Report: Shale Oil Could Add $2.7 Trillion to Global Economy
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Fuel Fix reports that a new 1,000-acre rail yard project is underway in Texas’ Eagle Ford Shale region to accomodate the transportation of oil, gas, and hydraulic fracturing materials:
The Houston-based Frac Resources and La Porte-based Frontier Logistics partnered on the project, with an estimated $12 million to $15 million investment in the first phase of the rail park.
Kyle Kinsel of Frac Resources said the company initially was looking for property for itself.
“It’s too much property for us so we got into the development business,” Kinsel said. “It’s an enormous size for a rail development.”
Frac Resources will likely carve out 50 acres for its own terminal to move 40,000 tons of sand a month. Frontier Logistics, which has expertise in warehousing and moving cargo, will manage the site’s operations.
Kinsel said the target customers include companies that need to move lumber, ethanol, corn syrup or sand — basically any commodity that can move by rail. It also will market to pipeline and storage companies that need to move or store crude oil or natural gas.
This is another example of the increased economic activity generated by shale energy development. Its prospects for continued economic growth look good. American Enterprise Institute economist, Mark Perry links to a report from the consulting firm PricewaterhouseCoopers that sees a bright future for shale energy both in the United States and globally. The additional oil production from shale could add 2.3%-3.7% to the global economy by 2035—as much as $2.7 trillion in today’s dollars.
Here are some highlights from the report:
- “Shale oil production has been accelerating in US, growing from 111,000 barrels per day in 2004 to 553,000 barrels per day in 2011 (equivalent to a growth rate of around 26% per year). As a result, US oil imports are forecast this year to fall to their lowest levels for over 25 years.”
- “Shale oil could make the largest single contribution to total US oil production growth by 2020, with the proportion of production from conventional sources remaining relatively stable.”
- “Our analysis suggests that global shale oil production has the potential to reach up to 14 million barrels of oil per day by 2035; this amounts to 12% of the world’s total oil supply.”
- They “estimate that shale oil could displace around 35-40%” of oil imported by oil tanker to the United States.
The authors of the report conclude, “[S]hale oil has the potential to reshape the global economy, increasing energy security, independence and affordability in the long term…. The potential magnitude of the impact of shale oil makes it a profound force for change in energy markets and the wider global economy.”