Lucas Davis “How Much Has Shale Gas Saved U.S. Consumers?” (May 2026) | WP-360R
Abstract:
It may seem like a distant memory now, but as of the mid-2000s, U.S. natural gas production had been flat for a decade, and the U.S was importing liquefied natural gas (LNG), and with plans to import much more. Then shale gas happened. Advances in hydraulic fracturing and related technologies caused U.S. natural gas production to increase significantly, and the U.S. went from being a net importer of natural gas to being one of the world’s largest exporters. This paper calculates how much shale gas has saved U.S. natural gas consumers. Using price differences between the United States, Europe and Japan, we calculate that U.S. natural gas consumers have saved $4.5-$5.3 trillion between 2007 and 2025, equivalent to $237-$276 billion annually. Access to low-price U.S. natural gas has been particularly valuable during major supply shocks such as the war in Ukraine, and the benefits of shale gas have been experienced broadly across sectors and states.