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Shale Puts US on Cusp of Energy Independence
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WASHINGTON -- Robust drilling activity in rich shale plays has enabled the United States to overtake Russia as the world's leading producer of natural gas and increase its oil output for the first time in decades. The United States could surpass Russia as the world's second-leading producer of liquid hydrocarbons, just behind Saudi Arabia, says a new report by the editors of Energy & Income Advisor.
The editors, also the founders of the semi-monthly online newsletter, are Roger S. Conrad and Elliott H. Gue, who say these accomplishments “are even more impressive when you consider that they occurred despite a government-instituted moratorium on deepwater drilling after the BP oil spill in the Gulf of Mexico.”
The shale oil and gas revolution also has provided a much-needed stimulus to the U.S. economy, they write. In their report they say,
America's growing abundance of domestically produced natural gas means that households and commercial customers enjoy some of the lowest gas and electricity costs in the world.
Surging domestic production of natural gas liquids has breathed new life into the U.S. petrochemical industry by lowering its feedstock costs to the point that American chemical plants enjoy superior cash margins to competitors in Europe and China.
The American Chemical Council has catalogued $72 billion in planned chemical and plastics projects to take advantage of America's cheap and bountiful domestic energy.
U.S. imports of light-sweet crude oil continue to shrink and will soon hit zero on the Gulf Coast, reducing America's reliance on expensive foreign oil.
U.S. exports of propane, gasoline and diesel have surged to record highs and the nation is building the infrastructure to liquefy and export low-cost natural gas to high-priced markets in Asia.
The U.S. Bureau of Labor Statistics reports that employment in oil and natural-gas extraction increased by 22% over the past three years.
Research firm IHS estimates that the number of jobs directly or indirectly supported by the domestic energy boom will increase to 3.3 million by 2020.
Conrad and Gue expect gains in drilling efficiency and declining production costs to fuel additional growth in America's hydrocarbon output. "Major plays such as the Bakken Shale in North Dakota, the Eagle Ford Shale in south Texas and the Marcellus Shale in Appalachia are shifting from the developmental stage to a manufacturing stage," Conrad noted. "This evolution has lowered costs above ground and on the surface."
"Innovations such as pad drilling, which enables producers to drill multiple wells at a single site, have reduced the time and money needed to extract oil and gas from these plays," Gue added. "We also expect innovations on the completion side to improve initial production and ultimate recovery rates."
Published by The Business Journal, Youngstown, Ohio.
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