"An energy boom is revving up the U.S. economy. The use of new drilling techniques to tap oil and gas in shale rocks far underground helped add about 158,500 new oil and gas jobs over the past five years, and economists think it has created even more jobs in companies supplying the energy industry and in the broader service industry. U.S. oil production is rising for the first time in decades. Natural gas has become so plentiful that prices recently plunged to a 10-year low.
The economic benefits of rising energy production are spreading far beyond the traditional oil patch, to Ohio and Pennsylvania, Nebraska and New York, North Carolina and Idaho."
Here are 11 examples from the article of how the energy boom is creating jobs and spreading prosperity throughout the U.S. economy:
1. Truck drivers from pretty much anywhere can find work related to the surging energy business.
2. Private-equity firms completed $24.8 billion of energy deals of all types last year, up from $8.5 billion in 2010.
3. The energy industry has discovered so much new natural gas, causing gas prices to drop 39% over the past year, that it is breathing new life into energy-intensive manufacturing such as steel and plastics. Manufacturing plants are returning to the U.S. to take advantage of cheap natural gas, spurring major investments in petrochemical and steel production in the Gulf Coast and Midwest. Examples of companies expanding production in the U.S. include Dow Chemical, Royal Dutch Shell (plastics), Nucor Steel and Maine Pulp and Paper.
4. Landowners in huge swaths of the country where shale is found are raking in money for leasing their mineral rights.
5. Consumers throughout the U.S. are paying lower bills for heating and electricity because of cheap natural gas.
6. For every new job working in the oil and gas sector, another four are supported by the energy supply chain and by workers spending more money on goods and services.
7. Beyond simply adding jobs, communities from Pennsylvania and Ohio to Colorado and Texas that are home to this energy boom are experiencing a new emotion: optimism.
8. The industry paid out $6 billion in royalties and lease payments from 2008 to 2010 just in Pennsylvania, home to much of the Marcellus Shale, a formation of gas-bearing rock.
9. Community Bank Systems Inc., which operates 170 bank branches in rural New York and Pennsylvania, says it has seen a 20% growth in deposits in regions where there is shale drilling, versus about 5% elsewhere.
10. Thousands of new jobs have been created in Midwest states from the “shale sand boom” that has been created by the increased demand from oil and gas companies for the sand that is one of the main inputs used in the fracking process to help extract oil and gas from shale rock.
11. Electric utility companies like Siemens AG in North Carolina have started investing in giant, gas-powered turbines to take advantage of historically low natural gas prices.
What makes this energy stimulus even more remarkable is that it came about in spite of, not because of, any intended government energy policies. As AEI environmental scholar Steve Hayward wrote back in April
, "One remarkable aspect of the shale gas revolution is that it was not the product of an energy policy edict from Washington, or the result of a bruising political battle to open up public lands and offshore waters for new exploration. Although the Halliburtons of the world are now big in the field, its pioneers were mostly smaller risk-taking entrepreneurs and technological innovators."
And Steve points out here
that U.S. energy policies have actually restricted access to America's vast energy resources, which means that the energy stimulus outlined above could be creating even more jobs and prosperity without those government restrictions.
HT: Dan Greller
, who comments that "Somewhere Julian Simon must be smiling."