Study: All States Benefit From New Energy Sources
States that produce oil and gas and even those that don’t are reaping the benefits of the unconventional oil and gas revolution, according to a study sponsored by the U.S. Chamber of Commerce Institute for 21st Century Energy and conducted by the global research firm IHS-CERA.
“We’ve known for some time that shale energy is truly a game-changer for America—and now we can prove it,” says Karen Harbert, president and CEO of the Institute. “This new, in-depth study demonstrates that shale energy is already contributing nearly $238 billion to U.S. GDP, with much more to come if policymakers at all levels of government don’t stand in the way.”
The state-by-state study, America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy, details the economic contributions to individual states in terms of jobs and the tax revenues paid to federal, state, and local governments as a result of unconventional oil and gas activity. Unconventional sources of energy include fuels extracted from oil sands, shale gas formations, and deepwater drilling. The states study comes on the heels of a study on the national impact of unconventional energy activity.
Many of the state-level impacts are well known among the producing states, which include Texas, Oklahoma, Pennsylvania, North Dakota, and Ohio. Producing states were responsible for 1.2 million jobs in 2012, and the IHS CERA study projects that the top 10 producing states will add 893,000 more jobs between 2012 and 2020.
Not as well known are the economic benefits that accrue to states that lack oil and gas resources but, nonetheless, host the firms along the supply chain that provide heavy machinery, fabricated metals, construction materials, professional services, and other inputs required by an expanding industry on the production side. The report predicts that energy-related employment gains in nonproducing states will also be significant, reaching more than 816,000 in 2020.
In some states, the enhanced economic activity resulting from unconventional oil and gas development has helped ease significant budget constraints in recent years. Cumulative government revenues from unconventional oil and natural gas activity will exceed $2.5 trillion between 2012 and 2035. Nearly 75%, or $1.9 trillion, of oil and gas revenues will be generated in the top 10 producing states. The nonproducing states reaped $12 billion in 2012 tax revenues; this figure is projected to exceed $20 billion by 2020.
The full potential of domestic energy resources won’t be realized without sound policy and prudent development, warns Chamber President and CEO Tom Donohue. “The industry is working with state governments and the public to adopt best practices and strict environmental standards, and the states are effectively regulating energy development. But federal bureaucratic roadblocks, such as overregulation, endless environmental reviews, tax hikes, and permitting delays, could halt new development,” says Donohue.
Learn more, including state-by-state data, at the Institute’s Shale Works for Us website.