RPT-Shale gas bright spot in troubled US economy-report

Tue Dec 6, 2011 3:39pm GMT
 

(Repeats with no changes in text)
    * IHS-job growth from shale gas outpaces stagnant economy
    * Comes as regulators weigh new rules on gas wells
    By Roberta Rampton
    WASHINGTON, Dec 5 (Reuters) - North America's massive
supplies of natural gas have brought new found wealth to the
U.S. job market and are a bright spot in an otherwise
struggling economy, a new report from forecaster IHS Global
Insight shows.
    In Washington, where President Barack Obama and lawmakers
are fixated on job creation, the report, commissioned by a
natural gas industry group, could fuel arguments from
Republicans that federal regulators should stay out of
"fracking."
    The technique is used by drillers to blast gas from shale
rock using sand, water and chemicals. Environmental groups
worry fracking pollutes water, a charge that industry refutes.
    IHS Global Insight's report focuses on the economic impacts
of an industry already touted by Republicans as holding great
promise, finding more than 600,000 U.S. jobs supported by shale
gas.
    Of those, 148,000 are directly involved with drilling, and
each of those creates more than three spin-off jobs in supplies
and services - a multiplier effect greater than seen in the
financial and construction industries, said John Larson, a
vice-president at the firm, and lead author of the study.
    By 2015, total jobs are forecast to grow to 870,000, he
said. "There are not a lot of industries right now in this
economy adding net new jobs," Larson said in an interview.
    "It clearly does stand in stark contrast to the broader
economy and this long and painful recovery," he said.
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
    NY fracking ban supported by protesters    [ID:nL1E7MU313]
    Oil-funded study: drilling could add jobs  [ID:nN1E7861FQ]
    FACTBOX-Concerns about fracking            [ID:nN1E77A0ZP]
    TAKE A LOOK-Debate over shale              [ID:nN1E7AM15C]
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
    REGULATORY STATUS QUO
    The shale gas industry is projected to contribute $118.2
billion to the economy by 2015, up 53 percent from last year's
level, the consulting firm said in the report, which was
commissioned by industry group America's Natural Gas Alliance.
    The results were based on independent data and analysis,
Larson said. "Our hope here was to provide a piece of the
discussion that we felt quite honestly was missing" about what
shale gas means to the economy, he said.
    The report comes ahead of the 2012 presidential election,
where persistent unemployment is the top issue and as federal
environmental regulators weigh a larger role in the industry,
currently monitored mainly at the state level.
    The U.S. Environmental Protection Agency is looking at new
standards for wastewater discharged from gas wells, and is
finalizing rules for air pollution from the wells.
    It is also studying the impact of fracking on drinking
water, and wants to propose a new rule to gather data about
chemicals used in fracking.
    Some states have also constrained drilling. The report
assumed the status quo remains in place for regulations. For
example, it did not forecast any new development in New York
state, which is considering whether to lift a ban on fracking.
    Lower electricity prices created by the bounty of natural
gas has also helped the economy, leading to another 809,000
jobs by 2015, Larson said. Eventually, the new supplies could
spur growth in the U.S. chemical industry, creating even more
jobs, he said.
    The industry also provided $18.6 billion in tax and royalty
revenues in 2010 to cash-strapped government at all levels -
equivalent to what the federal government spent on the
Environmental Protection Agency and National Science Foundation
combined, the report said.
    Early in 2012, the firm plans to release a report on the
economic impact from unconventional oil, such as that coming
from North Dakota's Bakken development, and another on how
growth in Canadian natural gas production has benefited U.S.
suppliers.
    (Editing by Bob Burgdorfer)

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.6974
Euro USD =1.3472
Rand USD =0.0953