Hess Fracking Site
A worker monitors water tanks at a Hess fracking site near Williston, North Dakota, US, in November Reuters

A surge in oil and gas production will drive the American economy 1% higher in 2040 than it would have otherwise grown, and energy exports will only fuel the expansion, according to an independent study on energy policy.

New drilling technologies, such as 'hydraulic fracturing' and 'horizontal drilling', have unlocked an abundance of fossil fuels from shale deposits and the bounty will push the economy and increase tax receipts, the study – the Economic and Budgetary Effects of Producing Oil and Natural Gas from Shale – by the Congressional Budget Office showed.

The report said officials estimated that "real (inflation-adjusted) GDP product will be about two-thirds of 1% higher in 2020 and about 1% higher in 2040 than it would have been without the development of shale resources."

"Federal tax revenues will be about three-quarters of 1% (or about $35bn) higher in 2020 and about 1% higher in 2040 than they would have been without shale development."

Current rules restrict US crude oil exports. The report said a liberalising fossil fuel export policy "would probably increase domestic production but have little effect on [consumer] prices."

The US is the world's leading oil consumer.

Capital Economics said in a 2 December note: "The US is still a large net importer of crude oil, so the recent collapse in oil prices will provide a net boost to real economic growth of about $150bn (£96bn, €121bn) or 0.8% of GDP."

Oil and gas output

The world's largest economy now produces about about 3.5 million barrels of tight oil a day and about 9.5 trillion cubic feet of shale gas per year. Those figures amount to about 30% of the nation's production of liquid fuels (which includes crude oil, biofuels, and natural gas liquids) and 40% of its production of natural gas.

EIA outlook

The US Energy Information Administration (EIA) recently projected that the production of tight oil and shale gas will continue to grow over the next decade, by about 30% and about 60% respectively.

The EIA has also estimated that the amount of tight oil and shale gas in the US that could be extracted with today's technology will satisfy domestic oil consumption at current rates for approximately eight years and domestic gas consumption for 25 years.