Fracking 'improves US economy and household finances'

The hydraulic fracturing (fracking) boom in the US has helped to increase household incomes and improve the country's economy, according to a new report. A study performed by IHS has found that oil and gas production has helped to provide more income to families, increase trade, improve the economy and support a large number of jobs. This is all on top of boosting the US's position in the global fuel market.

With lower energy bills created by the increased use of natural gas, households throughout the US are reportedly benefiting from an average increase of $1,200 (£771) in their disposable income in 2012. It is projected that the average savings per household as a result of further decreasing energy costs, will increase to $2,000 in 2015, with yet further savings in 2025 leading to an extra $3,500 in disposable household income.

The report, called 'America's New Energy Future: The Unconventional Oil and Gas Revolution and the Economy - Volume 3: A Manufacturing Renaissance', has furthered research previously performed by IHS on how unconventional gas and oil activity provide economic contributions. It suggested that the US economy will only improve further as fuel imports are reduced and there is more global competition for US energy.

The full value energy chain (upstream, midstream and downstream energy and energy-related chemicals) or unconventional US energy production is taken into account in the report for the first time. It was found that more than 377,000 jobs in the country are supported my midstream and downstream unconventional energy activity. In total, including these jobs and upstream activity, over 2.1 million jobs are supported by US unconventional energy production and activity. It is estimated that this number could increase to 3.3 million in 2020, with further rises in job numbers continuing.

"The unconventional oil and gas revolution is not only an energy story, it is also a very big economic story that flows throughout the US economy in a way that is only now becoming apparent," said Daniel Yergin, IHS Vice Chairman.

"In addition to significant job and economic impacts from energy production and its extensive supply chains, the growth of long-term, low-cost energy supplies is benefiting households and helping to revitalize US manufacturing, creating a competitive advantage for US industry and for the United States itself."