A boom in capital investment in US energy transportation and storage infrastructure is likely to continue through the decade, raising growth and job prospects, according to a study released on Tuesday.
High levels of investment will continue through 2025, pointing to fairly stable levels after that, researchers at IHS Global found in a study for the American Petroleum Institute, the trade group representing the energy industry.
Over the past five years, the US has become the global leader in crude oil production capacity growth and is now the largest natural gas producer, thanks to unconventional technologies such as horizontal drilling and hydraulic fracturing, or fracking, the report said.
“The momentum generated from 2013, a banner year for US oil and gas investment, will extend into 2014 and sustain a high level of infrastructure investment through the next decade,” the report said.
“In the face of these historic changes in US oil and natural gas production patterns the need for and benefits from additional oil and gas infrastructure in the US and Canada is becoming increasingly apparent,” it added.
The report came as US President Barack Obama’s administration is considering permission for a controversial Keystone XL Pipeline project to be built through environmentally sensitive areas in the state of Nebraska.
Following the 2008 to 2009 recession, investment in US oil and gas infrastructure has increased by 60 percent, to US$89.6 billion last year, the IHS report said
IHS estimated that between US$85 billion and US$90 billion of direct capital will be invested in oil and gas infrastructure this year.
From this year through 2019, the average annual investment is likely to be more than US$80 billion, it said, adding that the amount will slow to about US$60 billion annually by 2025.
During this period, the high level of investment will support almost 900,000 jobs, contribute US$94 billion to the economy, provide labor income of US$59 billion and produce more than US$21 billion in government revenues each year, IHS said.