Petroleum production impacts economy

Published on Saturday, 12 April 2014 22:56 - Written by Alex Mills Texas Alliance of Energy Producers

The dramatic, almost unbelievable, increase in crude oil and natural gas production in the United States has many positive implications for the job creation, the economy in general and national security.

Petroleum economist Karr Ingham pointed out recently that employment in the oil and gas industry in Texas has doubled in the last 10 years from 134,500 in 2003 to 285,000 in 2013, an increase of 112 percent.

Ingham also said that the Texas Petro Index topped the 300 mark for the first time in February finishing at 300.6, which is a 7.6 percent increase above February 2013 of 279.3.

Ingham’s announcement came just after the Energy Information Administration (EIA) said that net oil imports to the U.S. could fall to zero by 2037 because of increased production of unconventional reserves of crude oil and natural gas.

The EIA said the goal of U.S. energy independence could be within reach in 23 years under a ‘high-production’ estimate contained in an update of its periodic energy forecast.

“This is the first time that a case in the Annual Energy Outlook has projected that net imports’ share of liquid fuels consumption could reach zero,” said the EIA.

Under EIA’s high-resource assessment, production increases to 13 million bpd over the next two decades, based on more favorable assumptions relating to technological advancements and well productivity.

Already net oil imports have fallen to about 5 million bpd from a peak of almost 13 million bpd in 2006. Production from tight oil formations has increased from less than 1 million bpd in 2010 to 3 million bpd in 2013, according to the EIA. The EIA also included a low-resource estimate where production rises to 9.1 million bpd in 2017 before falling to 6.6 million bpd in 2040.

Imported crude oil was used against America in the 1970s when the nation was literally being held hostage by nation’s who were not afraid to exploit our vulnerability and use the “oil weapon” to promote their agenda.

Now, the nation is exporting, not importing, LNG, and Congress is talking about changing the law to all crude oil export, which have been prohibited since the 1970s.

There is even good news on the environment front.

Total releases of toxic chemicals decreased 12 percent from 2011-2012, according to the U.S. Environmental Protection Agency’s (EPA) annual Toxics Release Inventory (TRI) report. The decrease includes an 8 percent decline in total toxic air releases, primarily due to reductions in hazardous air pollutant (HAP) emissions.

The 2012 data show that 3.63 billion pounds of toxic chemicals were either disposed or otherwise released into the environment through air, water, and land. There was also a decline in releases of HAPs such as hydrochloric acid and mercury, which continues a long-term trend. Between 2011 and 2012, toxic releases into surface water decreased 3 percent and toxic releases to land decreased 16 percent.

The primary reason for the decline is the increased use of natural gas as an electric generation fuel.

Natural gas-fired power plants accounted for just over 50 percent of new utility-scale generating capacity added in 2013, according to EIA.

These changes in our energy usage will have enormous positive implications for other industries, such as manufacturing, because oil and gas produced in the U.S. is a safe and dependable supply that provides jobs, pays taxes and enhances our national security.