Surging oil and gas production in the United States is driving energy prices down to consumers and stimulating a manufacturing revival that will ripple throughout the economy. In a testament to American ingenuity and expertise, new methods of extracting natural gas and oil have reduced American reliance on foreign energy supplies, fueled investment by domestic and foreign industries and created jobs in drilling, construction and supporting businesses.
The hydrofracking that has freed up vast new sources of natural gas in recent years has cut prices to less than 30 percent of what they were in 2008. Companies in France, Germany and Japan are paying three or more times the American price of $3.54 per million BTUs, the Wall Street Journal reported.
The U.S. is now going to be the low-cost industrialized country for energy, energy economist Philip Verlegger told the Journal. This creates a base for stronger economic growth in the United States than the rest of the industrialized world.
Production lured overseas is returning. Foreign manufacturing companies heavily dependent on energy are looking to build new factories in the United States. A new chemical plant planned by Royal Dutch Shell PLC in Pennsylvania would be the first such plant built in the United States in more than a decade, and its doing so to take advantage of methane gas from the Marcellus Shale under Pennsylvania, New York and surrounding states. CF Industries Inc., a fertilizer maker, plans to invest $2 billion to boost production through 2016.
Plunging prices have turned the U.S. into one of the most profitable places in the world to make chemicals and fertilizer ... and slashed costs for makers of energy-intensive products such as aluminum, steel and glass, the Journal reported.
Oil production is seeing a similar boom. The 7 percent hike to about 11 million barrels a day predicted by analysts would be the largest single-year gain in six decades. The federal Energy Department foresees production of crude and other liquid hydrocarbons averaging 11.4 million barrels a day next year, a record output just below Saudi Arabias.
IHS CERA, an energy consulting firm, predicts the oil and gas boom will add 1.3 million jobs to the economy by the end of the decade. That is on top of the 1.7 million jobs the industry already supports.
The energy boom has less to do with government policies picking winners and losers than with the marketplace where industry and private enterprise have responded in developing more efficient means of extracting energy sources from the ground.
Meanwhile, as the rest of the country shares in the prosperity, New York stands in the way of developing new energy sources while we are willing to take advantage of the low prices they bring as we enter the heating season.