Fracking and Job Creation

One of the few booming sectors in the U.S. economy is oil and natural gas. Domestic development has been helped by high worldwide prices for crude, but the improvements in horizontal drilling and hydraulic fracturing—“fracking”—have also been very important. In a new report, researchers at the University of Texas at San Antonio (UTSA) estimate that the Eagle Ford shale alone generated $25 billion in economic activity in 2011 alone, in addition to creating over 47,000 jobs. These gains could be increased if federal policies opened up more of the country’s natural wealth to development—eventually adding $273 billion to annual GDP and 1.2 million jobs, according to a 2009 study.

An E&E article by Nathanial Gronewold summarizes the report’s findings:

Researchers at the University of Texas at San Antonio (UTSA)…estimate that the oil and gas industry in the Eagle Ford generated around $25 billion in economic activity for the region in 2011, leading to the addition of 47,097 full-time jobs that year.

Oil and gas exploration through horizontal drilling and hydraulic fracturing began there in 2008, when Petrohawk Energy Corp. is said to have first drilled into the formation. The zone’s close proximity to the well-established Texas oil and gas industry and related infrastructure has seen activity there spreading rapidly.

UTSA figures presented in the new study show that from 2010 to 2011, natural gas production has doubled, while crude oil production from the Eagle Ford zone has increased by a factor of six in one year. Natural gas liquids output is estimated to have tripled.

By 2021, the shale oil and gas field is seen as generating total economic activity of $90 billion and adding about 117,000 full-time jobs to the region. By then, total wage and salary benefits are seen as more than doubling, to $7.7 billion, while the state of Texas will enjoy an added $1.76 billion in tax revenue just from that one shale oil and gas play.

Unlike the dramatic increase in production on private and states lands in 2011, production on federal lands fell because the federal government is dragging its heels on allowing the development of domestic oil and gas resources, as the following chart clearly shows:


Americans are currently suffering from high unemployment, high gas prices, and a monstrous federal budget deficit. Unshackling entrepreneurs to develop oil and gas on federal lands would help on all three fronts.

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