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House Testimony: Shales, Technology Made U.S. 'Energy Rich'

The country is in the midst of an "unconventional revolution in oil and gas" whose implications reach well beyond the energy industry, IHS Vice Chairman Daniel Yergin, tells the U.S. House Subcommittee on Energy and Power in pre-filed testimony to be given Tuesday.

"Today, the [energy] industry supports 1.7 million jobs -- a considerable accomplishment given the relative newness of the [unconventional drilling] technology. That number could rise to 3 million by 2020. In 2012, this revolution added $62 billion to federal and state government revenues, a number that we project could rise to about $113 billion by 2020.

"It is helping to stimulate a manufacturing renaissance in the United States, improving the competitive position of the United States in the global economy, and beginning to affect global geopolitics. This revolution has also engendered two debates -- about the environmental impact of shale gas development and about the role of U.S. energy exports."

Also expected to testify are Adam Sieminski, U.S. Energy Information Administration (EIA) administrator; Jennifer Morgan, director of the climate and energy program at the World Resources Institute; Harry Vidas, ICF International vice president; and Mary Hutzler of the Institute for Energy Research (IER). Sieminski's testimony had not been pre-filed Monday.

Yergin's testimony cites EIA data that shows that "shale gas has risen from 2% of domestic production a decade ago to 37% of supply, and prices have dropped dramatically. U.S. oil output, instead of continuing its long decline, has increased dramatically by about 38% since 2008."

Vidas' testimony says that the "assessed remaining recoverable U.S. natural gas resource base of 3,850 Tcf represents about 155 years of current annual consumption. The shale gas resource of 2,000 Tcf represents 52% of the total. This assessment should be viewed as conservative in that it assumes current technology and no major new plays."

In her testimony, Morgan acknowledges U.S. fossil energy resources but also advocates for enhancing energy efficiency and increasing awareness of climate change and its impacts. "Current U.S. energy policy lacks a framework for prudently assessing and managing the risks of climate change. Yet all of the evidence suggests that every year of deferred action vastly increases the cost to future generations of investing in a course correction that puts us on a prudent path toward climate stabilization."

According to the Center for Media and Democracy's SourceWatch website, IER has been an advocate of "climate change denial."

The United States is "energy rich," but the federal government has prevented the oil and gas industry from having access to a significant amount of the country's energy resources, IER's Hutzler, says in her testimony.

"The United States has more combined oil, coal and natural gas resources than any other country on the planet. As we used these energy resources over the past 50 years, not only did we grow our economy and improve our quality of life, but we improved our air quality as well."

Hutzler will testify that oil and gas production on federal lands is "becoming more difficult and time consuming" and that production is only increasing on state and privately controlled onshore areas. Tuesday morning IER will release a study that refutes an earlier analysis by the Congressional Budget Office (CBO) that found that the federal government would realize only a minor increase in gross oil and natural gas proceeds and production if all federal lands that are off-limits were immediately opened to leasing.

IER faults the CBO study for being restricted to only analyzing lease revenues while ignoring the follow-on impacts on the economy, such as substantial increases in gross domestic product, employment, wages and tax revenues at federal and local levels.

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