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 Business
Southern Methodist University
Dallas, Texas
May 14, 2014
NEW BOOM IN THE OIL PATCH
TYPICAL FRACKING PAD SITE IN PENNSYLVANIA
Top Oil Producers in 2013
18,000,000
Production (bbl/day)
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
Country (*OPEC Member)
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
Top Natural Gas Producing Countries
in 2012
800
700
681.4
592.3
Billion Cubic Metres
600
500
400
300
200
156.5
160.5
157
107.2
114.9
102.8
81.5
71.1
China
Norway
Saudi
Arabia
Algeria
Indonesia
100
0
U.S.
Russian
Federation
Canada
Iran
Qatar
Country
Source: BP Statistical Review of World Energy June 2013
Top Gas Exporting Countries, 2011
20
18
16
14
12
Bcfd 10
8
6
4
2
0
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
1Q 2014:
0.1%
Real Economic Growth
Gross domestic product
7%
5%
3%
1%
-1%
-3%
-5%
-7%
2Q 3Q 4Q
2010
1Q 2Q 3Q 4Q
2011
Source: Commerce Department
1Q 2Q 3Q 4Q
2012
1Q 2Q 3Q 4Q
2013
1Q
2014
U. S. Jobless Rate
In percent, seasonally adjusted:
April ‘14:
6.3%
12%
10%
8%
6%
4%
2%
0%
J
F
M
A
M
J
J
2013
Source: U.S. Department of Labor
A
S
O
N
D
J
F
2014
M
A
Nonfarm Payrolls
April ’14:
288,000
Monthly change, in thousands
500
400
300
200
100
0
-100
-200
-300
-400
-500
J A S O N D J F M A M J
2012
Source: Labor Department
J A S O N D J F M A
2013
2014
Cumulative Change in Oil Production
2012-2018
35%
30%
Change in Production
25%
20%
U.S.
15%
Non-OPEC Excluding U.S.
OPEC
10%
5%
0%
2012
2013
2014
Source: International Energy Agency
2015
2016
Year
2017
2018
Source: Bureau of Labor Statistics
Month
2013-01-01
2012-01-01
2011-01-01
2010-01-01
2009-01-01
2008-01-01
2007-01-01
2006-01-01
2005-01-01
2004-01-01
2003-01-01
2002-01-01
2001-01-01
2000-01-01
1999-01-01
1998-01-01
1997-01-01
1996-01-01
1995-01-01
1994-01-01
1993-01-01
1992-01-01
1991-01-01
1990-01-01
1989-01-01
1988-01-01
Thousands
US Oil and Gas Jobs
January 1988 through April 2013
220.0
200.0
180.0
160.0
US Oil and Gas Jobs
(Thousands)
140.0
120.0
100.0
Percent Change in Employment
January 2008–April 2013
30%
+24.81%
25%
20%
Total Nonfarm
Payroll Employees (in
thousands)
Percent
15%
10%
Oil and Gas
Extraction Employees
(in thousands)
5%
0%
-1.87%
-5%
-10%
Month
GDP Growth, U.S. vs. Selected Energy Producing States
2008-2012
70%
66.08%
60%
Growth
50%
Mining Sector
Real GDP
40%
30%
Total Real GDP,
All Industries
23.54%
19.13%
20%
13.55%
13.07%
12.64%
10%
2.81%
2.50%
5.17%
6.37%
0%
U.S.
Source: Bureau of Economic Analysis
Texas
Pennsylvania
State
Colorado
Louisiana
Employment Growth, U.S. vs. Selected Energy Producing States
2008-2012
80.00%
75.36%
70.00%
60.00%
Growth
50.00%
Mining and
Logging
Employees
40.00%
30.20%
30.00%
20.00%
20.24%
17.54%
10.00%
Total Nonfarm
Employees, All
Industries
5.61%
4.70%
0.53%
0.00%
-1.22%
-2.84%
-0.91%
-10.00%
U.S.
Source: Bureau of Labor Statistics
Texas
Pennsylvania
State
Colorado
Louisiana
Texas
Florida
California
New York
Arizona
Washington
Utah
Virginia
North Carolina
Colorado
Nevada
Oklahoma
North Dakota
Maryland
Minnesota
DC
Oregon
Georgia
Idaho
Nebraska
South Carolina
Hawaii
Montana
Iowa
New Mexico
Tennessee
Wyoming
Alaska
Pennsylvania
South Dakota
Louisiana
Kansas
Arkansas
West Virginia
Massachusetts
New Hampshire
Wisconsin
Missouri
Delaware
Vermont
Kentucky
-600
-400
-200
Job Gains and Losses
by State:
Dec. 2000 – Mar. 2014
Texas added 36.4% of the jobs in the
U.S. during this 13+ year period.
Maine
Rhode Island
Indiana
Alabama
Mississippi
Connecticut
New Jersey
Illinois
Ohio
Michigan
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
110 Years of Oil and Gas Production in Texas
Total statewide jobs
provided or supported
by the oil and gas
industry
Monthly Crude Oil Production and Unemployment Rate in Texas and California
2000-2013
80000
14%
70000
12%
60000
10%
Thousand Barrels
8%
40000
6%
30000
4%
20000
10000
2%
0
0%
Year
Sources: Energy Information Administration and
Bureau of Labor Statistics
California Crude Production
Texas Crude Production
California Unemployment Rate
Texas Unemployment Rate
Unemployment Rate
50000
THE “PETROSTATE” OF AMERICA
WE’RE NUMBER 1!