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The US shale gas revolution: An opportunity for the US manufacturing sector?

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  • Yassine Kirat

Abstract

This paper provides new empirical evidence on the impact of the shale gas revolution on manufacturing output and trade in the United States. The shale gas boom has led to significant and persistent regional price differences in natural gas between the United States and the rest of the world. The results show that lower natural gas prices in the United States compared to Europe have led to industrial activity and investment increasing by nearly 3% and 2%, respectively. We also provide empirical evidence of structural breaks in the relationship between natural gas prices and both imports and exports. Finally, we suggest that while the shale gas revolution has helped some industries to expand, its impact on the manufacturing sector as a whole has been relatively weak.

Suggested Citation

  • Yassine Kirat, 2021. "The US shale gas revolution: An opportunity for the US manufacturing sector?," International Economics, CEPII research center, issue 167, pages 59-77.
    • Handle: RePEc:cii:cepiie:2021-q3-167-15
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    More about this item

    Keywords

    Manufacturing; Shale gas; Energy prices; Growth; Dynamic panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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