Report: Shale oil production to lower trade deficit, boost employment

U.S. oil production from sources such as shale has risen from 100,000 barrels a day in 2003 to 2 million barrels a day this year, thanks to formations such as the Niobrara, according to an analyst's report released Tuesday.

"Unconventional" oil production, the sort seen in the Niobrara shale formation, has offset declining production elsewhere in the country, Englewood-based IHS said.

That production has led to a gain of 1.2 million barrels per day nationwide between just 2008 and 2012.

Strong growth in "tight oil production" is expected to continue, according to the report. The analyst forecasts production of nearly 4.5 million barrels a day by the end of the decade.

Net oil imports could reach $319 billion this year, or 45 percent of the country's estimated trade deficit of $695 billion. Oil imports would have cost the nation $70 billion more without the 1.7 million barrel-per-day increase in shale oil production capacity.

"Continuing increases in domestic oil production will also result in a significantly
lower trade deficit than would otherwise be the case," the report said.

The sector also will support more than 1.7 million jobs this year at average wage levels higher than the general economy. The number of jobs is expected to increase to 2.5 million during the next three years.

That number could reach almost 3.5 million in 2035, according to the report.

The study's other findings:

• Nearly $5.1 trillion in capital expenditures — $2.1 trillion in the oil sector and $3 trillion in the natural-gas sector — will take place between 2012 and 2035 across the entire upstream unconventional oil and gas activity sectors.
• Unconventional oil and gas activity will generate more than $61 billion in federal and state government revenues in 2012. It will surge to $91 billion in 2015 and $111 billion in 2020. By 2035, government revenues will increase to more than $124 billion.
• Unconventional oil and gas workers are paid an average of $35.15 per hour, higher than the $23.07 per hour in wages in the general economy and more than wages paid in manufacturing, wholesale trade and education, among others.