A report published Wednesday by an industry group found that hydraulic fracturing, or fracking, for oil and natural gas in Texas’ Barnett shale formation produced $11.8 billion each year and created more than 107,000 permanent jobs.
The report, entitled “An Energy Revolution: 35 Years of Fracking in the Barnett Shale,” highlights the scale of the fracking boom in Texas. The geologic formation around the Barnett Shale has used fracking to produce more than 15 trillion cubic feet of natural gas since 2003, enough to heat 225 million homes for one year. Nearly two-thirds of U.S. natural gas production currently comes from fracking, up from just one percent in 2000, according to the report.The report was written by the pro-industry group North Texans for Natural Gas. The group’s website claims that it has more than 150,000 supporters from all over North Texas.
“The United States is in the midst of an energy revolution,” states the report’s executive summary. “Few experts saw this transformation coming, and it was made possible by the use of hydraulic fracturing (fracking) and horizontal drilling, which allowed oil and natural gas to be unlocked from tight rock (shale) formations. This revolution first began in North Texas 35 years ago, with the Barnett Shale being the birthplace of modern-day fracking.”
Fracking is the process of using a high-pressure water mixture to release natural gas or oil from rock, unlocking reserves that were previously economically unfeasible to access. The use of this process has triggered an oil and natural gas boom, which allowed the U.S. to pass Russia as the world’s largest producer of both oil and natural gas.
The study found that lower natural gas prices from fracking saved the average Texan $432 in energy and
home heating costs in Texas between 2007 and 2013. A similar report published early last month by the federal Energy Information Administration (EIA) found that cheap oil and natural gas provided by fracking lowered the annual cost of living for the average American by almost $750.
These kinds of cost savings are great for the economy. When the price of energy decreases, the cost of goods and services produced using that energy declines as well. Cheap oil and natural gas means that any product transported to market and every service produced with electricity gets cheaper. Thus, low energy prices effectively reduce the price of almost everything.
This is especially great news for the poor, who tend to spend a higher proportion of their incomes on energy.
“It may not have a huge effect on the top 10 percent of households, but if you’re earning $30,000 or $40,000 a year and drive to work, this is a big deal,” Guy Berger, a Royal Bank of Scotland economist, told The New York Times. “Conceptually, this is the opposite of the stock market boom, which was concentrated at the top.”
The Barnett Shale also includes an estimated 172 million barrels of shale oil and 176 million barrels of natural gas liquids, twice as much natural gas and oil as expected, according to a December study by the U.S. Geological Survey. To put those reserves in some context, Saudi Arabia’s total proven oil reserves are estimated to be 268 billion barrels, according to the Central Intelligence Agency.
The Barnett Shale is not the only formation reassessed by the USGS to have double the reserves expected thanks to fracking. An updated assessment of the Bakken Formation in North Dakota came to a similar conclusion in 2013, as did a 2011 assessment of the Marcellus Shale.
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