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From Scarcity to Abundance: How the Energy Boom is Transforming
America’s Economy
Presentation to the 2014 Economic Summit Federal Reserve Bank of Dallas
Bernard L. Weinstein, Ph.D.
Associate Director, Maguire Energy Institute Cox School of Business
Southern Methodist University Dallas, Texas
The opinions expressed are solely those of the presenter and do not reflect the opinions of the Federal Reserve Bank of Dallas or the
Federal Reserve System.
June 18, 2014
NEW BOOM IN THE OIL PATCH
TYPICAL FRACKING PAD SITE IN PENNSYLVANIA
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
Prod
uctio
n (b
bl/d
ay)
Country (*OPEC Member)
Top Oil Producers in 2013
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
681.4
592.3
156.5 160.5 157 107.2 114.9 102.8 81.5 71.1
0
100
200
300
400
500
600
700
800
U.S. RussianFederation
Canada Iran Qatar China Norway SaudiArabia
Algeria Indonesia
Billi
on C
ubic
Met
res
Country
Top Natural Gas Producing Countries in 2012
Source: BP Statistical Review of World Energy June 2013
Top Gas Exporting Countries, 2011
02468
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
-7%
-5%
-3%
-1%
1%
3%
5%
7%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
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
0%
2%
4%
6%
8%
10%
12%
J F M A M J J A S O N D J F M A
April ‘14: 6.3%
-500-400-300-200-100
0100200300400500
J A S O N D J F M A M J J A S O N D J F M A
Monthly change, in thousands
Source: Labor Department
April ’14: 288,000
2012 2013 2014
Nonfarm Payrolls
0%
5%
10%
15%
20%
25%
30%
35%
2012 2013 2014 2015 2016 2017 2018
Chan
ge in
Pro
duct
ion
Year
Cumulative Change in Oil Production 2012-2018
U.S.
Non-OPEC Excluding U.S.
OPEC
Source: International Energy Agency
100.0
120.0
140.0
160.0
180.0
200.0
220.019
88-0
1-01
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-
01
Thou
sand
s
Month
US Oil and Gas Jobs January 1988 through April 2013
US Oil and Gas Jobs(Thousands)
Source: Bureau of Labor Statistics
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Perc
ent
Month
Percent Change in Employment January 2008–April 2013
Total NonfarmPayroll Employees (inthousands)
Oil and GasExtraction Employees(in thousands)
-1.87%
+24.81%
13.55%
23.54%
66.08%
12.64%
19.13%
2.50%
13.07%
2.81% 5.17% 6.37%
0%
10%
20%
30%
40%
50%
60%
70%
U.S. Texas Pennsylvania Colorado Louisiana
Gro
wth
State
GDP Growth, U.S. vs. Selected Energy Producing States 2008-2012
Mining SectorReal GDP
Total Real GDP,All Industries
Source: Bureau of Economic Analysis
17.54%
30.20%
75.36%
20.24%
5.61%
-2.84%
4.70%
-1.22% -0.91%
0.53%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
U.S. Texas Pennsylvania Colorado Louisiana
Gro
wth
State
Employment Growth, U.S. vs. Selected Energy Producing States 2008-2012
Mining andLoggingEmployees
Total NonfarmEmployees, AllIndustries
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
Unem
ploy
men
t Rat
e
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!
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