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new jobs and over $220 million in federal, state, and local tax revenue, and nearly
$1 billion in value added to the state economy. 11
How Has Supply Affected the Price of Natural Gas?
In 2010, proved reserves of natural gas and oil in the United States rose by the
highest amounts ever recorded, according to the US Energy Information Admin-
istration: 2.9 billion barrels of crude oil (surpassing 2009's high by 63 percent),
and 33.8 trillion cubic feet of natural gas (17 percent higher than 2009). 12 Largely
thanks to hydrofracking, annual production has climbed to some 30 trillion cubic
feet a year, and prices have dropped precipitously, from about $13 per million
BTUs in 2006 to less than $4 per million BTUs in 2013. 13
In short, abundant supplies have led to lower prices. America's Natural Gas As-
sociation (ANGA) estimates that between 2012 and 2015 low gas prices will add
$926 in disposable income to each household, a number that could reach $2,000 by
2035. 14
States like Pennsylvania, which was once a natural gas importer, are now pro-
ducing so much shale gas that they are poised to export it. 15 Energy-intensive in-
dustries that have moved factories overseas in search of cheaper fuel are now able
to stay in the States, or even “reshore” (bring back) facilities. Even in industries
where electricity represents a minimal percentage of costs, the price of gas can
have a profound impact.
The fossil fuel industry represents a modest slice of America's overall economic
pie, but the relative drop in gas prices has been so dramatic that it could boost a
manufacturing renaissance that would add 0.5 percent a year to GDP by 2017, ac-
cording to the Swiss bank UBS. 16
How Has Cheap Gas Impacted the Petrochemical Industry?
Industry uses around a third of US gas output, and one of the biggest consumers is
petrochemical manufacturing. 17 Manufacturing products like methanol and ammo-
nia, a key ingredient of fertilizer, require gas as feedstock (raw material for indus-
trial processes). Switching feedstock from naphtha, derived from oil, to ethane, de-
rived from gas, has kept petrochemicals affordable even as oil prices have spiked.
These chemicals in turn provide cheaper raw materials for farmers, automakers,
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