Study: Fracking boom boosted incomes by $1,200 in 2012

posted at 8:41 pm on September 4, 2013 by Erika Johnsen

I mentioned yesterday that hydraulic fracturing, and the subsequent domestic oil-and-gas boom for which the innovative drilling technique has been largely responsible, has been quite the saving grace for the otherwise pretty bleak Obama economy through which the country has been traipsing for the past few years. Even the White House admitted, albeit with the necessary spin included, that the oil and gas industries were the main drivers behind their upward revision of second-quarter economic growth — and a new study out today looks to quantify further the many and widely dispersed benefits of the boom.

Be aware that it is an industry-funded report, but there’s no way to deny the general economic boon going on here:

In 2012, the energy boom supported 2.1 million jobs, added almost $75 billion in federal and state revenues, contributed $283 billion to the gross domestic product and lifted household income by more than $1,200, according to the report released today from IHS CERA. The competitive advantage for U.S. manufacturers from lower fuel prices will raise industrial production by 3.5 percent by the end of the decade, said the report from CERA, which provides business advice for energy companies.

“What really surprised me was how powerful an impact it is having to such a broad base of the economy,” John Larson, vice president of economics and public sector consulting for IHS CERA and lead author of the report, said in an interview. “It makes it to me a story that all Americans really need to come to grips with and understand.” …

Disposable income will rise as a result of lower energy prices, adding $2,700 per household in 2020 and more than $3,500 by 2025. Factors that could restrict production — an extension of fracking bans such as the one in New York state or stricter environmental regulations — would result in a rapid decline in the economic benefits, Larson said.

Given that average household incomes have only continued to shrink throughout this astonishingly slow economic ‘recovery’ we’re supposedly experiencing, I shudder to think what incomes would look like if this oil-and-gas boom weren’t going on.


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Wino on September 4, 2013 at 8:46 PM

I’ll bet if Keystone had been approved, we’d have seen a larger increase.

Wino on September 4, 2013 at 8:47 PM

I’m glad I got more than my fair share of it.

Wino on September 4, 2013 at 8:47 PM

Of course, bombing Syria would completely wipe all of this out by raising oil prices.

Wino on September 4, 2013 at 8:48 PM

And prices would be lower, still, if Libya wasn’t a cesspool of in-fighting.

Wino on September 4, 2013 at 8:49 PM

I wonder how this would work out if Egypt was still producing at the same level, too.

Wino on September 4, 2013 at 8:49 PM

Pretty much, not only did not a single Obama policy contribute to it, I can’t think of a single O’policy that didn’t in fact HARM the price of oil.

Wino on September 4, 2013 at 8:50 PM

I guess since energy prices are down due to this, we should shut down some more coal-fired power plants.

/O’policy expert

Wino on September 4, 2013 at 8:51 PM

No wonder the libs are against it.

hepcat on September 4, 2013 at 8:52 PM

the innovative drilling technique

I call BS. The well is fracked after it’s drilled. Fracking is older than me and I’m 58.

Fred

jrsrigmvr on September 4, 2013 at 8:52 PM

I just realized that with the Consolidated Affordable Care Act, that fewer driving hours are also contributing to less gas use, and therefore more household income.

So, working fewer hours actually increases your take home pay.

/next media water carrying analysis

Wino on September 4, 2013 at 8:53 PM

No wonder the libs are against it.

hepcat on September 4, 2013 at 8:52 PM

Thank you, hepcat. I was running out of steam.

Wino on September 4, 2013 at 8:54 PM

I re-watched ‘There Will Be Blood’ last night. Reminded me of what is going on now with fracking – in a good way. This is what a free market and innovation looks like. No one can do this stuff like the US, as long as Leftists stay out of our damn way.

WhatSlushfund on September 4, 2013 at 9:54 PM

The fracking boom, and the increase in personal wealth due to savings in power costs ($1200) was a major factor in Obama’s re-election.

Irony never sleeps.

str8tface on September 4, 2013 at 10:18 PM

Fracking has been a God send to the people in the northern tier of Pennsylvania, particularly Susquehanna, Wayne, Pike and Bradford counties. Sadly the visionaries of a wonderful green world where unicorns play and “green energy” that does not exist will save the planet. No fracking allowed there, but you can get government grants to start up another Green venture that is bound to be as successful as Solyndra. Luddites rule the “progressive” universe.

simkeith on September 4, 2013 at 11:06 PM

Wino on September 4, 2013 at 8:47 PM

Well that is only going to create … what 5 or 10 permanent jobs… that is a not job plan according to Mr Obambam.

watertown on September 5, 2013 at 7:38 AM

Imagine if all 57 states could mine,drill, frack or otherwise utilize their natural resources to their full capacity.

jaywemm on September 5, 2013 at 1:30 PM