WHILE the boom-time frenzy has ebbed, most of the oil and gas shale plays in North America are still busy places. There is still plenty of work for the tank truck fleets that are supporting oilfield drilling and production operations.
All it takes is a daytrip to the oilfield—which is easy if you live in Texas as I do—to see how many tank transports of all types are on the road serving the oilfield sector. Tank trucks are just a part of the oilfield traffic that fills the roads and highways throughout the oil and gas shale regions.
The most recent economic numbers show that oilfield haulers have plenty of reason for optimism during 2014. A new study by IHS estimates that oil and gas midstream and downstream companies will spend $85 to $90 billion in direct capital investment for oil and gas infrastructure during 2014. The IHS forecast of oil and gas infrastructure investment over the next 12 years (2014-2025) estimates a cumulative spending of $890 billion in the base case and $1.15 trillion on the high side.
The United States is now the global growth leader in crude oil production capacity growth, having added nearly 1.2 million barrels per day of capacity over the 2008-2012 timeframe, according to the IHS report. In addition, the United States is now the world’s largest natural gas producer, at 65 billion cubic feet per day. Natural gas liquids output grew, with producers adding more than 500,000 barrels of oil equivalent per day since 2008.
The impact of these developments is being felt worldwide. The United States has become a major exporter of refined fuels to Europe, crude oil imports have fallen significantly. Countries affected by the US cutback in crude imports include Nigeria, Saudi Arabia, and Venezuela.
In addition to refined fuels, the US producers are ramping up exports of liquefied natural gas. The US oil industry also has requested federal approval to export crude oil, but—not surprisingly—the Obama Administration continues to play obstructionist.
Closer to home, the oil and gas shale revolution was a godsend to the US economy. Oil and gas shale activity alone supports more than 1.7 million jobs and that will grow to 3 million by the end of the decade, according to an IHS study released last year. Many of those are truck drivers, mechanics, and other truck fleet personnel.
Unconventional oil and gas activity increased disposable income by an average of $1,200 per US household in 2012 as savings from lower energy costs were passed along to consumers in the form of lower energy bills, as well as lower costs for all other goods and services. That figure is expected to grow to just over $2,000 in 2015 and reach more than $3,500 per consumer per year by 2025.
Producers of energy-related chemicals and other industries that are energy-intensive benefitted from the shale oil and gas. Lower feedstock and energy costs encouraged some US companies to bring manufacturing operations back to the United States and benefitted US exports.
Other findings in the IHS report include:
• The entire unconventional oil and gas value chain and energy-related chemicals will contribute nearly $533 billion annually to US gross domestic product by 2015.
• The full value chain of industrial activity and employment associated with unconventional oil and natural gas contributed more than $74 billion in federal and state government revenues in 2012, and tax receipts should rise to at least $125 billion by 2020.
• Workers’ earnings from all unconventional energy and chemicals activity were nearly $150 billion in 2012. The total is expected to rise to $207 billion by 2015.
• Energy-related chemicals (currently supporting more than 53,000 jobs) will support upwards of 277,000 jobs by the end of the decade.
How long will the oil and gas shale revolution last? It’s hard to say for sure, but we’re not going to run out anytime soon despite the constant fear mongering from the enviro-nuts on the left.
There is a lot of oil and gas underground—more than we will need in several lifetimes. Further, oil and gas producers are using the modern technologies to rejuvenate old fields, such as the Tea Pot Dome in Wyoming.
In addition, a new energy revolution took place in December 2013 when Mexico’s elected officials changed that country’s laws to allow foreign companies to participate in Mexico’s oil and gas industry. This was a big development because there are oil and gas shale formations right along the US-Mexico border.
All we can say is let the good times keep rolling for the oilfield haulers. ♦