The Recent Energy Boom Revs up the US Economy

An article in the Wall Street Journal discusses how the recent energy boom is revving up the US economy.  It has spurred the use of new drilling techniques to tap oil and gas in shale rocks, creating about 158,000 new jobs over the past five years.   As a result, US oil production is rising for the first time in years and natural gas prices have plunged to a 10-year low.

So how does the energy boom benefit US citizens? The advantages of rising energy production are quickly spreading across the entire nation.  For example, truck drivers from anywhere in the country can find work relating to the energy industry and even private-equity firms are creating billion dollar energy deals.  More than this, manufacturing in the US is picking up and creating major investments in petrochemical and steel production in the Gulf Coast and Midwest.

The energy boom even directly affects us – cheap natural gas makes our heating and electricity bills much lower. Economists say that it is the biggest stimulus the US economy has going for it currently.  With spending on drilling and oil-field market research, the amount of jobs created could increase the employment rate even further than the past few months.  In fact Joe Martens, the New York environmental commissioner states, “There is potentially a very significant economic upside.  There’s an enormous job impact.”

While this is all good and well, the energy boom also comes with serious negative implications.  Drilling has disrupted communities, causing road damage and raising fears about potential water contamination and air pollution. Skeptics also question what will happen when the drilling ends; an employment boom could lead to a painful employment bust.

I personally take a positive stance on the energy boom.  The US is still working on reestablishing its self-sufficiency, and this could be exactly what we need to stimulate the economy and stand on our own two feet once again.  Lower natural gas prices not only reduce our bills, but create a structural economic advantage for the US; it is a new competitive strength for US manufacturers.  Even more importantly, the creation of jobs leads to consumer confidence and this has a domino effect on the entire economy.  The aftereffects of the 2008 recession have been prolonged for too long now – if the energy boom is our ticket to stability, I most definitely see it in a positive light. How do you see it?