Revolution in U.S. oil and gas industry brings higher wages and lower prices

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A new study by IHS Global Insight outlines the economic impact of unconventional oil and natural gas production, such as fracking.

The Wall Street Journal reports on a new study, which outlines the economic impact of unconventional oil and natural gas production, such as fracking:

“Last week we reported on a study showing that the U.S. oil and natural gas revolution may be the country’s best antipoverty program, and the evidence keeps coming. A new report from IHS Global Insight estimates that fracking added the equivalent of a cool $1,200 to real household disposable income on average in 2012.

Lower costs for raw materials were passed on to consumers via lower home heating and electricity bills and lower prices for other goods and services. Wages also increased from a surge in industrial activity. On present trend, IHS predicts that unconventional oil and gas will contribute more than $2,000 a year by 2015 and $3,500 by 2025.”

The IHS Global Insight studyalso notes the industry’s impact on jobs, GDP, and government revenues:

“The full economic contribution from the unconventional oil and natural gas value chain and energy-related chemical manufacturing has added 2.1 million jobs in 2012, and that contribution will increase to almost 3.3 million by the end of the decade and almost 3.9 million by 2025. Annual GDP contributions will nearly double, from almost $284 billion in 2012 to almost $533 billion in 2025. Government revenues will average $115 billion annually and will grow by a total of more than $1.6 trillion over the 2012 to 2025 time frame.”

*Per IHS’s disclosure, the research was supported by American Chemistry Council, America’s Natural Gas Alliance, the American Petroleum Institute, the Fertilizer Institute, the US Chamber of Commerce– Institute for 21st Century Energy, the National Association of Manufacturers, the Natural Gas Supply Association, Rio Tinto, and the Society of the Plastics Industry.

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