Hydraulic fracturing is good for oil production and its also good for the economy
A Purdue University study found the current oil and gas production should add an average of 3.5 percent annually through 2035 by raising the nation’s gross domestic product (GDP).
Energy economists at Purdue said the new boom in production amounts to about $473 billion a year going into the U.S. economy and could reach $487 billion by restricting gas exports.
“The economic impact of shale oil and gas is clear,” said Wally Tyner, the James and Lois Ackerman Professor of Agricultural Economics and one of the researchers in a release. “It is a game changer for the U.S. economy.”
Production has already been a game changer for the North Dakota economy, which touted a budget surplus of more than $1 billion and unemployment marks near 3 percent.
The study shows increasing impact on reducing oil and natural gas prices across the nation. It says on average each year, oil prices would be 7 percent lower and gas prices 12 percent lower than without the increased production.
With gas exports limited, natural gas prices would drop by 24.1 percent and the economy would pick up an additional $13.3 billion.
U.S. oil production is at the highest its been since 1989 and in North Dakota, a record barrel a day mark was reached at 900,000 in August.
“Our results indicate that the shale oil and gas boom should have a major impact on the U.S. economy,” the researchers said.
America’s GDP from 2008 to 2035, according to the study, will average 2.2 percent higher than its 2007 level. Without the expansion of shale products, it said the GDP would average 1.3 percent lower.
GDP levels in the U.S. were recorded at -3.1 percent in 2009, falling from -.04 in 2008 before rising in 2010 (2.4 percent) and fluctuating in 2011 (1.8) and 2012 (2.2), according to the World Bank.