One billion dollars every single day.Posted on 06/13/2014 9:30:58 AM PDT by ckilmer
One billion dollars every single day.
That is the rough measure of the benefit the U.S. economy is estimated to receive by the end of this year thanks to the development of new supplies of oil and natural gas, according to a new analysis.
USA Today reported recently about a Merrill Lynch study that seeks to quantify just how much the new supplies of natural gas and oil from unconventional sources like shale – not to mention offshore production in the Gulf of Mexico – are adding to U.S. economic output.
The story notes that Merrill Lynch claims raw gains from domestic energy supplies were $900 million per day in April – a 1,300 percent increase from $70 million per day in January 2010. By the end of 2012, Merrill Lynch expects the daily gains from domestic supplies to be over $1 billion.
Unfortunately the report is not online, which is too bad because the authors provide valuable detail about what they see as the great economic contribution of the current energy revolution. They peg that contribution at 2.2 percent of U.S. gross domestic product – an astounding figure in a $15 trillion economy.
Opportunity for a new industrial revolution
Another way to look at how new production of oil and gas from unconventional sources like shale is transforming our economy comes from Clay Jenkinson, a scholar at Dickinson State University in North Dakota.
In a series of columns for the Bismarck Tribune, Jenkinson describes a tour of the Bakken oil fields he took to see how the latest drilling technology works and what it all means for his home state.
After noting that it wasn’t all that long ago in human history that mankind had mastered fire, he marvels:
Today, a guy with a joystick can direct steel well pipe 12,000 feet into the earth, and then TURN a 90 degree corner (with stiff steel pipe), so that, with the same joystick, he can feel his way to a 3-15 foot vein of oil bearing shale thousands of feet away from the turn. Think about this for a moment. We can send down a straw more than two miles into the earth, through some very dense and unyielding formations, and then turn a corner and wander laterally until we reach an exceedingly narrow formation that the entire population of North Dakota could never reach with shovels if they did nothing else for the rest of their lives.
Given that this technology is just beginning to unlock the state’s vast resources – perhaps 12-20 billion barrels (or 60 years’ worth) of recoverable oil in western North Dakota – Jenkinson dismisses the idea of a regional “oil boom.” That term is inadequate. “It’s an industrial revolution.”
The series explores why Jenkinson thinks Bakken oil could be “one of the greatest gifts that ever came to the people of North Dakota”—but only if managed properly in a way that protects the environment and respects the sentiments of residents. Done correctly, he posits, North Dakota can become “a model of enlightened twenty-first century development.”
It’s an engrossing and worthwhile series that ably treats the entire range of environmental, economic, and cultural issues surrounding domestic energy production in 21st century America.
according to the article 1 billion dollars a day is added to the economy by the fracking boom. This has been my rough estimate for awhile now. ((I’ve figured the fracking boom was adding roughly 400 billion to the economy.
However, note the date on the article its August 17, 2012.
Almost two years has gone by since this article was written.
So fracking is adding considerably more to the economy by now.
The USA is entering an exceedingly sweet spot.
Normally higher oil prices would throttle the US economy. This time however, higher oil prices will benefit one part of the US economy while hurting another part of the USA economy.
Well if oil prices go too high they will kill demand for oil. Its hard to know where that price point is.
As long as the access exists, on private lands, the high prices will continue to drive investment into producing more oil, helping tamp growth in oil prices.
Politics alone, without other influences, could stop it such as an EPA ban of hydraulic fracturing.
That’s great.
How many billions are exiting the US economy every single day?
B0 DunhamSoetoroSoebarkah will claim all the credit, while doing everything to obstruct production.
In a similar way Slick Clinton claimed credit for an economy that had already recovered before he got elected, and went bust before he left office.
Oh yeah, BJ and Algore invented the internet.
The general public will believe the biggest whoppers.
Drill for all of it, and export all of it. Americans can’t afford it, so why sell it here. The only reason for this boom is the high futures prices for crude. Oil sands and fracking are a money loser at less than a hundred dollars a barrel. In the mean time, we’re sitting on a shitload of coal that can be mined and converted into fuel and valuable industrial products, worth far more than any oil and natural gas reserves, and our illustrious government at the behest of their crony masters, has cut the coal industry off at the knees. Anybody who’s stayed awake in chemistry class knows what products you can get from coal. It’s one of the largest untapped reserves of energy that we have at our disposal. Another is the methane hydrates in the
waters off of our coasts, literally natural gas trapped in ice, ripe for the picking for those who develop the means to harvest it.
agree. that’s the shame of it.
what’s happening is that the USA is shipping immense amounts of coal overseas.
I sure am glad that the coal being burned in other countries doesn’t cause Global Warming like it would do if we burned it here. :=) That is how it works, right?
agree.
With the Middle East returning to chaos, the frackers should get a hug from every American.
Spoken like a true Battlestar Galactica fan. :=)
the biggest wild card of all is controlled by the govt, and that is the usage of natural gas.
Oil is a worldwide commodity but gas is basically a domestic one.
If the govt did some very simple things, such as stopping the idiotic subsidy of “green” projects, gas would become the fuel of choice in big measure and gradually be the substitute for many of the uses of oil.
Cutting off a windmill subsidy would immediately cause the backup generators(which run on natural gas normally and are there cause the wind does not always blow) to be used and gas usage to soar.
Gas is what America is abundant in, not oil as the writers claim. we have much more gas and it remains cheap. Why? there is too much of it which can be readily accessed.
Return gas to $5-6/m and you will see a renaissance of low oil prices.
For the greenie meanie commie envirus weenies it works that way... not here, it will cause global warming, but places like china where there is no emission standards... yup, it does not cause global warming.
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