The fracking boom has progressed at breakneck speed across the U.S., with roughly one in 20 Americans now living within a mile of a well drilled since 2000.
So, how much has the economy benefitted from this drilling surge?
Not much, according to a report presented to the European Union Parliament last month, which found “no evidence that shale gas is driving an overall manufacturing renaissance in the US.”
The shale boom’s economic contributions are very narrow, inflating local economies in places where drilling is intense but generating little impact on the country’s overall economic growth, the Institute for Sustainable Development and International Relations, a French think tank, concluded.
Although natural gas prices have fallen from their highs in 2008, benefitting consumers, those low levels are unlikely to be sustained and the U.S. is still expected to remain heavily reliant on importing crude oil, the researchers found.
Even using very optimistic assumptions, the report said, the industry’s cumulative long term effect on America’s Gross Domestic Product (GDP) will be less than one percent. “Despite very low and ultimately unsustainable short-term prices of natural gas, the unconventional oil and gas revolution has had a minimal impact on the US macro-economy,”
That’s not the amount that shale gas will add to the economy each year, the researchers said. Instead, the industry will make up no more than 0.84 percent of total GDP between 2012 and 2035 – the years when the shale boom is projected to be at its height. To put that in context, the personal care products industry – hair styling, cosmetics and the like – contributed 1.4 percent of GDP in 2010 – nearly double the impact that the EU report found the shale gas rush could have.