American Natural Gas is Helping to Save the Economy
The enormous benefits of safe, responsible, tightly-regulated American natural gas development cannot be denied. This fact is proof positive. Indeed, several columns this week further underscore how “Shale extraction represents one of the most important developments for the economy in the last 60 years. It’s pushing down energy prices and creating many new opportunities for jobs, investments and manufacturing.”
In a CNNMoney column, Brookings Institution senior fellow Martin Neil Baily – who chaired the Council of Economic Advisers under President Clinton – and Philip K. Verleger Jr., a visiting fellow at the Peterson Institute for International Economics, write this:
The shale boom is for real and a serious game changer because of its size and potential longevity
The prospect of cheap gas for years to come is already spurring investment. Waste Management Inc. is investing in natural gas trucks that cost $30,000 more but save $27,000 a year in fuel costs. The big engine manufacturers are developing long-haul trucks to operate on liquefied natural gas. Eighty percent of future electricity generating capacity is expected to be from natural gas and many coal-fired plants may be shifted to gas. The market incentives are already there and jobs are flourishing.
Government could throw gas on this economic fire by allowing facilitation, better coordination and cutting of red tape between federal and state agencies. Working together, government at all levels can set clear standards that protect both people and profits, yet speed the approval process to create more jobs at a faster pace.
Environmentalists should recognize the longer-term benefits of abundant gas supplies.
And President Obama should help promote a cleaner fossil fuel that shows such promise and is already creating new jobs.
Cheap gas may not be enough to offset the drag of a slowing global economy this year, but it will boost long-term investment, help the beleaguered manufacturing sector and increase exports.
Building petrochemical plants could suddenly become attractive in the United States. Manufacturers will “reshore” production to take advantage of low natural gas and electricity prices. Energy costs will be lower for a long time, giving a competitive advantage to companies that invest in America, and also helping American consumers who get hit hard when energy prices spike.
Other countries like China will attempt to replicate America’s good luck, but will fail because they lack the unique legal, political and market institutions which have led to our success.
After years of bad economic news, the natural gas windfall is very good news. Let’s make the most of it.
Separately, Peter Orszag, President Obama’s former Office of Management and Budget director, writes this in a Bloomberg News column under the headline “Natural-Gas Cars Can Drive Us Toward a Better Economy”:
Given the problems associated with U.S. dependence on oil, more use of natural gas for transportation could carry big benefits.
That benefit [of using natural gas] alone could amount to between $850 (for sedans) and $18,500 (for heavy-duty trucks) for each vehicle converted.
With a bold incentive for more natural-gas filling stations, we could put more people to work today and might one day even catch up to Armenia on natural-gas vehicles.