Posted October 22, 2013
Working in Washington D.C. big numbers (trillions and trillions) are thrown around casually, which can sometimes distort what these numbers actually mean in the real world. An example from yesterday’s Washington Post:
The shale-gas boom will provide a modest boost to the U.S. economy. On average, the models in the Stanford study predicted that the natural-gas boom would raise GDP by about $70 billion per year over the next several decades (in current dollars).
$70 billion a year! While, as the article notes, it is not an overwhelming percentage of GDP, ours is a big economy and $70 billion a year is nothing to be modest about. There is a great breadth of industries contributing to our great economy so for comparison let’s pick one, and since I’m a big movie fan, let’s look at motion pictures.
According to Box Office Mojo, the gross worldwide receipts for U.S. released movies in 2012 was about $27.7 billion; and the BEA put the value add to U.S GDP of the “Motion picture and sound recording industries” in 2011 –the latest year available– at $60.2 billion. The U.S. motion picture industry leads the world and the economic contributions of the motion picture and sound recording industries are not modest by any means, so this gives you some idea of the boost shale gas is bringing to the economy. The simple fact is our economy does best when all of our industries are doing better.
ABOUT THE AUTHOR
Erik Milito is the Director of Upstream and Industry Operations for API. Erik’s work covers regulatory and legislative matters related to domestic exploration and production, including access to domestic oil and natural gas resources both onshore and offshore. Prior to his current position, Erik served as managing counsel at API, covering a host of issues, including oil and gas leasing, royalty, environmental, fuels, transportation, safety, and civil justice reform.