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Study: ‘One of the Most Significant Energy Events in the Last 100 Years’

Study: ‘One of the Most Significant Energy Events in the Last 100 Years’ thumbnail

Additional insight on the new IHS Global unconventional oil and natural gas study that projects more than $5.1 trillion in industry cumulative capital spending by 2035, supporting 3.5 million jobs. Here’s John Larson, IHS vice president for public sector consulting, during a conference call with reporters:

“This really is … a game changer in energy production for the United States. It’s a really rapid rise and a dramatic shift. You don’t often get to see the words ‘game-changer,’ or ‘sea change’ used around these types of events, but this is one of them. We think it’s one of the most significant energy events in the last 100 years.”

Here’s what an energy “sea change” looks like:

  • U.S. domestic oil production, which had been in decline between 1970 and 2008, is increasing – thanks in large part to unconventional production. Tight oil developed through hydraulic fracturing will total 2 million barrels per day (mbd) this year and is expected to reach 4.4 mbd by the end of the decade, Larson says.
  • Natural gas from shale was about 2 percent of total U.S. gas production in 2000. This year it will be 37 percent, Larson says. By 2020 unconventional natural gas will account for 75 percent of overall U.S. gas production, and by 2035 that figure will be 80 to 85 percent, he says.
  • Natural gas liquids (NGLs) from unconventional development, an important feedstock that is helping revive the U.S. manufacturing sector, have increased 30 percent from 2008 to 2012. Larson says unconventional NGLs will double again by 2020 to about 3.8 mbd.

This growth in developing unconventional resources will necessitate major capital spending by energy companies and will be accompanied by dynamic job creation and increased tax revenues for all levels of government over roughly the next two decades, IHS projects. Larson:

“(Unconventional production) is going to be fueled by capital expenditures. You’ll see massive outlays to help drive that growth. … You can see this continued expansion. This is not just a near-term boom. This is a long-term boom. That capital expenditure is going to be taking place through the full forecast horizon in 2035. That’s key to driving the job growth.”

IHS estimates unconventional oil and natural gas activity will support 1.7 million jobs this year, growing to 2.5 million in 2015, 3 million in 2020 and 3.5 million in 2035. The totals include direct jobs (people working for energy companies), indirect jobs (people working for industry’s supply chain) and induced jobs – jobs supported by the economic activity of industry workers. Larson:

“These jobs are very high-value jobs. They reach a broad base of employees, and the income earned by these jobs is significantly greater than the average income opportunity out there.”

Certainly, the IHS study depicts a vigorous industry that can play a major role in leading economic renewal. IHS Vice Chairman Daniel Yergin:

“The growth of unconventional oil and gas production is creating a new energy reality for the United States. That growth has not only contributed to U.S. energy security but is a significant source of new jobs and economic activity at a time when the economy is a top priority.”

API President and CEO Jack Gerard:

“The study highlights the extraordinary opportunities we have right here at home to develop our unconventional oil and gas resources and return our economy to a pro-growth engine. Polls show Americans’ top priority is job creation, and the oil and natural gas industry will be a driver for those new jobs, with nearly three quarters of a million new jobs added over just the next three years.”

 

energytomorrow.org



18 Comments on "Study: ‘One of the Most Significant Energy Events in the Last 100 Years’"

  1. SOS on Wed, 24th Oct 2012 6:00 pm 

    Its now coming to light. What has been known by many is now being spread to all. Hopefully we will not squander this new wealth but will invest it wisely. Pay down debt, fund SS, balance the budget without additional spending outlays. Then we can rearrange our present spending into a plan with more return for all Americans.

  2. Newfie on Wed, 24th Oct 2012 6:33 pm 

    You don’t often get to see the words ‘game-changer.

    Ha ha ha! It is used every other day in the main stream media. It is the most meaningless and shop worn phrase in the English language and should be banned.

    What goes up must come down. Tight oil is every bit as non-renewable as conventional oil which has already peaked. Tight oil will also peak and probably fairly soon because individual tight oil wells peak very quickly, in a matter of years, and quickly become stripper wells.

    Never ending economic growth is a Ponzi scheme and is doomed to fail on a finite planet with finite resources.

  3. SOS on Wed, 24th Oct 2012 7:16 pm 

    When you say never ending growth you are projecting into the future. We all know nothing lasts forever and economic growth is doomed to die even if it takes until the sun burns out.

    It probably will take until the sun burns out too, because nothing projected into the future forever will go out to infinity.

    The problem of course is how will things change and how long can things last. The answer: it doesnt make any difference. We dont eat the same foods, wear the same clothes or even get around the way we did 25, 50 or 1,000 yrs ago and we wont into the future.

    The answer lies in the management of the four factors of production: land, labor, capital and management. We all do this individually with our own resources, our communities do it collectively. Business do it.

    Managing these four factors feeds and clothes us all. The four factors will always be there but what makes up each of them may change. Energy is a component. Once it was wild fire, then controlled fire, then coal, oil, gas etc. What will it be tomorrow? I dont know either, but it will be the next best thing. You can bet on that.

  4. Rick on Wed, 24th Oct 2012 9:20 pm 

    Another BS article. And guess who is part of this group? — IHS Vice Chairman Daniel Yergin — If you believe anything this man has to say, you’re a fool.

    And btw, unconventional production is the direct result of conventional Peak Oil. Also the bpd rate from these unconventional resources, don’t amount to much. It won’t keep those fools who drive SUVs on the road much longer.

  5. GregT on Wed, 24th Oct 2012 9:33 pm 

    What a load of compete and utter nonsense.

  6. DC on Wed, 24th Oct 2012 10:28 pm 

    Amerikans…..

    You know, Alaska provided a short bump in US extraction too, when it was new. Helped extend things a bit, delayed the peak some and so on. But once Alaska hit its permanent decline, things went right on back to ‘normal’. That is to say, US production decline kept well….declining. Alaska merely delayed that for a decade or so. And even WITH Alaska in its prime, US imports kept rising.

    So it will be with tar-sands, shale and frak-gas. Like Alaska, it too may provide some temporary ‘relief’, but no more. Except this time around, the net energy sucks and the extraction costs of all this not-oil may be too much even for the SUV luvin merikans to bear.

    Game-changer? Nothing has changed. This is all about maintaining the greasy status-quo. That is not ‘game-changing’. The only thing thats changed is how destructive(and expensive) it all is. The oil cartel cant even extract ‘regular’ oil w/o making an utter mess of things, let alone this stuff.

  7. Newfie on Wed, 24th Oct 2012 10:39 pm 

    SOS, economic theory is a complete crock. The so called four factors of production – land, labor, capital and management – leave out a factor. The only factor that matters: natural resources. You can’t make anything without natural resources. And some natural resources which are critical to production are not renewable – minerals, oil, gas, coal. When these begin to get scarce, their price will rise and the economy will crash and burn. There are no substitutes at any price for critical resources. The current theory of economics assume that natural resources are infinite. Well guess what ? That is wrong. And so economics is wrong. The future will be like the past – the distant past. The Olduvai Theory will supersede economics theory.

  8. Harquebus on Thu, 25th Oct 2012 12:10 am 

    This article is complete rubbish. EROEI mates, EROEI.

  9. BillT on Thu, 25th Oct 2012 1:01 am 

    People like SOS deny reality. They are so locked up in the ‘get rich quick’ Capitalist dream that they cannot see the 2×4 coming at their face. He is so determined to convince people that he is right and natural laws don’t work in his world that he actually believes what he is saying. Too bad.

    EROEI, as Harquebus says. EROEI, not money, determines what happens in the carbon business.

  10. Ham on Thu, 25th Oct 2012 6:55 am 

    SOS seems to live in a simplistic la la land of production without consequences.
    The question that is not being asked here is; what sort of Planet are we going to leave behind with this activity? Are we going to continue to heat up the atmosphere? Create tailings ponds that birds cannot fly over? Chemicals injected into the mantle? Rusting nodding donkeys?
    It is projected by many organisational bodies that fresh water will become scarce very soon: and people think we can continue in such a vein?
    Good luck. We going to effing need it.

  11. Laromi on Thu, 25th Oct 2012 10:00 am 

    John Larson “This really is … a game changer in energy production for the United States. It’s a really rapid rise and a dramatic shift.” Yes, a dramatic shift in environmental pollution and rise in adverse EROEI metrics. This is end game stuff.

  12. SOS on Thu, 25th Oct 2012 11:19 am 

    Natural resources are “land” because that is where they are derived. Natural resources are inputs that need to be managed in conjunction with the other 3 factors. What components are being used in each of the four factors does change overtime but the factors are the underlying guiding principals

  13. SOS on Thu, 25th Oct 2012 11:22 am 

    The politics of scarcity. Ah yes! LOL. There is no scarcity. Only substitution and change. Have you looked at the world lately? Water is everywhere. It’s almost all water.

  14. SOS on Thu, 25th Oct 2012 11:30 am 

    Peak oil in Alaska was a direct result of peak politics that really gained “steam” in the 1970s under jimmy crater, our second worst president in my lifetime. There are generational supplies of oil waiting to be developed. The politics is changing. North America needs the wealth this vast untapped resource will give the human race.

    It was the politics of shortage that created the middle east we know today. Forcing America to import energy rather than produce it ourselves also forced us to protect those assets. The result: death and destruction an unintended consequence of short sighted liberal politics.

  15. SOS on Thu, 25th Oct 2012 11:34 am 

    Responsible, orderly development Is the key to a liveable planet.

  16. BillT on Thu, 25th Oct 2012 11:50 am 

    SOS, you are an …. Just look at what you rant. Four factors? What four factors? Profit. Profit. Profit. Profit.

    Water everywhere? Ah yes, that one is easy. Try drinking that ‘water everywhere’ and see how long you live. Especially the water over the fraking wells if that’s where you live. Or maybe you are talking about sea water. Good luck on that one. Desalinization is energy intensive and expensive. Ask the Saudis. Do you like a good steak? Would you pay $5,000. for one? That is what it would cost if you had to use desalinated water to grow that steer.

    You would rape the earth for it’s last drop of oil if it made you wealthier. You don’t care about kids or future generations and are probably a dried up old fart who hates humanity but loves money.

    Either way, all you will get on this site is people making fun of you and your greed. Give it up. ^_^

  17. Bill D Chiropolous on Thu, 25th Oct 2012 3:34 pm 

    SOS is right. But if you try to teach a pig to sing, you waste your time and annoy the pig. There is no shortage of pigs.

  18. Bor on Thu, 25th Oct 2012 3:46 pm 

    I’m afraid that the majority of people out there just like SOS. They’ll never understand/accept the tragic simplicity of reality. They are delusional to the bone. Some of them are just illiterate and some of them just cannot accept the grim reality. The physical resources are to be depleted very soon. Such things like money, profit, management, and politics will mean nothing.

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