America’s New Energy Future: The Unconventional Oil & Gas Revolution and the US Economy
US unconventional oil and gas revolution to increase disposable income by more than $2,700 per household and boost US trade position by more than $164 billion in 2020
The economic and employment contributions from US unconventional oil and gas production are now being felt throughout the US economy, increasing household incomes, boosting trade and contributing to a new increase in US competitiveness in the world economy.
Unconventional oil and gas activity increased disposable income by an average of $1,200 per US household in 2012 in the form of lower energy bills as well as lower costs for all other goods and services. That figure is expected to grow to just over $2,000 in 2015 and reach more than $3,500 in 2025.
The US trade position will continue to improve, owing to the significant reduction in energy imports and the increased global competitiveness of US-based energy-intensive industries. Driven by a rise in domestic production and manufacturing that will displace imports, as well as a favorable export position for these industries, the trade deficit will be reduced by more than $164 billion in 2020—equivalent to one-third of the current US trade deficit.
More than 460,000 combined manufacturing jobs (3.7 percent of all manufacturing jobs) will be supported in 2020, rising to nearly 515,000 (4.2 percent of total manufacturing jobs) in 2025. The manufacturing sector will become increasingly connected to unconventional development as a primary source to create and sustain jobs over the course of the study period. Manufacturing jobs will represent one out of every eight jobs supported by unconventional oil and gas development during that time.
Additionally, the manufacturing renaissance is spurring changes in industrial production as well. In 2012, many energy-intensive manufacturing industries outperformed the total manufacturing index average growth of 1.3%. Subsectors such as Iron and Steel Product Manufacturing and Basic Organic Chemical Manufacturing are way out in front of the overall manufacturing average in both 2020 and 2025. The same can be said for Resins and Synthetic Material Manufacturing (6.0% in 2020 and 8.1% in 2025) and Agricultural Chemical Manufacturing (6.9% in 2020 and 7.7% in 2025).