THE SHALE SOLUTION -How the Economic Growth Shale Gas Production in Pennsylvania has Contributed to can be Maintained, Even After the Gas is Depleted.

Abstract

The emergence of hydrocarbon energy extracted from shale has been nicknamed the Shale Gas Revolution , due to its implications for the American society, geo-politics and economy. This thesis will explain how the economic growth shale gas production in Pennsylvania so far has contributed to can be maintained, also for the future, when shale gas is no longer produced or depleted. By focusing on Pennsylvania, which has the nation s highest shale gas production growth rate, this thesis will examine the most important ways in which shale gas production has affected the state s economy; mainly through taxes, the creation of jobs, establishment of boom towns, increased wages, leasing and royalty payments, and contributing to a possible manufacturing renaissance . It will use the economic theory The Endogenous Growth Theory and some of its variations to suggest how the revenues from natural gas production should be spent in order to achieve a sustainable economy. The thesis will focus especially on how the state s government should invest in knowledge, and establish a high-quality institutional system that promotes technological change and innovation, which are key factors in maintaining economic growth. By doing so, the economic growth shale gas so far has generated can be maintained, also after shale gas is depleted.