The U.S. oil and natural-gas rush is hacking away at unemployment, manufacturing a total of 1.7 million jobs this year, according to a study released Tuesday by economic forecaster IHS Global Insight. That number will spike to 2.5 million by 2015, and to almost 3.5 million by 2035, creating “high-quality and high-paying” work at wages on average of about $35 an hour — “dramatically higher” than the average $23 an hour for other jobs in the U.S. economy.
Due to the stale U.S. labor market, many Americans who’ve found jobs related to drilling would otherwise be unemployed, asserted John Larson, a vice president at IHS and the study’s chief author. “We look at this in the near term, and we believe that many of these jobs really are net new jobs because these individuals would not be able to find employment elsewhere,” Larson affirmed on a conference call. “These jobs tend to be higher paying.”
The IHS report analyzes so-called “unconventional” oil and gas resources — including shale oil and gas, which is freed by hydraulic fracturing, or “fracking” — and how its growth is impacting the American economy. This capital-intensive industry relies heavily on suppliers in construction and heavy equipment, but it also demands a vast range of material and services such as information technology and legal and financial services. About 80 percent of the jobs will be grounded on rigs or at firms supplying drillers, such as pipe manufacturers, while the rest will be “induced” jobs in other businesses, such as shops, restaurants, and hotels.
Unconventional oil accounts for about two million barrels per day of U.S. production this year, IHS reported, and is projected to spike a staggering 70 percent by 2015, to more than 3.5 million barrels per day; by 2020, production is expected to double to 4.4 million barrels per day.
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Photo: Oil pumps. Oil industry equipment via Shutterstock