As the debate continues over the best way to create jobs in America, Democrats continue to claim that increasing energy costs through regulation will create opportunities in the “green” economy. This argument fails to realize that with the advent of the natural gas revolution, job creation is already taking place. Not only are jobs created in the extraction of natural gas resources, but manufacturing opportunities are now available to a wide variety of industries due to lower fuel prices. Residents are even noticing lower energy bills to heat and power their homes. Cheaper energy prices are in fact the pathway to the revitalization of the US economy, and encouraging its development is the best way to get Americans back to work.
The Department of Energy has released revised estimates of natural gas reserves which show an increase of almost 62 percent over the last ten years. These new reserves are cheaper to extract due to the lowered costs and increased productivity of hydraulic fracturing, or fracking. Since the last quarter of 2009, there have been almost two hundred thousand jobs created directly from the exploration and mining of natural gas. This in turn has contributed to the creation and stability of hundreds of thousands of related jobs in other sectors.
Cheap, reliable natural gas has the potential to spur construction of plants for chemicals, fertilizers, steel and other industries which will continue to grow our economy. For example, two projects in my home state of Louisiana are currently being developed due to the cheap price of natural gas. A plant to be built by Nucor will soon begin to convert iron ore pellets and natural gas into iron capable of being used in steel mills. Another project, by Dow Chemicals, seeks to invest $5 Billion in the Gulf Coast Region to build new plants, and upgrade or reactivate others. The low price of natural gas is extremely attractive to these companies and will result in high paying manufacturing jobs for US citizens.
States known for energy production are not alone in taking advantage of the natural gas boom. In fact, some of the states hit hardest by the recession have seen a resurgence of economic activity because of the development of shale gas technology. A new $650 million steel plant in Ohio has been built to provide steel tubing for fracking. Jobs across the Midwest are being created due to the exploration of the Marcellus Shale, centered in Pennsylvania. In addition, Shell is planning on investing $2 billion in the construction of a new petrochemical plant to manufacture value-added products in this area. It is estimated that this plant will generate approximately $16 billion dollars worth of additional investment in a part of the country that is in need of an economic boost.
The availability of natural gas has caused a sharp reduction in price for electricity generation which in turn is lowering costs on both residential and commercial power bills. The five large regional utilities that serve Pennsylvania and New Jersey have reduced their gas prices on bills by 37 to 52 percent since December 1, 2008 as supply has risen and costs have declined. The reduction in price has meant annual savings of hundreds of dollars to consumers in those areas. These costs savings are real and allow hard-working Americans to have more money to spend after accounting for their basic necessities. Low electricity prices are also allowing the United States to be more competitive in the global marketplace. A Brazilian firm, Santana Textiles, is currently building a $180 million denim plant in Texas as opposed to Mexico after citing electricity costs up to 30 percent lower in the US due to the widespread availability of cheaper, natural gas-based electricity.
The economic successes of domestic gas development and fracking are plentiful. A low cost, reliable energy supply is what American manufacturers need to compete in the global marketplace and create jobs here in the US. Those that seek to limit the success of natural gas as a way to jumpstart the “green” economy, or who seek to stop fracking through overregulation, risk cutting off energy resources our economy demands and eliminating the subsequent jobs so many Americas need.
The natural gas revolution over the past five years has seen great success in an economy where productivity still lags. Supporting this development by allowing industry and states to lead is the best way forward to encourage job growth and investment. Our country’s economic opportunity will not lie with artificially higher energy prices to support the development of a “green” economy; it will be in the promise of low, stable energy prices that encourage manufacturers to continue investing in the American worker.
Rep. Bill Cassidy, M.D., represents the 6th Congressional District of Louisiana in Congress. This article originally appeared at TheHill.com.