Unconventional oil and gas activity in the US has created hundreds of thousands of jobs, indirectly and directly, as well as pumped substantial dollars in the coffers of communities across the nation. Now, a new study shows that such unconventional activity has caused the disposable income to rise by an average of US $1,200 per household in the US. The savings, according to IHS, came in the form of lower energy costs for consumers who received lower energy bills and lower costs for other goods and services. And even better, IHS predicts the figure could jump to more than $2,000 in 2015 and surpass $3,500 in 2025. “The unconventional oil and gas revolution is not only an energy story, it is also a very big economic story that flows throughout the US economy in a way that is only now becoming apparent,” Daniel Yergin, IHS vice chairman and author of The Quest: Energy, Security, and the Remaking of the Modern World, said in a news release about the study’s findings. “In addition to significant job and economic impacts from energy production and its extensive supply chains, the growth of long-term, low-cost energy supplies is benefiting households and helping to revitalize US manufacturing, creating a competitive advantage for US industry and for the US itself.” The US shale success story, which transformed the energy sector in terms of gas production and now oil production, also is expected to boost the country’s trade position while reducing the nation’s reliance on imports. “Driven by a rise in domestic production and manufacturing that will displace imports, as well as a favorable export position for these industries, the trade deficit will be reduced by more than $164 billion in 2020 – equivalent to one-third of the current US trade deficit,” IHS said in the release. The study also found what similar studies have proven when it comes to employment: Unconventional energy has created and maintained jobs. These jobs are not only in the upstream sector but also in the midstream and downstream sectors. Currently, unconventional activity in the midstream, downstream, and energy-related chemicals sectors support about 377,000 jobs, the study revealed. Add that to the upstream sector, and unconventional oil and gas supports more than 2.1 million jobs, according to the release about the study. But the good news doesn’t end there. The study predicts the number of jobs supported by the unconventional oil and gas value chain will jump to more than 3.3 million in 2020 and hit 3.9 million by 2025. “In addition to measuring jobs supported by the full unconventional value chain, the study also quantifies the additional manufacturing jobs attributed to the broader macroeconomic contributions that begin with unconventional oil and natural gas,” the release said. “More than 460,000 combined manufacturing jobs (3.7% of all manufacturing jobs) will be supported in 2020, rising to nearly 515,000 (4.2% of total manufacturing jobs) in 2025. The manufacturing sector will become increasingly connected to unconventional development as a primary source to create and sustain jobs over the course of the study period.” Unconventional production also has brought low-cost energy to industries such as petroleum refining, aluminum, cement, and other energy-related industries. The study showed that more than 70% of the cost of producing energy-related chemicals, including petrochemicals such as olefins, methanol, and ammonia, is the cost of energy feedstocks and raw materials, according to the release. The benefits from unconventional oil and gas activity just keep flowing. The challenge now lies in maintaining the momentum. Contact the author, Velda Addison, at email@example.com.
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