In 2003, I wrote an article for the Oil & Gas Journal essentially arguing that growing supply shortages of natural gas were becoming acute – notably in the Northeastern US – and that imported natural gas in the form of liquefied natural gas (LNG) was critical. Just a handful of years later – as a result of the shale revolution – Anadarko estimated that the Marcellus Shale region of the United States alone held more than a quadrillion cubic feet of recoverable natural gas – enough to supply the entire country’s natural gas demand for 100 years.
Having spent the first several years of my legal career working on projects aimed at supplying natural gas to the Northeast, I couldn’t help but observe the irony that the very region that needed gas the most was literally sitting on top of a Super Major gas field. Today, we know we have stores of natural gas for many decades, but are we building the infrastructure to harness its full benefits across the Northeast and America as a whole? And have we fully taken advantage of the shale revolution’s power to boost our economy? These are the questions we need to ask in 2016 and beyond.
A vast amount of our infrastructure in America, including roads, bridges, pipelines, airports, ports, is in dire need of an upgrade. As the country risks crumbling from within, we are failing to acknowledge the fact that we have been once again blessed with an abundance of energy resources – an over-abundance – the use of which could dramatically ease the redevelopment and modernization of our American infrastructure and put millions of people to work. American success and innovation has been bolstered throughout our history through our ability to make use of our abundant natural resources. One super major field after another has been discovered in the last decade – all brought about by our ability to tap into shale rock reserves.
In 2013, IHS reported that shale oil and gas were responsible for $238 billion in economic activity, In 2012 alone, they generated 1.7mm jobs and $62 billion in taxes. But the boost to our economy can also be seen in other industries. With cheaper energy and chemicals, companies saved millions of dollars, which they often re-invested into their businesses, creating jobs and becoming more competitive. In several gas-hungry industries, cheaper energy fueled billions of dollars in new investments, over one million new jobs were created, and billions of dollars were paid in new taxes.
Today, IHS estimates that the infrastructure needed in the energy sector up until 2025 could drive $1.15 trillion dollars in private capital investment, support over 1.1 million jobs every year, and increase the U.S. GDP by $120 billion. Investment in infrastructure will not only drive energy production and economic growth, it will also benefit consumers and help reduce carbon emissions.
The key to these developments is largely natural gas, and natural gas pipeline expansion seems to hold the greatest benefits for the economy, U.S. consumers, and manufacturers alike. In 2015, shale gas production and cheaper natural gas prices resulted in contributions of $190 billion to America’s GDP and created 1.4 million jobs, according to an IHS report. Shale gas also generated $156 billion in disposable income, which translates into $1,337 savings for American households.
Access to cheap natural gas is expected to cause energy intensive industries, including chemicals, refining, and metals, to outperform the U.S. economy through 2025. And American industries will keep getting more competitive, due to lowered energy costs. In short, America could be on the brink of an unparalleled economic boom, and we have to step up on building the infrastructure that can make it a reality.
In this election year, we are at a critical point. According to a report by Wood Mackenzie, Pro-energy policies would support 2.3 million jobs and increase the U.S. GDP by $443 billion through 2035, reducing household energy costs by $360 per year, and generating a cumulative 2016-2035 government revenue of $1.08 trillion.
When I wrote my article in 2003, we were in dire need of natural gas. Today, it is time to prove that the super abundance of natural gas we have been favored with is not too much for us to handle, that we can build those bridges, extend those pipelines, attract foreign gas-hungry industries into U.S. soil, build the new roads, put those energy savings back into the pockets of American families, and allow the economic boom to flourish from the depths of America’s massive shale oil and gas reservoirs. And the decisions we make, as a country, in the next few years will shape America’s future.