Shale Gas Saved U.S. Consumers $3.1-$4.3 Trillion, Paper States
The Story
A new working paper from the National Bureau of Economic Research estimates that U.S. natural gas consumers saved between $3.1 trillion and $4.3 trillion from 2007 to 2025 due to the shale gas boom. The paper attributes the savings to advances in hydraulic fracturing and horizontal drilling that increased U.S. production and turned the country from a net importer to the world’s largest exporter. The savings were calculated using price differences between the U.S., Europe, and Japan.
Key Facts
- As of the mid-2000s, U.S. natural gas production had been flat for a decade, and the U.S. was importing liquefied natural gas (LNG) with plans to import more.
- Advances in hydraulic fracturing and horizontal drilling caused U.S. natural gas production to increase significantly.
- The U.S. went from being a net importer of natural gas to being the world’s largest exporter.
- The paper calculates that U.S. natural gas consumers saved $3.1-$4.3 trillion between 2007 and 2025, equivalent to $164-$227 billion annually.
- Access to low-price U.S. natural gas was noted as particularly valuable during major supply shocks such as the war in Ukraine.
- The benefits of shale gas were experienced broadly across sectors and states.
- The source is a new NBER working paper by Lucas W. Davis.
Conflicting Reports
No conflicting reports identified in the source article.
Still Unclear
No open questions identified in the source article.
Misconceptions
No widespread misconceptions addressed in the source article.
Key Figures
- Lucas W. Davis, author of the NBER working paper.
Sources: marginalrevolution.com
