Potential impacts of expanded Arctic Alaska energy resource extraction on US energy sectors

Highlights: • We examine the effects of petroleum extraction in Arctic Alaska on the U.S. economy. • The extraction only boosts the U.S. economy at small rates. • Households and other sectors experience low prices of fuels and electricity. • The extraction makes important contributions to the international energy market. • The U.S. reduces its dependence on coal. - Abstract: This paper examines the potential effects of the expansion of crude oil and natural gas extraction in Arctic Alaska on the U.S. economy, focusing on key energy sectors. Expanded extraction activities are expected to boost the U.S. economy at relatively small rates because the oil and natural gas extraction industries comprise a small share of GDP compared to other U.S. industries. However, this expansion may have substantial implications on energy sectors, with considerable growth expected in the oil and petroleum products manufacturing industry. The U.S. trade balance for energy resources may be improved through increased exports of crude oil (108%), natural gas (26%), and petroleum products (10%). Such increased exports of energy from the U.S. are important supplies to the international energy market given the substantial role of the U.S. in global energy trade. In the domestic market, U.S. households enjoy lower prices of fossil fuels and electricity as a result of expanded extraction.