Report: Drilling benefits will ripple throughout states

The oil and natural gas drilling boom that has already bought new jobs to North Dakota and Ohio will reshape the nation’s economic landscape over the next five years, according to a report issued Thursday.

Economic benefits from the activity — and the hydrocarbons pulled out of the ground — will be far flung, supporting a surge in sand mining in Wisconsin, turbine manufacturing in the Carolinas and other work far from the drilling hubs, the report concludes.

“The effects go far beyond local areas and regions with drilling,” ICF International says in the analysis it conducted for the American Clean Skies Foundation. “Industrial expansion involves facilities such as gas and liquids pipelines, gas processing plants, petrochemical plants, steel manufacturing, sand mining, ammonia production, methanol production and LNG export terminals.”

The report is just the latest to highlight the economic benefits of domestic oil and gas development. While other recent studies have focused on the broad national job and gross domestic product gains associated with the surge in domestic drilling, the new ICF International analysis highlights the effects across all 50 states.

The study also links abundant, low-priced natural gas with a domestic manufacturing renaissance. For every billion cubic feet of additional gas production per day, according to the report, there are 13,000 new drilling and pipeline jobs, plus thousands of indirect jobs in chemical plants and other gas-using facilities.

“The economic impact is widely distributed across the U.S. and has already had very large positive GDP impacts in major production growth areas,” the report says.

While drilling hotbeds of North Dakota, Texas, Oklahoma, Louisiana and others will see some of the largest GDP and employment impacts, according to the study, states such as Wisconsin and Ohio benefit from providing services to energy and pipeline companies.

Report author Harry Vidas, vice president of ICF’s oil and gas division, said the analysis “gives us considerable confidence that the economic benefits we are seeing today will last well into the next decade.” Vidas credits the long-lasting effects to the “large available resource base opened up by technological advances and the extensive business plans in place for its production and use.”

Energy companies are using horizontal drilling and hydraulic fracturing to extract natural gas and oil from dense rock formations, in a change from historic drilling practices that tapped large underground reservoirs. The hydraulic fracturing technique involves blasting sand, water and chemicals underground to free natural gas and oil trapped in the pores of the rock — releasing a whole new supply of the hydrocarbons that were previously thought inaccessible.

American Clean Skies Foundation CEO Gregory Staple said the report captures the bigger picture surrounding domestic production.

“This report helps us put a face on the large economic stimulus that shale gas production has provided for America,” Staple said in a statement.

The not-for-profit foundation aims to advance America’s energy independence and backs using natural gas, renewable power and greater efficiency to achieve a cleaner, low-carbon environment. Its board of directors includes oil and gas executives, including Chesapeake Energy Corp. CEO Aubrey McClendon and GHK Exploration founder Robert Hefner.