Rapidly changing domestic energy strategy has left states and local communities in a position to reap considerable benefits from shale gas development. Peter Staas of The Energy Strategist outlines how Shale Oil and Gas is Energizing the US Economy.
The shale oil and gas revolution has resulted in an oversupply of natural gas that in recent years has kept the price of this commodity hovering near record lows. Depressed prices for natural gas add up to lower utility bills for many US consumers at a time when households are focused on making every penny count.
Local economies also continue to benefit from the feverish activity in emerging shale oil and gas plays. For example, North Dakota’s economy has boomed in recent years thanks to the Bakken Shale, while labor shortages in the Permian Basin, Eagle Ford Shale and Marcellus Shale should provide plenty of employment opportunities in these regions. In fact, the Pennsylvania Center for Workforce Information and Analysis recently estimated that the number of people employed by the mining and timber industries increased 17.4 percent from year-ago levels in November 2011, largely because of the Marcellus Shale. As you can see in this graph, employment in the mining and timber industries has surged in Pennsylvania. Meanwhile, overall employment in Pennsylvania is up 0.9 percent from a year ago.
Local financial institutions also reap the benefit of increased economic activity, a trend we first highlighted in Energizing Local Economies The two stocks we highlighted in that article have outperformed dramatically: shares of Texas Capital Bancshares (NSDQ: TCBI) has returned 82 percent, while Pennsylvania-based FNB Corp (NYSE: FNB) has returned 63 percent. Meanwhile, the KBW Regional Bank Index posted a total return of only 3.3 percent over the same period.
Watch Dr. Daniel Fine discuss North Carolina energy policy and fracking in a video of JLF’s Shaftesbury Society presentation.