WHAT IF…..America’s Energy Renaissance Never Actually Happened?
Sitting here in late September 2016, it’s pretty difficult to imagine what the U.S. would look like if the staggering energy renaissance of the last decade had never occurred. It’s almost like trying to imagine what if Donald Trump had stuck to real estate or if Lebron never returned to Cleveland. All of these actualities are now so ingrained in our lives, we take them for granted as almost inevitable. Hindsight is a wonderful thing.
The simple result of our analysis is pretty clear: we’d be in a world of hurt. The U.S. would be short 4.3 million jobs and over half-a-trillion dollars in annual GDP. Perhaps of more concern to most Americans, electricity prices would be 31% higher and we’d all be paying 43% more at the pump. Carbon dioxide emissions would be 23% higher and we’d be importing 160% more oil.
America is currently in the midst of a tremendous manufacturing build-out. From Texas to Ohio to Pennsylvania to Louisiana, we’re seeing new manufacturing investment being made to take advantage of energy supplies that are cheaper and more abundant that almost any other place in the world. Yet had the energy renaissance never happened, U.S. industry would be paying twice as much for natural gas price, its output would be some $50 billion lower, and almost 400,000 jobs would be lost. And that’s just the industrial sector.
Our analysis also found some states would be especially drubbed absent the renaissance. Pennsylvania would lose $13 billion in annual GDP plus the almost $1 billion collected in “fees” from energy producers. Ohio would lose more than 110,000 jobs and $10 billion in state GDP. And Wisconsin, an important supply-chain state, would lose almost $4 billion in state GDP and $2.2 billion in labor income, and its $10 billion per year cheese industry would be much less competitive against producers from outside of Wisconsin.
We take for granted that gasoline prices have been at 10-year lows and aren’t erratically spiking every time a global disruption occurs. We forget that the renaissance created more than 4 million jobs—at the height of the Great Recession mind you—and ultimately disproved the conventional wisdom that the United States could never produce enough oil to impact the price at the pump.
Americans of every stripe, in every state have benefitted tremendously from the energy renaissance, with more jobs, lower energy prices, better energy security, and an increasingly competitive America. It’s important to remember that as the level of anti-energy zealotry ramps up through this election season.