The U.S. oil and gas boom has made a "significant contribution" to economic and jobs growth since the recession, reversing domestic energy consumption predictions in the process, the White House said in a report released Thursday.
The report noted that oil and natural gas production alone contributed a 0.2 percentage point increase to real GDP growth in 2012 and 2013, with 133,000 jobs added between 2010 and 2013 in those sectors, not accounting for spillover jobs. The surge also has boosted energy security through reducing oil price shocks and has brought the U.S. trade deficit to its lowest level since 1999, excluding 2009, the report said.
"Only eight years ago, baseline projections showed steadily increasing petroleum consumption well into the future. But the Energy Information Administration now projects petroleum consumption to decline starting after 2019," the report said.
The report sounded a laudatory tone on oil-and-gas production, calling the domestic energy boom "remarkable" and praising developments that had occurred both before and during President Obama's tenure. Republicans, however, have criticized the White House's oil-and-gas record, as they have pressed the Obama administration to open more federal offshore and onshore lands to drilling.
The report comes ahead of an expected Monday announcement of a proposed carbon emissions rule for the nation's 1,600 power plants, which account for 40 percent of carbon emissions. The rollout, which forms the cornerstone of Obama's climate strategy, has high political stakes -- it could endanger some red-state Senate Democrats, jeopardizing the party's chances of keeping control of the upper chamber.
The White House report underscores how the Obama administration has had to balance economic and climate concerns with those of its environmental allies and Democratic base. While the report emphasized progress in the renewable energy industry -- solar power employment rose 50 percent to 143,000 jobs between 2010 and 2013, and wind- and solar-capacity has doubled under Obama -- it also served to blunt GOP attacks that the Obama administration has abandoned fossil fuels.
Much of the boom is owed to advances in hydraulic fracturing, or fracking, the drilling method that blasts a high-pressure cocktail of water, sand and chemicals into tight-rock formations to tap hard-to-reach hydrocarbons. The process has helped turn the U.S. into the world's top natural gas producer, and it could become the biggest oil producer as early as next year, according to the International Energy Agency.
Fracking has helped lower natural gas prices to about $4.50 per million British thermal units, pushing electric utilities to use more of it relative to coal and helping drive U.S. carbon emissions to its lowest levels in 20 years. Natural gas will become increasingly relied upon because forthcoming power plant emissions regulations will make it harder for utilities to burn coal, which possesses double the carbon intensity as natural gas.
"Looking ahead, the relatively low price of natural gas will make it an economically attractive alternative fuel as regulation of CO2 and other emissions under the Clean Air Act further reduces coal-fired electricity generation," the report said.
Renewable energy also would see an increase under stricter regulations, with the report noting that a transition to such fuels already has begun. Wind energy production tripled between 2008 and 2013, jumping from 55,363 million kilowatt-hours to 167,567 million kilowatt-hours. Utility-scale solar grew ten-fold over the same period, from 864 million kilowatt-hours to 8,918 million kilowatt-hours.
The report noted that solar and wind energy should continue to receive tax incentives because, unlike coal and natural gas, they do not impose a climate cost as they produce no carbon emissions.
"In the absence of market-based mechanisms to internalize the externality, it is appropriate to provide support through tax incentives and other measures commensurate with the value of the [greenhouse gas] reductions provided by those zero-emissions energy sources," the report said.