolution in oil and gas drilling technology resulting from hydraulic fracturing is benefiting not only the energy industry, but every American household.
Oil and natural gas production in the United States is surging thanks to fracking, a drilling technique that frees trapped hydrocarbons by injecting water, sand, and chemicals into shale rock.
In 2012, the energy boom supported 2.1 million jobs, added nearly $75 billion to federal and state revenues, contributed $283 billion to the GDP, and raised household income by more than $1,200, according to a report from CERA (Cambridge Energy Research Associates), a subsidiary of IHS (Information Handling Services).
The competitive advantage for American manufacturers due to lower fuel prices will boost industrial production by 3.5 percent by the end of the decade, disclosed the report cited by Bloomberg Businessweek.
“What really surprised me was how powerful an impact it is having to such a broad base of the economy,” said John Larson, vice president of economic and public sector consulting for IHS CERA and the lead author of the report.
The energy boom is expected to increase employment throughout the economy, Larson said. By 2020, jobs that can be attributed to higher oil and gas production will reach 3.3 million, the report stated.
Lower energy prices will result in a rise in disposable income, adding $2,700 per household in 2020 and over $3,500 in 2025.
But several factors could restrict oil and gas production in the future, Businessweek notes, including an extension of fracking bans such as the one in New York or stricter environmental regulations. Larson said those factors would result in a rapid decline in the economic benefits.