Wall Street Journal (10/24/12) Ben Casselman; Russell Gold
A natural-gas drilling boom in the Marcellus Shale is pushing down manufacturing prices and creating jobs, giving companies a reason to stay in the U.S. Plunging gas prices have turned the U.S. into one of the most profitable places in the world to make chemicals and fertilizer, industries that use gas as both a feedstock and an energy source. They have also slashed costs for makers of energy-intensive products such as aluminum, steel, and glass.
“The U.S. is now going to be the low-cost industrialized country for energy,” the energy economist Philip Verleger says. “This creates a base for stronger economic growth in the U.S. than the rest of the industrialized world.” The same hydraulic-fracturing revolution that is freeing gas from shale formations is being used to extract oil. U.S. oil production is up 20% since 2008, and the U.S. government expects it to rise another 12.6% in the next five years.
Economists at Citigroup Inc. have estimated that increased domestic oil and gas production, and the activity that flows from it, will create up to 3.6 million new jobs by 2020 and boost annual economic output by between 2% and 3.3%.