IMPACT OF HIGHER NATURAL GAS PRICES ON THE NORTHEAST REGIONAL ECONOMY

This paper examines the impact of higher natural gas prices on the Northeast regional economy. While there is a common belief that higher gas prices will further disadvantage the already high-energy-cost Northeast, recent analysis suggests the opposite conclusion. Simply stated, by virtue of using relatively little natural gas, industry in the Northeast will likely experience an improvement in its competitiveness as gas prices rise; at the same time, the region could contribute relatively little to the higher revenues for gas producers. In contrast, by virtue of high population, high income, political strength, and improved competitiveness, the region will likely receive at least its proportionate share of these revenues as they are recycled throughout the national economy