U.S. Energy Production Gives Economy Much-Needed Boost

The increase in U.S. natural gas and oil production has had a larger impact on the nation’s economy than predicted.

September 05, 2013

WASHINGTON, D.C. – The U.S. economy received a bigger influx of positive growth from the country’s oil and natural gas production than expected, USA Today reports. New sources of U.S. natural gas and oil have given the average American family more than $1,200 in discretionary income in 2012, according to a new study by consulting firm HIS.

The domestic oil and natural gas industries now employ 1.2 million people, indirectly and directly. IHS predicts that will jump to 3.3 million by the end of this decade. The study estimated that by 2015, the impact of energy will reach $2,000 of disposable income per U.S. household each year.

The numbers IHS is touting are higher than other economists had predicted, but that’s partly attributed to new technologies such as horizontal drilling and hydraulic fracking, which has pushed natural gas reserves 58% higher since 2007. “Anyone who doubts the reality of this is not paying attention,'” said John Larson, vice president of IHS and co-leader of the team that authored the report. “You're seeing the production numbers in both gas and oil to support it.'”

For U.S. households, the largest impact is paying less for heating and electricity. Government data supports much of the study’s findings, citing residential natural gas prices as lower by 12% to 32% since 2008, according to the U.S. Energy Department.

Two years ago, U.S. gas and oil companies increased crude oil and related reserves by nearly 3.8 billion barrels — a bump of 15% and the largest advance since 1977, when the U.S. Energy Information Administration started publishing reserve data.

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