from scarcity to abundance: how the energy boom is transforming america’s economy presentation to...
TRANSCRIPT
From Scarcity to Abundance: How the Energy Boom is Transforming America’s Economy
Presentation to Cincinnati Economics Organization
Bernard L. Weinstein, Ph.D.Associate Director, Maguire Energy Institute
Cox School of BusinessSouthern Methodist University
Dallas, Texas
May 14, 2014
NEW BOOM IN THE OIL PATCH
TYPICAL FRACKING PAD SITE IN PENNSYLVANIA
North
America
Russia
Saudi
Arabia*
United
Stat
esIra
n*Chin
a
Canad
aIra
q*
United
Arab
Emira
tes*
Mex
ico
Kuwait
*0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Top Oil Producers in 2013
Country (*OPEC Member)
Pro
du
ctio
n (
bb
l/day
)
Source: International Energy Agency
LUXURY HOUSING IN THE BAKKEN: $2500 PER MONTH
MACONDO EXPLOSION AND OIL SPILL
Offshore Potentially Recoverable Federal Oil and Natural Gas Resources
U.S. Russian Federation
Canada Iran Qatar China Norway Saudi Arabia
Algeria Indonesia0
100
200
300
400
500
600
700
800
681.4
592.3
156.5 160.5 157107.2 114.9 102.8 81.5 71.1
Top Natural Gas Producing Countriesin 2012
Country
Billi
on C
ubic
Met
res
Source: BP Statistical Review of World Energy June 2013
Top Gas Exporting Countries, 2011
Russia
Qatar
Norway
Canad
a
Algeria
Other A
frica
Indonesia
Netherla
nds
Australi
a
Trinidad
& Tobag
o02468
101214161820
Bcfd
Source: Deloitte, Exporting the American Renaissance; Global Impacts of LNG Exports from the united States, Jan. 2013
Cove Point, Maryland LNG Facility to Export Marcellus Gas
PROTESTING COVE POINT
CURRENT LEGISLATIVE AND REGULATORY RESTRICTIONS ON ENERGY INVESTMENT
• Keystone XL pipeline• Restrictions on oil and natural gas exports• Limitations on drilling offshore and on federal
lands• Renewal fuels standard (ethanol mandate)• Cross-state air pollution rule and utility MACT• EPA greenhouse gas limits for power plants• Proposed fracking regulations from EPA and DOI
Gross domestic product
Source: Commerce Department
Real Economic Growth
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q-7%
-5%
-3%
-1%
1%
3%
5%
2010 2011 2012 2013 2014
1Q 2014:0.1%
In percent, seasonally adjusted:
Source: U.S. Department of Labor
2013 2014
U. S. Jobless Rate
J F M A M J J A S O N D J F M A0%
2%
4%
6%
8%
10%
12%April ‘14:
6.3%
J A S O N D J F M A M J J A S O N D J F M A-500
-400
-300
-200
-100
0
100
200
300
400
500
Monthly change, in thousands
Source: Labor Department
April ’14:288,000
2012 2013 2014
Nonfarm Payrolls
2012 2013 2014 2015 2016 2017 20180%
5%
10%
15%
20%
25%
30%
35%
Cumulative Change in Oil Production 2012-2018
U.S.Non-OPEC Excluding U.S.OPEC
Year
Chan
ge in
Pro
ducti
on
Source: International Energy Agency
1988-01-01
1989-01-01
1990-01-01
1991-01-01
1992-01-01
1993-01-01
1994-01-01
1995-01-01
1996-01-01
1997-01-01
1998-01-01
1999-01-01
2000-01-01
2001-01-01
2002-01-01
2003-01-01
2004-01-01
2005-01-01
2006-01-01
2007-01-01
2008-01-01
2009-01-01
2010-01-01
2011-01-01
2012-01-01
2013-01-01100.0
120.0
140.0
160.0
180.0
200.0
220.0
US Oil and Gas Jobs January 1988 through April 2013
US Oil and Gas Jobs (Thousands)
Month
Thou
sand
s
Source: Bureau of Labor Statistics
Jan-2008
Jul-2008
Jan-2009
Jul-2009
Jan-2010
Jul-2010
Jan-2011
Jul-2011
Jan-2012
Jul-2012
Jan-2013-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Percent Change in Employment January 2008–April 2013
Total Nonfarm Payroll Employees (in thousands)
Oil and Gas Extrac-tion Employees (in thousands)
Month
Perc
ent
-1.87%
+24.81%
U.S. Texas Pennsylvania Colorado Louisiana0%
10%
20%
30%
40%
50%
60%
70%
13.55%
23.54%
66.08%
12.64%
19.13%
2.50%
13.07%
2.81%5.17% 6.37%
GDP Growth, U.S. vs. Selected Energy Producing States2008-2012
Mining Sector Real GDP
Total Real GDP, All Industries
State
Gro
wth
Source: Bureau of Economic Analysis
U.S. Texas Pennsylvania Colorado Louisiana-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
17.54%
30.20%
75.36%
20.24%
5.61%
-2.84%
4.70%
-1.22% -0.91%
0.53%
Employment Growth, U.S. vs. Selected Energy Producing States2008-2012
Mining and Logging Em-ployeesTotal Nonfarm Employees, All Industries
State
Gro
wth
Source: Bureau of Labor Statistics
-600 -400 -200 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
KentuckyVermont
DelawareMissouri
WisconsinNew HampshireMassachusetts
West VirginiaArkansas
KansasLouisiana
South DakotaPennsylvania
AlaskaWyoming
TennesseeNew Mexico
IowaMontana
HawaiiSouth Carolina
NebraskaIdaho
GeorgiaOregon
D C Minnesota
MarylandNorth Dakota
OklahomaNevada
ColoradoNorth Carolina
VirginiaUtah
WashingtonArizona
New YorkCalifornia
FloridaTexas
Job Gains and Losses by State:
Dec. 2000 – Mar. 2014
MaineRhode IslandIndiana
New JerseyConnecticut
AlabamaMississippi
IllinoisOhioMichigan
Texas added 36.4% of the jobs in the U.S. during this 13+ year period.
110 Years of Oil and Gas Production in Texas
Total statewide jobs provided or supported by the oil and gas industry
0%
2%
4%
6%
8%
10%
12%
14%
0
10000
20000
30000
40000
50000
60000
70000
80000
Une
mpl
oym
ent R
ate
Thou
sand
Bar
rels
Year
Monthly Crude Oil Production and Unemployment Rate in Texas and California 2000-2013
California Crude Production
Texas Crude Production
California Unemployment Rate
Texas Unemployment Rate
Sources: Energy Information Administration and Bureau of Labor Statistics
THE “PETROSTATE” OF AMERICA
WE’RE NUMBER 1!