The shale gas boom will boost US manufacturing and jobs until at least 2035, the world’s most respected energy body predicted yesterday, reinforcing America’s economic edge over Asia and Europe for the next two decades.
The International Energy Agency said that shale would continue to fuel the American economy even after the US starts ramping up exports, despite fears that selling the cheap gas to overseas customers would erode the country’s competitive advantage.
Although the IEA expects the US to start exporting more of its gas in the next two decades, it said the high cost of shipping it overseas would mean that importers pay a higher price than domestic customers.
Foreign companies in energy intensive industries have been investing heavily in US-based plants to take advantage of cheap energy costs. The IEA expects the US share of energy intensive exports to climb by 2035 in contrast to sharp declines in Japan and Europe.
Vallourec, a French iron and steel company, recently invested more than $1bn in a new plant in Ohio, while Sasol, the South African oil company, plans to invest more than $20bn in US petrochemical plants.
“We will see manufacturing industry in the US flourish. US companies will enjoy a competitive advantage and increase their market share in terms of exports,” said Fatih Birol, chief economist at the IEA.