This is the final installment of the report on Hydrofracking from it's discovery and to how it has developed to be one of the most beneficial discoveries for our country in memory. The development and the wide spread implementation of fracking has and will be a turning point in world for fossil energy which has the potential, in turn, how people everywhere will have the potential to change how they live and prosper.
To deny this new source of discovery and extraction of fossil energy is to deny individual freedom and the right to ones choice for prosperity or poverty. The agenda of the progressive socialists that are now energized to stop fracking with false claims of environmental destruction are the same ones they used against nuclear and coal power energy generation. 'Stop now or we will all die'.
The historical scientific facts, not the consensus of politicians and the media, surrounding these energy resources proved their impact on the environment has been minimal, if not nonexistent. Yet, the forces of control want to stop this new discovery that will bring untold prosperity to the nation and the world, but it's not stopped, it will diminish the ability of those forces, progressive socialists, to control human behavior and outcomes to meet the demands of their agenda which is forced world wide socialism.
The Economic Impact of Hydrofracking On
The US and the World
by Darrell Mattheis
It would be hard to overestimate the
economic, impact of hydraulic
fracturing technology on the US economy.
US crude oil output grew by the largest
margin in U.S. history in 2012, the
latest sign of how the US energy boom is remaking the global oil market.
Use of the word REVOLUTION would not be
out of place! The shale gas boom has
reduced the cost of natural gas per million cubic Feet (MCF) by more than 60%
over the last five years.
On October 3, 2013 the "Wall Street
Journal" reported that the US is
poised to overtake Russia as the worlds largest oil and gas producer.
US imports of natural gas and crude oil
have fallen 32% and 15% respectively
in the last five years, reducing the US trade deficit.
Nations that rely on selling petroleum
for their economic strength have seen
their market power erode. More than 40%
of Russia's budget comes from oil and gas related duties and taxes.
It has been predicted that Russian oil exports
could fall by 25% to 30% after 2015, reducing gross domestic product by
more than $100 billion.
However, Russia is believed to have one
of the world's largest untapped oil bearing shale formations, which means that once Russia catches-up with hydraulic
fracturing technology, it has the potential to regain its place as the world's
largest producer and exporter of petroleum products.
Giant energy companies are proposing
half a trillion dollars in projects
to export North American natural gas, which has led to a movement in the US
to strictly limit exports of US natural gas.
Gazprom, the company at the heart of
Russian Prime Minister Putin's energy politics is finding that cheap natural
gas in the US, (along with the EPA's
elimination of new coal burning generating plants) has lowered the price of
coal exports, and now European countries, once under the thumb of Russia and
Gazprom, are buying cheap US coal, and purchasing less (expensive and
unreliable) Russian natural gas.
The amount of crude produced from two of
the hottest energy plays in the U.S.,
the Bakken oil field in North Dakota and the Eagle Ford shale formation in
Texas, continues to rise rapidly, along with estimates of total reserves in
those two fields.
The EIA (US Energy Information Agency)
predicts that the U.S. will overtake Saudi Arabia and Russia to become the
world's largest global oil producer by 2017.
The International Energy Agency (IEA)
predicts the U.S. will be essentially energy independent by 2030. The
U.S., which currently imports about 20% of its total energy needs will become
all but self-sufficient in net terms.
Oil imports into the U.S. will plunge from 10 million barrels a day to 4
million barrels a day in ten years.
The biggest losers? The green movement! The hydrofracking revolution is creating high paying
jobs for Americans and reducing our reliance on unfriendly and unreliable
sources of oil from nations like Venezuela and Nigeria.
As more U.S. states benefit from the
energy boom, and more investment goes
to industries that depend on reliable domestic sources, energy friendly
policies will have more political friends in the American political system.
Higher domestic production is creating
substantial tax revenues for local, state and federal levels of government. Politicians
are going to have a vested interest in keeping that money coming in, just as
interest groups that benefit from government spending will not want
environmentalists messing with their revenue source.
The IEA predicts that the U.S. will become
a net oil exporter by about 2035. But that does not mean that oil will be
cheap!
European Industry Flocks To Cheap U.S.
Gas
A
widening chasm between energy prices in the U.S. and Europe has European
industry scrambling to make emigration plans.
U.S. natural gas prices have fallen to a
quarter of those in Europe, a gap
that has swiftly widened in the past three years as the shale gas revolution
has accelerated.
Energy intensive industries such as
steel and chemicals are particularly
affected because they use natural gas both as a raw material and a power
source.
Many analysts say that these industries
are simply the vanguard of a broader shift because the shale boom has given an advantage to all U.S. based
manufacturing through lower gas and electricity prices.
As billions of dollars pour into the
U.S., the outflow from Europe is
costing jobs and weighing on decisions about ambitious and expensive
green-friendly policies
Gas prices in Asia are even higher than
in Europe, further channeling investment to the U.S. The differentials in the costs are just so big that
it's driving new investment to the US.
Top BASF officials warn that if Europe continues
with its current environmental and
energy policies, a chain reaction will eventually send more and more production
to America. As one company after another
moves, their suppliers will also be forced to relocate.
A growing number of European
manufacturers have announced plans to
invest in the USA. Austrian steelmaker
Voestalpine, last month announced that it would build an iron-ore processing
plant in Texas to take advantage of low energy prices.
The plant will cost $715 million and
create 150 full-time jobs. The company aims to almost double its total
turnover by 2020, largely through U.S. expansion and it has mostly abandoned
making any major new investments in Europe.
Royal Dutch Shell announced plans to
build a multibillion dollar petrochemical plant in Pennsylvania that will employ several hundred full-time workers as
well as up to 10,000 people during construction.
Shale Gas & Oil Production Is Driving
A Manufacturing Renaissance
A report released September 4, 2013 by
IHS, an international energy consultancy, titled America's New Energy Future: The Unconventional Oil and Gas Revolution
and the U.S. Economy predicts that American manufacturers best days are
ahead, and that the shale revolution
could spur economic growth and job creation for years to come.
Highlights of the IHS report include:
The combined upstream, midstream and
downstream unconventional oil and gas production process, and the chemical industry benefiting from it, will
support more than 467,000 combined
manufacturing jobs by 2020 rising to nearly 515,000 by 2025.
Unconventional oil and gas activity
supports more than 2.1 million total
jobs. by 2025 this number will reach nearly 3.9 million
Unconventional oil and gas activity
increased disposable income by an
average of $1,200 per U.S. household in 2012.
This figure is expected to grow to just more than $2,000 by 2015 and reach
more than $3,500 by 2025.
The unconventional oil and gas value
chain added $284 billion, in
contributions to the GDP in 2012. This
number is expected to increase to $468 billion by 2020 and $533 billion by
2025.
The Trade Deficit is dropping. Driven by
a rise in domestic production and manufacturing, imports are being displaced, creatlng a favorable export position for these
industries. The trade deficit will be reduced by more than $164 billion by
2020
Fracking and the Poor
One of the biggest benefits from
fracking and other innovative drilling
technologies is the windfall to American consumers, particularly the poor.
A new study by the Colorado-based energy
broker, Mercator Energy quantifies
the multibillion annual savings to American households through lower utility
bills from the fall in the price of natural gas.
From 2003-2008 the price of natural gas
averaged about $7.20 per million
BTU. By 2012, the increase in natural
gas production had brought the price down to $2.80 per million BTU.
The Mercator study found that the income
group helped most by this drop in the
price of energy is the poor, because energy is a bigger component of their
budgets.
Poor households spend four times more of
their income on home energy (10.4%) than do non poor households, (2.6%)
Federal Low Income Home Energy
Assistance Program (LIHEAP). gives
energy assistance to roughly 40 million American households, (36%) At the same time, unconventional drilling
technologies have shaved about$10 billion from the utility bills of poor
families/
To put it another way fracking is a more
effective anti-poverty program than LIHEAP. In 2012 LIHEAP provided about
$3.5 billion to nine million low-income households, but fracking saved poor
households almost three times more! Low
gas prices benefit nearly all poor households, while LIHEAP benefits fewer than
one in four.
Conclusions
The
spread and application of the technologies associated with unconventional oil
and natural gas production have had an astoundingly positive impact on the
economy of the US.
Ten years ago natural gas was expensive,
in short supply, and U.S. production
in decline.
Today, the price of natural
gas has dropped 60% and it is a glut on the market.
Ten years ago companies in the US were
investing in natural gas import terminals. Today those terminals are being
reconfigured into export terminals.
Ten years ago the U.S. worried about
interruptions in our supply of oil and gas from unstable middle-East countries. Today the IEA has declared that
U.S. has become the world's largest producer of petroleum products.
Ten years ago manufacturing industries
in the U.S. were re-locating overseas because of better opportunities. Today
industries from Europe and Asia are re-locating to the US to take advantage of
significantly lower energy prices.
Ten years ago jobs in manufacturing were
being lost at an alarming rate. Today unconventional oil and gas technology
supports 2.1 million total jobs, and by 2020 will support more than 460,000
combined manufacturing jobs
Ten years ago, US average household
income was declining. Today, unconventional oil and gas activity
has increased disposable income by an average of $1,200 per household.
Adding icing to the economic cake, this tremendous economic turn-around has been
achieved with virtually no assistance from the federal government.
And, in spite of, vociferous, opposition
from environmentalists, the economic
miracle that is unconventional oil and gas production, has been achieved with
no essentially no negative impacts on the environment.
Unfortunately,
the continuation of this economic miracle is not a foregone conclusion. Overreach
by state and federal lawmakers and regulators could slow, and in worst case,
stop it!
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