The recent energy explosion brought about by hydraulic fracturing (“fracking”) has not only benefited the states where it is practiced most, but it has also lifted the U.S. economy by lowering the cost of energy, according to an industry-funded study.
The fracking boom in 2012 supported roughly 2.1 million jobs, added an estimated $75 billion in fed and state revenues, added $283 billion to gross domestic product (the total output of goods and services in the U.S.), and increased household incomes by roughly $1,200, Bloomberg notes, citing a report released Tuesday by IHS CERA.
The report adds that by lowering the cost of fuel prices, U.S. manufactures are on track to increase industrial production by approximately 3.5 percent by 2020.
“What really surprised me was how powerful an impact it is having to such a broad base of the economy,” said John Larson, vice president of economics and public sector consulting for IHS CERA. “It makes it to me a story that all Americans really need to come to grips with and understand.”
Fracking has actually helped push U.S. oil and gas production to near record levels.
But even with these production gains and the reported contributions to the U.S. economy, environmental activists protest the practice, claiming it’s wasteful and poses a serious public health risk.
Mark Brownstein, chief counsel for the Environmental Defense Fund in New York, said fracking has strained “water resources in parts of Texas that are experiencing drought conditions,” Bloomberg notes.
“If you’re going to make the argument that there are benefits to developing this resource you have to also be prepared to make the argument that you’re going to do everything possible to minimize risks to public health and the environment,” said Brownstein. “Unless you’re taking the appropriate steps to minimize those risks, you are imposing tremendous costs on communities.”
Others claim the practice is responsible for contaminated water supplies in Pennsylvania and Texas.
However, according landmark federal study, there is nothing to prove chemicals from the natural gas drilling process contaminated drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press in July.
Larson maintains that the practice is good for business and good for the U.S. economy, claiming that it will increase employment throughout the country.
Jobs tied to the energy boom (either directly or indirectly) will reach 3.3 million by 2020, Larson’s report claims.
“Disposable income will rise as a result of lower energy prices, adding $2,700 per household in 2020 and more than $3,500 by 2025,” Bloomberg adds.
Larson warned that interference in production – such as state or federal bans – could seriously hinder economic growth and destroy possible future economic benefits.
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