Wednesday, 24 October 2012

US energy sector fuels jobs growth, says IHS

REUTERS

WASHINGTON

THE US oil and gas rush is cutting into jobless numbers, supporting a total of 1.7 million jobs this year, a number that will swell to almost 3 million by 2020, a leading consultant said in a study released on Tuesday.

The report by forecaster IHS Global Insight is part of a series attempting to quantify the impact that booming production of so-called “unconventional” oil and gas has had on the American economy.

Using new technology to blast fossil fuels trapped in shale rock has transformed the US energy sector.

After five years of rapid growth, unconventional oil accounts for about 2 million barrels per day of US production in 2012, IHS said. Total US crude oil production is expected to average 6.3 million barrels per day, according to the Energy Information Administration.

Unconventional oil will outpace conventionally drilled oil by 2015 and reach close to 4.5 million bpd by 2020, representing close to two-thirds of total US crude and condensate production, IHS said.

“At which point do you stop calling this unconventional?” said John Larson, a vice-president at the firm and lead author of the study, in an interview.

“This is going to become the convention.” Oil, gas and chemical lobby groups helped pay for the study but did not influence its independent, data-driven results, Larson said.

President Barack Obama cited an earlier report in the IHS series on the campaign trail and in a State of the Union address that documented 600,000 jobs created by the natural gas sector.

That natural gas employment estimate has since swelled to 900,000 jobs, Larson said, noting more data is now available about new “plays” where companies are drilling.

By 2020, IHS forecasts about 1.3 million additional jobs in unconventional oil and gas, with the sector contributing more than $416 billion to the economy.

Of the 3 million total jobs, IHS said about 20 percent would come directly from the upstream oil and gas industry, with more than 900,000 people employed by suppliers and about 1.5 million “induced” jobs from spending by workers in the sector.

With 12 million Americans unemployed and about 23 million underemployed, the growth in unconventional oil and gas jobs is helping take some slack out of the

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