Growth in unconventional oil and natural gas activity is transforming America’s energy future and strengthening its overall economy in terms of jobs, government revenues, and gross domestic product, according to a recent report from IHS. The report, entitled “America’s New Energy Future: The Unconventional Oil & Gas Revolution & the US Economy, Vol. 3,” extends on the initial analysis to include the full value-chain associated with the unconventional revolution: from drilling and refining to petrochemical supplies and manufacturing.
According to the report:
• The contribution to GDP from unconventional oil and gas and energy-related chemicals activity totaled nearly $284 billion in 2012, rising to $468 billion in 2020 and $533 billion by 2025.
• Unconventional energy increased US household disposable income by $1,200 in 2012, approaching $2,000 in 2015 and $3,500 in 2025, due to reduced costs of energy and other goods and services.
• Reduced energy imports and increased global competitiveness of US energy-intensive industries will contribute $180 billion to trade balance in 2022. This trade impact is particularly significant for the chemical manufacturing sector, reflecting the widening cost spread between gas-derived energy-related chemicals in the US and oil-derived energy-related chemicals in other parts of the world.
During 2012-25, IHS projects a total of more than $2.4 trillion will be invested in the upstream oil and gas activities. Midstream and downstream energy will generate about $216 billion and energy-related chemicals will add more than $129 billion.
Unconventional oil and gas activity and employment contributed a total of more than $74 billion in government revenues in 2012, climbing to $138 billion annually in 2025.
Key energy-intensive sectors, including energy-related chemicals, refining, aluminum, steel, glass, cement, and food, are expected to invest and increase their US operations in response to declining prices for their energy inputs.
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