One of the recurring themes at conferences in the last year has been the shale gas revolution, and in particular, its larger global impact. The revolution in oil and gas –known as “fracking”—has led the International Energy Agency to estimate the U.S. will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015.  This has enormous global economic and strategic impact.

This week we present three articles that address different aspects of the shale gas revolution.  The first article summarizes a recent report by the International Energy Agency and some basic facts surrounding the shale gas revolution.  The second article, by Daniel Yergin, an expert on global energy, discusses the global impact of surging U.S. oil and gas production.  The third article by McKinsey & Company, the global consulting firm, discusses both the exciting potential for the technology as well as environmental concerns.

U.S. to Be Top Oil Producer by 2015.  “The U.S. will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy self-sufficiency in the next two decades amid booming output from shale formations….soaring shale output in the U.S. is helping the world’s largest oil consumer achieve its highest level of energy independence in two decades.”

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The Global Impact of U.S. Shale.  “The biggest innovation in energy so far this century has been the development of shale gas and the associated resource known as ‘tight oil’…the rise of U.S. shale energy is also having a broader global economic impact:  American shale gas is changing the balance of competitiveness in the world economy, giving the US an unanticipated advantage.  Indeed, inexpensive natural gas is fueling a US manufacturing renaissance, as companies build new plants and expand existing facilities.”

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 The US Growth Opportunity in Shale Oil & Gas.  “Throughout my whole lifetime, we’ve considered that we’re going to be net importers of energy…

[Now] we can even envision a world where the US could be net exporters of energy by 2020.  It’s a significant shift in the way we think about energy security, and the way we think about the impact of energy prices on our economy…fully capturing the opportunity will require an enormous capital investment…this capital investment on its own will create a temporary set of jobs—some 1.6 million jobs—just to build out the infrastructure….  This, on its own, will be an enormous surge to the economy…This [shale gas technology] is an exciting game changer for the US economy.  It will increase the overall GDP of the country, which will increase the overall wealth and well-being of many of its citizens.” (Registration required)

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And in case you missed it, click here to read last week’s blog post which focuses on the waves of the market volatility.

We hope you enjoy reading these articles along with us and that you find them informative.  Please forward this to your friends and family.

J. Mark Nickell & Co.

Disclosure – The articles mentioned in This Week with J. Mark Nickell & Co. are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the J. Mark Nickell & Co. website. The opinions expressed in these articles are the opinions of the author and not J. Mark Nickell & Co. This is not an offer to buy or sell any security.  J. Mark Nickell & Co. is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.