Legendary US energy analyst and prize-winning author, Daniel Yergin, has just delivered his opinions on the shale gas revolution at a Washington hearing on “America’s Energy Security and Innovation”
He told the committee that indeed the US is in the midst of the “unconventional revolution in oil and gas” and that, it becomes increasingly apparent, goes beyond energy itself.
He reported that it already supports 1.7million jobs and that number could rise to 3million by 2020.
“In 2012, this revolution added $62billion to federal and state government revenues, a number that we project could rise to about $113billion by 2020,” said Dr Yergin, who was the co-founder and chairman of Cambridge Energy Research Associates, an energy research consultancy that is now part of IHS Inc of which he is today vice chairman.
Despite the Dutch Disease referred to by Dick Winchester on page eight of this edition, he said shale gas (and its associated “tight” oil) is helping to “stimulate a manufacturing renaissance in the US, improving the nation’s competitive position in the global economy, and beginning to affect global geopolitics”
“Shale gas has risen from just 2% of domestic production a decade ago to 37% of supply, and prices have dropped dramatically,” said Dr Yergin.
“US oil output, instead of continuing its long decline, has increased dramatically – by about 38% since 2008. Just the increase since 2008 is equivalent to the entire output of Nigeria, the seventh-largest producing country in Opec.”
Yergin continued: “It was not until the autumn of 2009 that the shale revolution became apparent to the policy community. And it was only around 2010 that producers began to shift from focusing on gas production to producing oil and liquids-rich natural gas using the same techniques.
“It was only in about 2011 that its significance for the national economy started to come into focus.”
Dr Yergin warned that even just a few years ago, much of the US corporate world would have laughed at the prospect of such a turnaround in oil and gas fortunes, let alone be willing to invest the $100billion or so now being talked about.
On the wider picture, he predicted that the Western Hemisphere, and North America in particular, would move towards greater self sufficiency in energy.
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