The Energy Sector is Keeping the U.S. Out of Recession
While speculation swirls in the financial world about the potential for QE3, a new report from Bank of America/ Merrill Lynch is drawing attention to a $900 million per day boost to our economy.
It is affecting virtually every American and it doesn't involve central bank intervention or an increase in the dangerously bloated U.S. dollar monetary base.
The new global energy report outlines the benefits reaped by U.S. businesses and citizens from rapidly developed domestic energy production. The $900 million figure was determined by combining the difference between U.S. and international natural gas and oil prices, increased fuel exports revenue and decreased energy imports.
Businesses and consumers are saving $566 million per day from cheap natural gas when the domestic rate is compared to the global average. The $16.82 per barrel disparity between WTI and Brent Crude prices is driving a $56.2 million per day gain, while exports account for $67.9 million. Natural gas substitution for electricity is adding $32.3 million worth of coal exports to the total as well.
"Energy is beginning to carry America," Merrill Lynch's chief of commodities research Francisco Blanch told USA Today.
The boon would account for roughly 2.2% of America's $15.5 trillion of GDP if it held steady; well above current estimates of GDP growth. Needless to say, the benefits are crucial to our tenuous economic state.
Thanks to the increased production of shale oil and gas in recent years, America’s energy industry is now delivering a $1 billion stimulus to the U.S. economy every day, and providing thousands of new shovel-ready jobs, generating state and federal tax revenues, and moving us ever-closer to energy self-sufficiency. And it’s important to recognize that most of the increased development of shale oil and gas that is now generating a $1 billion daily energy stimulus is taking place on private land, and is happening without any taxpayer credits, support, subsidies, grants or loans.
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