The People of America's Oil and Natural Gas Indusry

America’s Fracking Energy Progress

Mark Green

Mark Green
Posted March 29, 2016

A quick list of some of the benefits realized by the United States thanks to modern hydraulic fracturing and advanced horizontal drilling:

Surging oil and natural gas production

The United States is the world’s leading producer of oil and natural gas, resulting in lower oil imports and an opportunity for the U.S. to compete with other producers in the global market.

According to the U.S. Energy Information Administration, oil production from safely fractured wells totaled more than 4.3 million barrels per day in 2015, about half of all U.S. oil output:

output

EIA:

In 2000, approximately 23,000 hydraulically fractured wells produced 102,000 barrels per day (b/d) of oil in the United States, making up less than 2% of the national total. By 2015, the number of hydraulically fractured wells grew to an estimated 300,000, and production from those wells had grown to more than 4.3 million b/d, making up about 50% of the total oil output of the United States.

Here’s an EIA chart showing the dramatic growth in oil production from hydraulically fractured wells:

hf

Indeed, crude oil production in the Lower 48 from new wells drilled since the start of 2014 accounted for 48 percent of total U.S. crude output in 2015. The production surge has followed advances in horizontal drilling and completion techniques:

wells

At the same time, domestic natural gas production also has surged, growing from 2 trillion cubic feet (tcf) in 2008 to 15 tcf in 2015. The market is choosing abundant, affordable, cleaner-burning natural gas for power generation, with EIA projecting that gas will be the United States’ leading fuel source for electricity generation this year (33 percent).


Economic boost

The U.S. energy revolution – driven by safe hydraulic fracturing – is widely credited with helping our economy emerge from recession and also with reinvigorating the U.S. manufacturing, chemicals and other sectors.  Anna Mikulska, Michael Maher and Kenneth B. Medlock III write in Forbes:

The dramatic increase in domestic oil and gas production since 2008 – the so-called “shale revolution” – has been a boon to the US economy and the Obama administration … At the core of this evolution is hydraulic fracturing. When the US economy needed a boost after the 2008 global recession, the shale revolution delivered by providing job growth and economic stimulus.

More from Forbes:

Low-price natural gas has also revitalized the industrial base in the United States, with ongoing and planned $100+ billion in expansions in the petrochemical and manufacturing sectors, a source of real macroeconomic benefit and rebuilding of the high-wage, skilled manufacturing workforce. It has also stimulated significant investment in the midstream sector, from pipes to LNG export terminals, which also carry substantial benefits for the labor force and the macroeconomy more generally.

There are individual household benefits as well. According to IHS, U.S. households have been provided an additional $1,200 in disposable income because of lower energy costs.


Increased U.S. security

The United States is more energy secure because it is producing more of the energy it uses right here at home instead of importing it. For the first time in four decades, the U.S. has begun exporting domestic crude to friendly buyers overseas. And it is poised to be a major player in the global liquefied natural gas export market. Diversification of global supply is helping America’s friends and generally is countering production losses around the globe. Forbes:

[G]rowth in US oil production alone offset the losses in production from countries beset by sanctions, civil strife and/or sector mismanagement.  This, in turn, has impacted US foreign policy as domestic oil and gas have become credible threats to perceived hegemonic intent by countries such as Russia and Venezuela.


Climate progress

The availability of cleaner-burning natural gas is helping the U.S. lead the world in reducing carbon dioxide emissions (CO2), as the chart below shows. From 2006 through 2014, 61.4 percent of CO2 emissions reductions in the U.S. electric power sector came from fuel shifting toward natural gas, according to EIA. 

economies

At the same time, emissions from energy development continue to fall. According to EPA, methane emissions from hydraulically fractured natural gas wells has fallen 79 percent since 2005.

So here’s the story: In this context of all the progress described above, some are pushing an anti-progress, anti-fracking agenda that would take the United States down the wrong path – in terms of developing the reliable fuels that power modern living, economic growth, America’s energy security and advancing climate objectives. Let’s be clear: Opposing safe, modern hydraulic fracturing isn’t just opposing oil and anti-natural gas, it’s opposing American progress. Nicolas Loris of the Daily Signal writes:

Fracking has safely provided a much needed boon to the American economy. Attacking it with unfounded rhetoric is an assault not just on the industry itself, but on American businesses and families who benefit from the influx of domestic natural gas and oil fracking companies supply.

This path would make America more energy dependent on other countries – diminishing U.S. security – and it would make life harder, in a broad economic sense and for individual families. We would discard the lessons and benefits of the U.S. model of growing energy production, economic growth and carbon emissions reductions.

In Forbes, Mikulska, Maher and Medlock write that a federal ban on shale development would make natural gas more expensive, that a full ban on fracking would reduce domestic gas production by more than 30 percent or more than  9 tcf by 2030 compared to a no-ban reference case. Under a fracking ban, they write, U.S. consumers in 2030 would pay about $100 billion more a year for natural gas. Revival in the U.S. manufacturing sector would be cut short. More:

In addition, by altering US production, a ban on hydraulic fracturing can shift the US position from one of being an exporter to the global market in the coming years to one of importer, effectively cementing the fate that many though would come to pass in the late-1990s/early-2000s – namely, the US as a large importer of LNG. More generally, if US supplies to the global market are impeded, the impact the US has on global landscape is diminished. This will result in reduced liquidity and slow ongoing transitions in the global LNG market. In addition, any geopolitical leverage associated with a greater US supply presence in both Asia and Europe would be foregone. Instead, two of the key beneficiaries of the ban and decreased US supply would be Russia and Iran, the top two holders of natural gas reserves.

Writing for The Hill, Paul Sullivan, economics professor at the National Defense University, says the fracking-led U.S. energy revolution has produced “amazing positives” in a short time period – economic recovery and job creation, reduced energy costs and more. Sullivan writes that turning our backs on such progress would have significant costs:

What if we stopped fracking tomorrow? We would lose massive amounts of jobs, investments, oil, gas, and more (both the actual today and the huge potential ones in the future). Import costs would go up. Export revenues would go down. Inflation would go up. The economy would go down. Unemployment would go up. Standards of living would go down.  Energy price shocks cause economic downturns. Stopping fracking would cause one of the biggest energy shocks in the recent past. Who wants that?

The answer is just about no one. Safe hydraulic fracturing and the energy it produces is critically important for a more prosperous, more competitive, more secure United States now and in the future.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.