By Guest Blogger,
posted on Monday, January 09, 2012.
The following is a re-posting of a blog written by Ken
Cohen, vice president of public and government affairs for Exxon
Mobil Corporation. The original post can be found on his
Perspectives blog (http://www.exxonmobilperspectives.com/)
here.
You can also follow Ken on Twitter @KenPCohen.
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- $76 billion share of U.S. GDP.
- $33 billion in capital investments made.
- $18.6 billion in federal, state and local government tax and
federal royalty revenues.
- 600,000 jobs supported.
And that was just in 2010.
These impressive stats sum up the economic contributions of U.S.
shale gas production in 2010, according to a recent study from
IHS Global
Insight.
But even better outcomes are yet to come, the study's findings
show.
The U.S. shale gas industry will continue to be a major
generator of jobs, government revenue and economic stimulus for
decades as production continues to increase. Researchers estimated
that nearly $2 trillion in capital investments
will flow into the U.S. shale gas industry between 2010 and
2035.
The benefits of such massive investment will spread throughout
communities, businesses, and governments around the country. The
study examined recent increases in shale gas production and modeled
the growth trend into the future, finding that shale gas will grow
from 27 percent of U.S. natural gas production in 2010 to 60
percent in 2035. As a result:
- The jobs supported by the shale gas industry are expected to
more than double by 2035, from 600,000 in 2010 to1.6
million by 2035.
- The annual government tax revenues will more than triple, from
$18.6 billion in 2010 to $57 billion in 2035.
- In total, the shale industry will generate more than
$933 billion in federal, state and local government tax
and federal royalty revenues over the next 25 years.
- The value added to the U.S. GDP will nearly triple, from more
than $76 billion in 2010 to $231 billion in
2035.
Those are a lot of large numbers that can be hard to fully
grasp. A few comparisons may help:
- The $2 trillion in shale gas capital expenditures to be
invested by 2035 is an amount that would reduce the
current U.S. national
debt by about 13 percent.
- The $933 billion in tax and royalty revenues from shale gas
activity expected over the next 25 years is an amount that would
come to close to paying for the 2011 Social Security and Medicaid
budgets combined.
- The $231 billion in value added to the U.S. GDP by the shale
gas industry in 2035 is an amount that's higher than the GDP of the
majority of the world's
countries in 2010, including Ireland, New Zealand and
Denmark, just to name a few.
The U.S. shale gas industry is already a sizable contributor to
the U.S. economy, and as these numbers show, the industry's
contributions will only continue to grow. But this growth is not
pre-determined - and, in fact, can be undermined if
counterproductive policies and regulations are enacted by
policymakers at the federal and state levels. Government policies
that promote access to U.S. energy supplies and increased
investment are necessary for the industry to continue its pattern
of growth - as are the industry's actions to maintain safe
operations throughout the country.
With a focus on effective policy and responsible operations, the
shale gas industry can play a major role in U.S. economic recovery
and growth.