- - Monday, April 1, 2013


The American shale revolution numbers are just now coming out for 2012.

According to the University of Texas at San Antonio (UTSA), the Eagle Ford shale play pumped $61 billion into the South Texas economy in 2012 and supported 116,000 jobs.Severance taxes on oil and gas production in the Eagle Ford brought in $374 million to the state of Texas’ coffers.

This is only South Texas — the area between roughly San Antonio and Corpus Christi. It does not include the new Eaglebine shale field to the east of the Eagle Ford that is just opening up or the Permian shale play to the west that is likewise on a startup, both of which should show up in the 2013 numbers this time next year. Nor does it really include booming Houston, where Exxon Mobil is building a new headquarters for 10,000 people, just as one example.

Let’s look down the road a bit. Within a decade, the UTSA’s “moderate” estimate is that the Eagle Ford alone will be adding $89 billion per year to the local economy, supporting 122,000 jobs and paying $1 billion a year to Austin in taxes. If you add the new production east and west of the Eagle Ford and the expanded refineries and the new petrochemical plants on the Gulf Coast and the revenue from the export of liquefied natural gas, we could easily be looking at a brand new trillion-dollar oil and gas economy supporting a half-million jobs inside a box from say Odessa to San Antonio to Houston to Corpus Christi.

That is just Texas and less than half the state. Consider the Marcellus gas play in West Virginia and Pennsylvania. Its gas production is up 69 percent — in one year. The Bakken oil play in North Dakota? Its production numbers are at record levels — up 40 percent from January 2012 to January 2013, and North Dakota oil is beginning to flow by train to refineries on the East Coast.This may be only the beginning. According to The New York Times, private investors have thrown $1 billion at the Utica shale gas formation in eastern Ohio. They hope to get wet gas (propane and butane), and Shell is seriously considering a multibillion-dollar petrochemical plant on the Ohio River between the Utica and Marcellus actions. There are also promising shale plays in Louisiana, Arkansas and New Mexico that may come on line later in the decade.You don’t have to be a geopolitical genius to see the implications for a United States that will have a hundred years of natural gas and will soon be the largest oil and gas producer and exporter in the world. Cheap energy, particularly natural gas, promises the United States a manufacturing renaissance for the rest of the 21st century that we could not have imagined five years ago. All of this has huge, positive implications for generations of American young people.

Here’s a snapshot of the American energy revolution in the Eagle Ford: Six big men in their late 20s — five Hispanics and one black — dressed in the blue-and-white coveralls of Noble Drilling Co. lining up at the Dairy Queen in Leal, Texas, for a midafternoon break. They are very tired because they’ve had a lot of overtime but surprisingly polite and tolerant to a stranger’s questions. Their answers to “What does all this mean to you?” sounds like the American Dream: A chance to own a home and not be a renter, a new pickup truck, clothes for their daughters and video games for their sons. After that, who knows? A bass boat maybe?

But havoc is on the horizon. President Obama is reportedly thinking of requiring all federal agencies to consider climate change before approving any major projects — not just taxpayer-funded — but anything requiring a federal license or permit. Since what affects climate change is pretty much in the eye of the beholder, an Obama executive order along these lines would have two immediate consequences. First, it would slow down every pipeline, every industrial plant, every port expansion, every refinery, every highway, every license, every permit, to the point of delaying them for years. Second, it would give the environmental activist groups standing to challenge every decision in court, bringing the entire process to a complete halt. When National Association of Manufacturers Vice President Ross Eisenberg tells Bloomberg News this prospect “has got us very freaked out,” he’s not exaggerating.

To this point, no Republican has made the American energy revolution his own. When Mr. Obama throws climate change into the mix across the board, that may happen. If the Republicans are so beaten down that they cannot respond, then the energy revolution will go forward, but it won’t be American.

William C. Triplett II is former chief Republican counsel to the Senate Foreign Relations Committee.

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