The American Petroleum Institute outlined the economics of domestic shale gas production today, which it says may result in a world where no one region of the world will dominate the energy supply, and the United States may not only meet its own needs but even export natural gas.
API Chief Economist John Felmy says the Marcellus Shale has the potential to be one of the largest natural gas fields in the world, and he says hydraulic fracturing can be done safely, with not one confirmed case of underground water supply contamination in the country.
People who live near drilling sites and can no longer use the water from their wells might disagree.
Felmy says a 2009 study by the Manhattan Institute found that shale gas development added more than 44,000 jobs, $389 million in state and local taxes, and nearly $4 billion in value to Pennsylvania’s economy.
Articles in the New York Times recently questioned the true scale of shale gas in the U.S., but Felmy says shale gas production tripled between 2006 and 2010 and will make up 40% of domestic production by 2020. The Department of Energy says shale gas was 15% of domestic production in 2009 and may be 25% by 2035.
Penn State Professor Terry Engelder is a member of Governor Tom Corbett’s Marcellus Shale Commission, which will issue its recommendations on or about July 22nd. He says members were astounded by the scale of economic activity in Williamsport over the last three years due to Marcellus Shale development. To critics who say the energy companies are not making money on Marcellus Shale gas wells, Engelder says the industry knows they’re making long-term investments that will not pay off for eight to ten years because of high up-front costs for drilling and infrastructure.