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Ohio Utica Shale

Drilling industry created 1.7 million jobs this year, study says

By Bob Downing Published: October 24, 2012

From Reuters:

By Roberta Rampton

WASHINGTON, Oct 23:  The U.S. oil and gas rush is cutting into jobless numbers, supporting a total of 1.7 million jobs this year, a number that will swell to almost 3 million by 2020, a leading consultant said in a study released on Tuesday.

The report by forecaster IHS Global Insight is part of a series attempting to quantify the impact that booming production of so-called "unconventional" oil and gas has had on the American economy.

Using new technology to blast fossil fuels trapped in shale rock has transformed the U.S. energy sector.

After five years of rapid growth, unconventional oil accounts for about 2 million barrels per day of U.S. production in 2012, IHS said. Total U.S. crude oil production is expected to average 6.3 million barrels per day, according to the Energy Information Administration.

Unconventional oil will outpace conventionally drilled oil by 2015 and reach close to 4.5 million bpd by 2020, representing close to two-thirds of total U.S. crude and condensate production, IHS said.

"At which point do you stop calling this unconventional?" said John Larson, a vice-president at the firm and lead author of the study, in an interview.

"This is going to become the convention."

Oil, gas and chemical lobby groups helped pay for the study but did not influence its independent, data-driven results, Larson said.



President Barack Obama cited an earlier report in the IHS series on the campaign trail and in a State of the Union address that documented 600,000 jobs created by the natural gas sector.

That natural gas employment estimate has since swelled to 900,000 jobs, Larson said, noting more data is now available about new "plays" where companies are drilling.

By 2020, IHS forecasts about 1.3 million additional jobs in unconventional oil and gas, with the sector contributing more than $416 billion to the economy.

Of the 3 million total jobs, IHS said about 20 percent would come directly from the upstream oil and gas industry, with more than 900,000 people employed by suppliers and about 1.5 million "induced" jobs from spending by workers in the sector.

With 12 million Americans unemployed and about 23 million underemployed, the growth in unconventional oil and gas jobs is helping take some slack out of the jobs market, Larson said.

"This is really overwhelmingly net new jobs being added to the economy," he said.



The report comes as the Environmental Protection Agency considers what role it should play in regulating hydraulic fracturing or "fracking," the technology used by drillers to blast sand, water and chemicals into shale rock to unleash the oil and gas.

Environmental groups have raised concerns that fracking can pollute groundwater and air, but the industry says the practice is safe so long as wells are properly built.

The projections in the report assume the industry remains regulated mainly at the state level, and also assumes that most growth in drilling continues to happen on privately owned land, Larson said.

The sector currently contributes more than $61 billion in revenues to government, rising to more than $111 billion by 2020, assuming no changes to the industry's tax incentives.

However, both Obama and Republican presidential candidate Mitt Romney have talked about rolling back those tax breaks as U.S. policy makers look for ways to boost revenues to help avert massive spending cuts and personal income tax increases that are part of the "fiscal cliff" looming at the end of the year.

In February, IHS is planning another report in the series looking at how the energy boom has led to a "renaissance" in the U.S. manufacturing sector.

Part of that report will forecast jobs created by proposed exports of liquefied natural gas, Larson said.

IHS currently assumes exports of 4 billion to 6 billion cubic feet per day by 2035, Larson said -- far less than what companies have proposed to build.

Even if the Energy Department gives a green light for exports, IHS does not believe the global market is strong enough to support all the proposals, Larson said.

"It's really hard for us to see how all those (terminals), even if they were approved, end up being built," he said.




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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.