Energy’s Unexpected Jobs Boom
From CNN Money
By Daniel Yergin
The rapid rise in shale gas and tight oil in the United States constitutes nothing less than a revolution in oil and natural gas. No longer can there be any doubt about the dramatic change in America’s energy position. U.S. oil production is up 50% since 2008, when we were supposedly slated to run out of oil. Natural gas production has increased by 33% since 2005, and shale gas alone now constitutes about 45% of total natural gas production.
This revolution is not just about energy production; it’s an economic story along several dimensions, whether measured in consumers’ pocketbooks, jobs, U.S. manufacturing output, or America’s increased competitiveness in the world economy. This has occurred amid a half-decade of deep recession and high unemployment. Indeed, without the boost from the unconventional oil and gas development, the U.S. economic picture would have looked even worse over the last few years.
According to a new study from my organization, IHS, entitled “America’s New Energy Future: the Unconventional Oil and Gas Revolution and the Economy — A Manufacturing Renaissance,” the unconventional energy boom increased average household disposable income in 2012 by $1,200 — a figure that is expected to grow to $2,700 by 2020. That boost is mainly the result of two factors. First, households are spending less of their total income on utilities, whether directly for less-expensive natural gas or by lowering the cost of electricity generated with natural gas. Secondly, lower energy costs have led to a reduction in the cost of goods and services within the broader economy.
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