On top of recent articles at The New American about huge oil deposits in the United States, now comes Ed Morse, writing in the Wall Street Journal that those rosy estimates of growth and prosperity were far too conservative: “North America is becoming the new Middle East.”
Morse, an economist with international bank Citi, estimates that total North American production (including Canada, the United States, and Mexico) will increase from current levels of 15 million barrels a day (BBD) to more than 26 million BBD in less than eight years. The combination of new technology (fracing and horizontal drilling) in shale formations and in deepwater formations will push North American production so fast that OPEC won’t be able to keep up. Coupled with estimates of declining demand for refined oil products in response to more efficient automobiles and higher gasoline prices, makes the economic consequences “potentially extraordinary,” according to Morse.
At least two consequences are apparent: more jobs and higher economic output, or GDP. Morse estimates that three million jobs will be created as the fields are developed, some 550,000 of them directly related and another two-plus million in backup and support industries — the so-called “ripple effect.” Such increased economic activity could also add between two and three percent to the nation's GDP.
Perhaps the biggest consequence can’t be measured in numbers: the now increasing likelihood of energy independence for the first time since 1949 when the United States started importing more refined oil than it produced.
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