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America’s energy industry continues to be one of the strongest engines of growth for the U.S. economy, thanks to the advanced drilling technologies that have given energy companies access to oil- and gas-saturated shale rock formations from Texas to North Dakota to Pennsylvania. The news coming from the U.S. oil and gas industry continues to be incredibly positive and provides one of the best reasons to be optimistic about the future of America’s economy. The ongoing investments in domestic energy production, along with investments in steel, chemical and plastic plants to take advantage of America’s abundant shale gas will provide a powerful economic stimulus to the U.S. economy and will continue to create thousands, and maybe millions, of shovel-ready jobs.
Here are some recent energy updates:
1. The Energy Information Administration just released updated domestic oil production statistics. The chart above shows that the meteoric growth in Texas oil production continued in October, surpassing two million barrels per day for the third straight month, and reaching the highest level of output since April of 1987, more than 25 years ago. Compared to a year ago, oil production in October increased 32%, and the Lone Star State’s oil output had doubled in the last three years from just over one million barrels per day in the summer of 2009 to 2.1 million barrels per day in October.
2. The EIA also just re-posted this amazing animation of the cumulative natural gas well drills in the state of Pennsylvania from January 2005 to April 2012 (the black diamonds are conventional vertical wells and the red diamonds are horizontal wells) and it notes that “Between 2009 and 2011, Pennsylvania’s natural gas production more than quadrupled due to expanded horizontal drilling combined with hydraulic fracturing.”
MP: Thanks to the plentiful, abundant and cheap natural gas from all of the hydraulic fracturing of shale rock formations in places like Pennsylvania, we’re seeing a resurgence in energy-intensive manufacturing in the U.S., with billions of dollars in new investments in projects involving the production of chemicals, steel, plastics, etc., here are a few examples:
3. BLOOMBERG — “The U.S. shale-gas revolution, which has revitalized chemicals companies and prompted talk of domestic energy self-sufficiency, is attracting a wave of investment that may revive profits in the steel industry. Austrian steelmaker Voestalpine AG (VOE) said Dec. 19 it may construct a 500 million-euro ($661 million) factory in the U.S. to benefit from cheap gas. Nucor Corp. (NUE), the most valuable U.S. steelmaker, plans to start up a $750 million Louisiana project in mid-2013. They’re among at least five U.S. plants under consideration or being built that would use gas instead of coal to purify iron ore, the main ingredient in steel.
“There’s also been a reversal of fortune for U.S. chemical producers after years of decline. Shares of LyondellBasell Industries NV have more than doubled since it emerged from bankruptcy in 2010. The company is now among chemical producers planning billions of dollars of plants around the Gulf of Mexico to capitalize on cheaper gas. Fertilizer companies including CF Industries Holdings Inc. also are planning to construct gas- fueled plants.”
4. PLASTIC NEWS — “The United States will have plenty of natural gas to both convert to chemicals and plastics as well as to export as liquefied natural gas, according to officials with the American Chemistry Council (ACC).
“The United States has gone from being the highest cost major gas producer four to five years ago to the current lowest cost producer,” said ACC President and CEO Cal Dooley, who said extensive shale gas deposits have flipped the cost equation.
Chemical and related industries have announced $45 billion in projects over the next several years. ACC officials expect most initial investment will be in established chemical and resin production areas in Texas and Louisiana.”
MP: America’s economic future looks a lot brighter thanks to the energy revolution that started just a few years ago because of the advanced drilling technologies of hydraulic fracturing and horizontal drilling, which have doubled production of oil in Texas in just three years, and “flipped the cost equation” for energy-intensive manufacturing.
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