Hydraulic fracturing generated $3.5 trillion in new wealth between 2012 and 2014 in spite of falling oil prices, according to a new study, but today’s rising prices could be even better for the U.S. economy. From 2012 to 2014, the shale oil industry generated 4.6 million new jobs due to an energy boom and the resulting low gas prices, according to a study published by the National Bureau of Economic Research (NBER).
“What’s often overlooked is the impact that the shale revolution has had throughout the economy,” Chris Warren, a spokesperson for the pro-industry Institute for Energy Research (IER), told The Daily Caller News Foundation. “Lower energy prices mean people have more money to save or spend on other day-to-day necessities. More energy production leads to job creation in other sectors of the economy, whether it’s manufacturing, healthcare, education, etc.” –Andrew Follett, The Daily Caller, 17 December 2016
If you listen closely, you can hear the cursing of OPEC’s (and Russia’s, for that matter) oil ministers bursting forth from their beleaguered petrostates as America’s oil producers add to their collective count of active rigs for the seventh straight week. We’re headed towards the worst-case scenario for the world’s petrostates, where they agree to cede market share to gain higher oil prices, only to see American companies jump on the opportunity and take that share of the market for themselves while simultaneously blunting the rebound. Hence the wailing and gnashing of teeth from all those oil ministers. —The American Interest, 18 December 2016
A two-year battle for global oil supremacy that pit Saudi Arabia, the de facto leader of OPEC, against upstart U.S. shale producers left them both badly wounded but with each side claiming victory. For U.S. shale companies, it was two years of shrinking profits and mass layoffs as dozens of producers scaled back output or sought bankruptcy protection. But the survivors became much more efficient and are now eager to grab market share at their foreign competitors’ expense. “Definitely, the U.S. is going to win the next two years because OPEC is cutting and U.S. shale is taking off,” said Scott Sheffield, chief executive of Pioneer Natural Resources Co., a U.S. producer that is already ramping up drilling in West Texas’ Permian Basin. –Benoit Faucon, Alison Sider and Georgi Kantchev, The Wall Street Journal, 15 December 2016
President-elect Donald Trump’s decision to nominate former Texas Governor Rick Perry to head the Department of Energy opens the door to U.S. energy independence in the near future — not to mention a growing economy, fueled by private-sector investment and high-paying jobs. The U.S. is now the largest producer of crude oil and natural gas in the world, but we still import about 25% of the crude we need. Opening up more federal lands and offshore production will allow us to fill that gap. Increased production will also allow the U.S. to export more crude oil and natural gas to our allies, many of whom rely on Russia for their energy needs. For example, the European Union depends on Russia for about a third of its energy and would love to have an affordable alternative. Moving the U.S. from oil importer to oil exporter will also dramatically reduce our trade deficit, another Trump goal. –Merrill Matthews, Investor’s Business Daily, 16 December 2016
The Social Cost of Carbon (SCC) is the single most important tool in evaluating the effectiveness of climate change mitigation policies, such as subsidies to renewables. However, the UK government has quietly ceased to use this measurement, almost certainly because after a decade of subsidy the policy cost per tonne saved is still greatly in excess of even higher estimates of SCC. The ‘solution’ is worse than the problem. The Trump administration is likely to focus on the Social Cost of Carbon in its reforms, probably introducing more reasonable and lower estimates, increasing pressure on the UK government amongst others to re-examine their climate policies. –John Constable, Global Warming Policy Forum, 17 December 2016
All energy subsidies should be ended. The shale revolution shows that businesses and markets can generate major innovations and progress with their own resources. Investors and major corporations have stepped up to the plate and pumped billions of dollars into alternative energy technologies. The U.S. energy sector is vast, dynamic, and entrepreneurial, and it does not need subsidies to thrive. –Chris Edwards, Downsizing the Federal Government, 15 December 2016