Oil, gas development boosts economy

The American Petroleum Institute (API) recently became the latest industry organization to trumpet the expansion of oil and gas development in the name of economic recovery and job creation.

API delivered comments on recent reports by the Energy Information Administration (EIA), the International Energy Agency, the Department of Energy and IHS in a conference call.

“More jobs are being created, imports are down, and more revenue is being sent to government,” said Rayola Dougher, API senior economist. “Continuation of this trend is vital to America’s economic recovery and long-term prosperity. Recent energy projections and economic analysis suggest it can continue. They also suggest the U.S can become far more energy self-sufficient. However, the right government policies will be important to facilitating this.”

In North Dakota alone, she said, echoing a report by IHS Global Insight, there will be a $1.6 billion surplus in oil revenues, in addition to $1 billion in other oil-related revenues. On a national level, development of shale resources has already generated almost $62 billion in federal, state and local tax receipts. According to the Department of the Interior, the federal government has collected more than $12 billion in 2012 from energy development on public lands and waters.

“This does not count the huge income taxes the industry will also deliver to the government this year,” Dougher said.

API also pointed out the differing points of view on energy independence. According to the EIA, the U.S. could become the world’s largest oil producer in the second half of this decade and could be nearly selfsufficient in energy by 2035. Meanwhile, the EIA predicts imports shrinking to just 9% of total U.S. energy consumption in 2040. But API’s own analysis, which assumes a full program of domestic development, concludes that domestic oil and biofuels and Canadian imports could supply all of the nation’s liquid fuel needs within 12 years, Dougher said.

“Most important are the jobs and economic growth expanded new development could provide,” Dougher said. IHS says 1.7 million jobs have been created since 2008, and Citigroup says as many as 3.6 million new jobs could be created by 2020.

“The numbers indicate a strong future path for domestic oil and gas development that could continue to strengthen our nation’s energy security and position in the world while building our economy and putting Americans to work,” Dougher said.

Comments