American natural gas development is strengthening the U.S. economy and making domestic manufacturing more competitive, two recently released economic reports conclude. Researchers at the prestigious London School of Economics, in one report, find that natural gas development “has made U.S. manufacturing more competitive” and helped advance American manufacturing exports to the world.
The economic experts conclude “that the cost advantage due to the shale gas boom may have helped the US economy recover significantly faster than it would otherwise have done after the financial crisis of 2007/08.”
Key Takeaways from the London School of Economics report:
- Boost to manufacturing competitiveness: “Firms that manufacture energy-intensive products experienced a much more substantial cut in production costs and, hence, a boost to their competitiveness.”
- Affordable, domestic natural gas: “For every dollar increase in the price gap of natural gas between the United States and Europe, output in chemical manufacturing increased by 1.6%. In the face of nearly a $10 gap by the end of our sample period, this baseline result is large. … The shale gas boom provided energy intensive industries with a cost advantage over their international competitors.”
- Manufacturing job-creator: “Total manufacturing sector employment increased by around 356,000 jobs up to 2012. A comparison with previous research suggests that, for every two jobs created in direct relation to fracking, this indirect effect adds more than one additional job elsewhere in the economy.”
- Increases American manufacturing exports: “Given that the price gap widened to $10 by 2012, we find that average manufacturing exports have expanded by roughly 10% due to the shale gas boom. This amounts to roughly 4.4% of the overall value of exports of goods and services from the United States in 2012.”
In another study, published by the National Bureau of Economic Research, experts with the University of Pennsylvania conclude that natural gas development has led to a net 4.6 million new American jobs.
Key Takeaways from the study published by the National Bureau of Economic Research:
- Job-creator: “In the aggregate, we estimate that during the shale oil period 4,600,000 (net) new jobs are linked with the development of shale oil technology. This represents a 4.2% increase in the number of jobs across the industries in our study, compared to the aggregate number of jobs at the beginning of the shale oil period.” (p. 4)
- Long-term economic driver: “We find that…shale oil is an important contributor to the future U.S. economic growth.” (p. 48)
Both economic reports further underscore the key message that MSC’s Dave Spigelmyer told Fox News late last week: The continued growth of natural gas development – and the safe modernization of infrastructure to move gas to market – presents tremendous opportunity for the Commonwealth’s economy and environment.
NOTE: Click HERE to watch the FoxNews segment online.
SPIGELMYER: “This is a multi-generational play. It’s no flash in the pan. I’d say we’re in the first inning of a nine inning game.”
FOX NEWS REPORTER: “The industry says it needs infrastructure to move an oversupply of gas to more markets. That investment could create lasting jobs.”