The shale energy boom is being called “perhaps the largest single opportunity to change America’s competitiveness” in a report by Michael Porter of the Harvard Business School along with David Gee and Gregory J. Pope of the Boston Consulting Group.
Two big reasons are savings for consumers and the millions of new jobs created. To further take advantage of the boom, policymakers must make it easier to export American energy.
Consumers Have Saved Money
By using the high-tech combination of big data analytics, horizontal drilling, and hydraulic fracturing, the energy industry has boosted domestic oil and natural gas production.
This abundance has lowered energy costs. The report finds that in 2014, “residential, commercial, and industrial users saved about $90 billion in natural gas and natural gas liquids (ethane, propane, and butane) fuel costs.”
All told, the report finds that in 2014, the shale boom saved consumers $780 dollars in energy costs. That’s about as much as Angie’s List recommends a family should spend on a new clothes dryer.
Consumers savings from the shale boom—mostly from lower-priced goods--is expected to increase to $1,070 by 2030.
New Jobs and Economic Growth
Another way the shale boom has fattened Americans' wallets is by generating jobs and economic growth. The report finds shale energy development created 2.7 million jobs and added $43 billion to the U.S. economy in 2014.
The jobs created pay well: “[T]he average unconventionals production job pays nearly twice the national average salary and offers a significant opportunity for middle-skilled workers.”
How Far Will the Boom Take Us?
Even with weaker oil prices, don’t expect the shale boom’s benefits to let up. The report estimates that by 2030 3.8 million jobs will be supported it, and $590 billion added to the economy.
Allowing Exports Will Extend the Boom
To build on the shale boom’s success, the report advises that the oil export ban be lifted along with easing the federal permitting process for liquefied natural gas export facilities:
Natural-gas and crude-oil exports leverage America’s strengths, increase economic growth, and benefit partner nations, without compromising our competitiveness, environmental standards, or domestic prices. Current U.S. restrictions on natural gas and oil exports are antiquated and based on historical circumstances that no longer apply.
Today, ample new domestic resources mean that removing these antiquated restrictions will both reduce the U.S. trade deficit and bolster the value of unconventionals to the U.S. economy, while having little if any impact on consumer prices.
Every study that has been done has found that lifting the oil export ban will not raise gasoline prices.
We’re witnessing “a once-in-a-generation opportunity to change the nation’s economic and energy trajectory.” The shale boom has turned global energy markets upside down and opened up new opportunities for the U.S. Let’s take full advantage of this moment.