Professor Mark J. Perry's Blog for Economics and Finance
Thursday, March 22, 2012
More on Domestic Energy Boom and New Industrial Revolution as N. America Becomes New Middle East
Larry Kudlow interviewed Ed Morse last night on The Kudlow Report, watch the segment above, where Citigroup's head of global commodities says the United States is on the verge of a new industrial revolution as the result of a domestic energy boom.
“There’s no doubt that we’re seeing an industrial revolution — a reindustrialization of the United States — taking place because of the shale revolution taking place lowest, because we have the lowest natural gas prices in the world,” Ed Morse told Larry Kudlow. “We will for one or two or three generations.”
In a WSJ editorial yesterday titled "Move Over OPEC, Here We Come," Ed Morse wrote that North America already has become the most important marginal source of oil and gas globally, and is quickly becoming the new Middle East for energy production:
"The United States has become the fastest-growing oil and gas producer in the world, and it is likely to remain so for the rest of this decade and into the 2020s. Add to this output the steadily growing Canadian production and a likely reversal of Mexico's recent production decline, and theoretically total oil production from the three countries could rise by 11.2 million barrels per day by 2020, or to 26.6 million barrels per day from around 15.4 million per day at the end of 2011.
On top of this, the U.S. and Canada could see natural gas output rise by 22 billion cubic feet per day by 2020, with 14 billion of it coming from the Lower 48 states, four billion from Alaska and four billion from Canada. That's an increase of one-third, catapulting this continent into the ranks of significant exporters of liquefied natural gas.
We estimate that as many as 3.6 million new jobs may be created on net by 2020. Some 600,000 jobs would be in the oil and gas extraction sector, another 1.1 million jobs in related industrial and manufacturing activity, and the remainder in ancillary job sectors. Overall, the national unemployment rate could decline by as much as 1.1 percentage points from what it otherwise would be in 2020."