A new global energy report from Bank of America/Merrill Lynch estimates that the economic benefits to the U.S. economy from booming domestic energy production, especially from the surging output of unconventional shale gas and oil, are approaching $1 billion per day.
To calculate the economic benefits that are being generated from America’s vast energy resources, Merrill-Lynch introduces the concept of “energy carry” in its report, defined as an estimate of the daily dollar value of the improvement in our energy balances, including “the natural gas advantage of the U.S. economy relative to Europe or East Asia, the growing revenues from increased exports of fuels, and the reduced crude oil import bill.”
By that measure, America’s “energy carry” was $900 million per day in April, and the energy benefits to the economy will reach $1 billion per day by the end of the year. Merrill Lynch estimates that the daily “energy carry” in January 2010 was only $70 million per day, so the daily economic benefits of energy to the U.S. economy increased dramatically by a factor of more than 12 times in just a little over two years.
The biggest economic benefit from domestic energy production is coming from the growing abundance of America’s cheap shale gas ($3.10 per million BTUs), which is now saving U.S. companies and consumers $566 million per day compared to the $11.64 global average price. The economic benefits from our growing domestic energy supplies are becoming so significant that they now represent about 2.2% of America’s $15.5 trillion of GDP, according to Merrill-Lynch, and that huge boost to the nation’ economy might be enough to keep the U.S. from falling into another recession.
The Merrill Lynch report helps put some new perspective on just how important America’s energy sector is to the U.S. economy. Thanks to the increased production of shale oil and gas in recent years, America’s energy industry is now delivering a $1 billion stimulus to the U.S. economy every day, and providing thousands of new shovel-ready jobs, generating state and federal tax revenues, and moving us ever-closer to energy self-sufficiency. And it’s important to recognize that most of the increased development of shale oil and gas that is now generating a $1 billion daily energy stimulus is taking place on private land, and is happening without any taxpayer credits, support, subsidies, grants or loans.