While the shale boom has been an unexpected bonanza for the energy industry, some experts are calculating that it will add a huge boost to the US economy by the end of the decade.
McKinsey & Co. is estimating that the shale industry will generate $700 billion for the US economy by 2020, as it transforms related industries, such as manufacturing, trade and infrastructure demands.
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Some of that bonanza could continue to lend a big hand to the Houston economy.
“If we play our cards right, we can use shale energy as a way to make a difference in our regional economy, with LNG exports and petrochemicals – this can create a lot of opportunities for middle skilled jobs,” said Scott Nyquist, a leader of the energy practice with McKinsey. “This is a great way to take some of that talent put to use in long term, reasonably high paying jobs. If we link it to the port, this export of chemicals can be part of our growth in trade.”
McKinsey is calling the shale boom one of the five ‘game changers’, in a report that looks at the five leading disruptive factors expected to transform the economy. The other game changers include the growing importance of big data, the need for more infrastructure, and challenges of developing a knowledge-based workforce.
“The shale boom, for example, has already provided an immediate spark as it coaxes private capital off the sidelines and leads to new investment in both oil and gas production and energy-intensive manufacturing,” the report said.
McKinsey estimates that the shale industry could add about 2 to 4 percent to the gross domestic product by 2020, as well as 1.7 million permanent jobs. Investment in shale energy is expected to stimulate $1.4 trillion in infrastructure investments, generating 1.6 million temporary jobs during the construction phase.