The Impact of China's Shale Gas Extraction on Sichuan's Economy— An Analysis Based on DID Method

Abstract

Shale gas revolution has changed the world's energy pattern since 2000. China’s technology recoverable resources rank second in the world. What’s the effect of shale gas extraction in China? This paper used the improved PSM-DID method to do quantitative analysis on the economic growth effect of shale gas mining in Sichuan Basin. By using the double difference method (DID), it is find that shale gas mining has brought about 6.9% per capita GDP growth to local economy from 2004 to 2015. After eliminating the economic differences between mining area and unexploited area using PSM-DID method, the net effect of mining on economic growth still stands at 4.2%.Finally the paper compared and analysed the shale gas extraction effect on three states in U.S.A. It is the first quantitative analysis on the economic effect of shale gas extraction in China. Therefore, the government should set shale gas industry at the strategic position and strengthen the implementation of supporting policies.