Why Fracking Won't Bring Back the Factories (Yet)

Bown, Chad and Denevers, Michele and Harrison, Ann (2013): Why Fracking Won't Bring Back the Factories (Yet).

Abstract

Since last fall, President Obama has repeatedly declared that manufacturing jobs are coming back to America. In this article, however, we suggest that the return of U.S. manufacturing is still more promise than reality.In particular, while the recent increase in natural gas exploration and production has been optimistically linked to a U.S. manufacturing revival, the boom has not led to significant growth in employment. Paradoxically, for the U.S. to reap the greatest benefit possible from the extraction of its natural gas reserves, both more and fewer regulations are needed. On the one hand, current restrictions on natural gas exports must to be lifted to provide the right incentives for domestic producers, who receive much lower prices at home than they would abroad. On the other hand, more comprehensive environmental regulations would reassure critics that natural gas does indeed providea clean and sustainable promise for the U.S. economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: environment; fracking; natural gas, climate change; methane
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy

References

Justin R. Pierce and Peter K. Schott, “The Surprisingly Swift Decline of U.S. Manufacturing Employment,” NBER Working Paper No. 18655 (Cambridge: National Bureau for Economic Research, 2012).

Avraham Ebenstein, Ann Harrison, Margaret McMillan, and Shannon Phillips, “Why are American Workers getting Poorer? Estimating the Impact of Trade and Offshoring Using the CPS,” NBER Working Paper No. 15107 (Cambridge: National Bureau for Economic Research, 2013)

Avraham Ebenstein, Ann Harrison,Margaret McMillan, and Shannon Phillips, “Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys,” The Review of Economics and Statistics, forthcoming.

Ann Harrison and Margaret McMillan, “Offshoring Jobs? Multinationals and U.S. Manufacturing Employment,” The Review of Economics and Statistics, 93(3): 857–875.

Muehlenbachs, Spiller, and Timmins, “Shale Gas Development and Property Values: Differences across Drinking Water Sources.”

Dieter Helm, The Carbon Crunch: How We’re Getting Climate Change Wrong – And How to Fix It (New Haven: Yale University Press, 2012).