A new Congressional Budget Office report
will provide new ammunition to supporters of hydraulic fracturing ("fracking"), a process which enables access to large amounts of oil and gas trapped in shale and other formations of dense rock.
Fracking "increases economic output by a noticeable amount (three-quarters of a percentage point by 2020, CBO predicts)" and "reduces energy costs for consumers and industries," the Washington Examiner said
in an editorial on the report issued earlier this week. "Fracking will boost federal tax revenues by about 1 percent annually by 2040 without requiring any tax increases, according to CBO’s projections."
On net, CBO estimates that inflation-adjusted gross domestic product (GDP) "will be about two-thirds of 1 percent higher in 2020 and about 1 percent higher in 2040 than it would have been without the development of shale resources."
According to CBO, the technological innovations behind fracking will make existing labor and capital in many U.S. industries more productive and will result in higher wages.
Due to shale gas, "domestic production of all natural gas is on pace to increase for the ninth straight year and has reached record highs," CBO said.
As a result of that production increase, the inflation-adjusted wholesale price of natural gas in North America fell by close to 70 percent between 2008 and 2012 – reaching its lowest level since 1998.
Due to fracking, the United States has the potential to substantially reduce its dependence on hostile foreign regimes, a point acknowledged by Venezuelan President Nicolas Maduro. On Wednesday, Maduro blasted the United States for its increased use of fracking, accusing it of flooding the market with oil produced using "environmentally destructive" methods, Fox News Latino reported.
The Venezuelan strongman complained that the higher U.S. production was a significant factor causing oil prices to plummet in recent months, damaging the financial situation in his country and other major oil exporters.
"The oil they’re taking from [shale deposits] and the gas," Maduro said. "They’ve flooded the international market to batter the Russian economy, Iran, and to hurt us, Venezuela."
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