New research shows states with hydraulic fracturing and horizontal drilling saw faster economic turnarounds after the recession in 2008 when compared to those who have no drilling activity.
New research has been released by Bernard L. Weinstein, an associate director of the Maguire Energy Institute at Southern Methodist University's Cox School of Business, that explained U.S. states with hydraulic fracturing and horizontal drilling saw faster economic turnarounds after the recession in 2008 when compared to those who have no drilling activity, Oil and Gas Journal reported.
Weinstein explained that job demands in shale developments have shifted dramatically. According to the source, he believes the need for petroleum engineers, environmental specialists, drilling managers, equipment manufacturers and other natural resource workers has increased as the sector grows larger in active drilling states.
"But these high-paying specialties are not the only ones to benefit from the boom," said Weinstein, according to the source. "Almost all sectors of the local economies are experiencing greater-than-expected growth in employment opportunities and wages."
It's no surprise to see the unemployment rate drop to 5.1 percent in Texas, which is the lowest among any larger state, and witness crude oil productions grow by 100 percent since 2010, the source reported.
Texas and North Dakota leading production and job growth
Bentek Energy, an energy analyst and forecasting sector of Platts, a leading energy, petrochemicals, metals provider, said that in June, oil production had increased by more than 33 percent in Texas and North Dakota.
The Bakken shale in North Dakota produced 1.1 million barrels of oil per day (bpd) in June, which was nearly 30 percent higher than the figures recorded in June 2013, the research stated. Texas's Eagle Ford shale saw a nearly 38 percent increase in oil production from June 2013 to 2014 with 1.4 million bpd recovered last month.
"Bentek estimates that internal rates of return on drilling and carrying costs exceed 65% in the Eagle Ford and 50% in the Bakken," said Jack Weixel, the director of energy analysis at Bentek Energy. "To the average producer that means for every $1 million they sink into drilling a well, they can expect to recover at least $1.5 million in crude oil, liquids and natural gas over the course of a year."
States avoiding fracking see higher unemployment
Some states have avoided fracking altogether with rich producing oil shale developments underneath their feet. According to Oil and Gas Journal, New York has a large and possibly one of the "sweet spots" of the Marcellus shale spreading through a major portion of the state.
However, New York currently bans fracking operations, but their unemployment rate is at 6.7 percent, and some other northeastern states have rates as high as 7.5 percent.
With the production continuing in fracking states, original equipment manufacturers can turn to Broadwind Energy for precision gearing needs.