A report released this week from IHS finds unconventional oil and natural gas activity will add as much as $61 billion to federal and state coffers this year. In Ohio, where much of the boom is focused, the U.S. Geological Survey found the Utica shale play could hold as much as 38 trillion cubic feet and 940 million barrels of oil reserves. Against the clamoring over the prospects that resources like shale may be a panacea for a beleaguered economy, however, comes quiet concern that an inevitable bust will follow the current boom.
IHS, in a study published on what it says is the new American future, finds that the upstream unconventional oil and natural gas sector in the United States could support as many as 3.5 million jobs by 2035. In terms of revenue, that translates to as much as $124 billion for federal and state government revenues by 2035. For reserves, IHS expects a transformation in the U.S. energy sector, where as much as 70 percent of total U.S. oil production is expected to come from so-called unconventional tight oil reserves.
Daniel Yergin, the author of the study, said the United States has the highest growth rate in crude oil production capacity in the world.
"That growth has not only contributed to U.S. energy security but is a significant source of new jobs and economic activity at a time when the economy is a top priority," he said in a statement.
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In its first estimate of the Utica shale play in Ohio, the U.S. Geological Survey found the formation could hold as much as 38 trillion cubic feet of recoverable natural gas and 940 million barrels of oil. The Utica play lies underneath the Marcellus formation, which is thought to be one of the richest deposits of natural gas in the world.
"The study highlights the extraordinary opportunities we have right here at home to develop our unconventional oil and gas resources and return our economy to a pro-growth engine," said Jack Gerard, president of the American Petroleum Institute.
A recent independent survey of Ohio legislation, however, found the state is one of the least transparent in terms of energy reporting. Analysts said the lack of third-party assessments has given potential investors cause for concern. An economist from Ohio, meanwhile, said long-term cycles in resource-rich states are "a little scary" for the state. Though landowners there are getting rich by leasing their property to prospective oil and natural gas developers, future prospects may eventually dwindle once wells there dry up. States with natural resources, the economist said, usually underperform when compared with their counterparts with no natural resources.
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Technological advancements in oil and natural gas exploration have uncovered reserves previously considered off limits. These advancements, in turn, may transform the United States into something of a petroleum state on par with the likes of Saudi Arabia. A report from Citibank stating that Riyadh may eventually start importing oil in the next 20 years, however, serves as a stark reminder that resources like oil and natural gas aren't renewable. While the oil and natural gas boom in the United States may last a generation, every well, no matter the prospects, dries up.
By. Daniel J. Graeber of Oilprice.com
Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,… More
Comments
But, what's the point of this silly article. Ghost towns in,....30 years? Let's NOT drill for oil/gas resources because the wells are finite and will eventually run-out? Rather than look on the bleak side, how about writing an article as to the economic benefits such oil drilling activity will create? We still need energy, don't we? Perhaps you are suggesting that we need to slow down this fracking phenominon? Tax em! Yep, that's what we should do. Or maybe we can get the EPA to crank-out 70or more new laws regulating this new energy thing? We need to slow this thing down right now,..or,..or, all of these ghost towns will appear in 30 or so years? Can't have that now, can we? Stop em now!
Yes, ghost towns happen. So what?
Clean water is a necessity for all forms of life and there is a finite amount of it on earth. If the drought conditions existing during the last few years continue and these conditions are added into the expense equation, fracking is indeed a very expensive way to gain jobs and cheap fuel when viewing clean water use and its impact on life.
If the method can be altered to help mitigate these circumstances, then go for it.
Note that Halliburton has solutions for fracking and produced water treatment: http://www.halliburton.com/ps/Default.aspx?navid=2427&pageid=4975&prodid=PRN::L4VUQW15
This solution is said to enable water reuse, instead of deep disposal, all be it at a higher price.