Fracking Boom Raising Household Incomes by Thousands
September 13, 2013
Surging oil and natural gas production brought on by hydraulic fracturing is lifting the U.S. economy by lowering energy costs for consumers and manufacturers, says BusinessWeek.
Oil and gas production are near record levels as a result of hydraulic fracturing ("fracking"), a drilling technique that frees trapped hydrocarbons by injecting water, sand and chemicals into shale rock.
- In 2012, the energy boom supported 2.1 million jobs, added almost $75 billion in federal and state revenues, contributed $283 billion to the gross domestic product and lifted household income by more than $1,200.
- The competitive advantage for U.S. manufacturers from lower fuel prices will raise industrial production by 3.5 percent by the end of the decade, says a report from IHS CERA.
- Lower costs are also driving investment in energy-related chemical industries, where more than $31 billion will add more than 16 million tons of chemical, plastics and related manufacturing facilities by 2016.
Disposable income will rise as a result of lower energy prices, adding $2,700 per household in 2020 and more than $3,500 by 2025. Factors that could restrict production -- an extension of fracking bans such as the one in New York state or stricter environmental regulations -- would result in a rapid decline in the economic benefits.
Source: Jim Efstathiou Jr., "Fracking Boom Seen Raising Household Incomes by $1,200," BusinessWeek, September 4, 2013.
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