Taking Advantage of the Fracturing Boom

“Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy source.” 
 – President Richard Nixon (November 7, 1973) 

Guest Contributor
Mark Denzler, Vice President & COO
Illinois Manufacturers' Association

Four decades ago, President Richard Nixon introduced “Project Independence” to the American people only weeks after the Arab oil embargo threatened the United States with the long-term possibility of high oil prices, a disrupted energy supply, and a potential recession. The price of gasoline jumped from 38.5 cents per gallon to more than 55.1 cents within a span of five months and politicians called for a gas-rationing program. Ninety percent of gas station owners complied with the President’s request not to sell fuel at certain times on weekends and the state of Oregon implemented a ban on Christmas and commercial lights. The nearly five-month embargo had a profound impact on the nation and lit the fuse to develop home grown energy.

Unfortunately, making America energy independent has proven more elusive than landing a man on the moon. Since President Nixon first advocated energy independence forty years ago, every single president has echoed that mantra beginning with President Gerald Ford who “recommended a plan to make us invulnerable to cutoffs of foreign oil” all the way through to President Barack Obama who indicated that “now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our destiny.” While innovation and new developments arose in every decade, it is the advent of high volume hydraulic fracturing that has led the International Energy Agency to report that the United States is poised to overtake Saudi Arabia as the leading oil producer in the world by 2017 and surpass Russia as the leading producer of natural gas in 2015.

There is no mistake that the perfection of high volume hydraulic fracturing is a paradigm-shifter that can influence not only the United States economy but also the world’s geopolitical structure. Hydraulic fracturing and domestically produced natural gas are leading the manufacturing renaissance occurring throughout the United States.

Illinois is poised to become a larger pillar of our nation’s energy production because geologic studies indicate the presence of shale gas in the New Albany Shale located in the southeast corner of the state. Tremendous opportunities exist because energy companies risked billions of dollars in research and development to discover how to unlock our vast domestic energy resources. According to economic studies, hydraulic fracturing in Illinois could potentially add tens of thousands of good, high-paying jobs in manufacturing, mining, transportation, engineering and construction with an economic impact totaling billions of dollars if Governor Patrick Quinn and the General Assembly create a strong regulatory framework allowing the industry to flourish while protecting the environment.

We can look at other states that have been using this innovative and safe technology to see what may lie ahead. North Dakota, which has seen its oil production skyrocket from 7.5 million barrels in 2009 to 16.9 million barrels in 2012, sits on a budget surplus of $2 billion and is contemplating a two-year elimination of the income tax in large part because of the massive energy boom in the Bakken region. In Pennsylvania, Royal Dutch Shell just announced plans to build a $2 billion petrochemical plant creating 10,000 construction jobs because of the proximity to natural gas production. Previously shuttered steel manufacturers are opening their doors again in Ohio and hiring hundreds of workers while more than $60 million in new manufacturing investments have been announced in Louisiana. Similar stories are occurring across the country in state after state like Colorado, Texas, California, and Oklahoma.

Research shows that this new domestic energy production is not a bubble and won’t disappear overnight. The United States Energy Information Agency predicts that we have 272.5 trillion cubic feet of proven reserves of natural gas and 4.2 trillion cubic feet that is currently recoverable – given today’s consumption, there is enough natural gas in North America to last the United States for over 175 years. Our recoverable oil reserve of 1.4 trillion barrels is five times greater than reserves in Saudi Arabia. 

Illinois needs to utilize hydraulic fracturing to grow and expand our energy portfolio that already includes nuclear, wind and solar energy, and coal-fired plants while reducing our reliance on foreign sources of oil. It provides a lost-cost source of energy for Illinois businesses and residents that will save money. New environmental technologies used by companies combined with affordable domestic natural gas have resulted in the lowest levels of greenhouse gas emissions in twenty years. It is a win-win proposition.

The Illinois Manufacturers’ Association is leading efforts at the State Capitol to create a well-designed regulatory structure governing things like water management, chemical disclosure, and wellhead protection. As we have seen in other states, it is possible to protect our air, water and land while growing this vibrant industry and creating thousands of manufacturing and other good-paying jobs.

The Illinois Manufacturers’ Association advocates, promotes and strengthens the environment for manufacturers. Representing nearly 4,000 companies and facilities, the IMA is the only statewide trade organization in Illinois dedicated exclusively to manufacturing.