Is energy production transforming the American economy?

NPR had a good piece Wednesday morning about the state of the economic recovery in the United States. What really stood out was its treatment of the transformative role played by the American oil and gas industry in driving economic growth and job creation.

Among the guests on the Morning Edition segment was Zanny Minton Beddoes of The Economist, who highlighted the role of American shale oil and gas development. Beddoes said it “is completely revolutionizing part of the U.S. economy, and it’s a strength that a lot of other advanced economies haven’t got.”

Oil Guru Recruitment, Oil and Gas Jobs, Economist Comeback Kid 420x552 Is energy production transforming the American economy?, oil and gas workThe NPR segment focused on the latest issue of The Economist, which I strongly encourage readers to check out.

That issue features a bare-chested Uncle Sam flexing his muscles on the cover under the banner “Comeback kid: Rebuilding America’s Economy.” The magazine’s analysis concludes that the energy industry is a huge component of America’s economic revitalization. And it makes clear that government has a key role to play in allowing the private sector do what it does best—namely, innovate and grow.

Consider this from the Economist editorial, which notes that both presidential candidates agree the economy is in poor shape: “America’s economy is certainly in a tender state. But the pessimism of the presidential slanging-match misses something vital. Led by its inventive private sector, the economy is remaking itself. Old weaknesses are being remedied and new strengths discovered, with an agility that has much to teach stagnant Europe and dirigiste Asia.”

Many of the “new strengths” being developed by the inventive private sector are energy industry innovations. The headline on the issue’s lead story puts it best: “Points of light: Amid the gloom there are unexpected signs of boom, especially in energy.”

That article notes that the benefits of increased oil and gas production in the U.S. extend broadly throughout the economy—from new revenues for government coffers to industries that produce glass, fertilizer, plastics, steel and electricity. Ultimately, of course, consumers are the real winners.

A companion to this story is a 14-page in-depth feature on what The Economist calls America’s natural gas “bonanza.” The section covers everything from the myths surrounding hydraulic fracturing to the economic windfall stemming from shale production to the prospects for liquefied natural gas (LNG) as well as implications for global energy security. What stands out is the positive contribution the oil and natural gas industry is making to America’s economic future.

This is a good read for anyone looking for an overview of the environmental, energy and economic issues surrounding U.S. energy production.

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