The impact of fossil energy technological progress on sectoral implied energy intensity: Evidence from the U.S. shale gas revolution

This paper investigates how sectoral implied energy intensity responds to energy technology progress, using the U.S. shale gas revolution—the most significant energy breakthrough of the 21st century—as a quasi-natural experiment. Using industry-level input-output and trade data, we implement a difference-in-differences (DID) strategy to identify the effects. We find that the shale revolution, on average, increases sectoral implied energy intensity in countries with higher natural gas import demand. The results are robust to alternative specifications, multiple fixed effects, parallel-trend checks, and placebo tests. Mechanism analysis suggests that the rise in implied energy intensity is driven by increased natural gas imports and intensified competition among gas-exporting countries. Heterogeneity analysis further reveals that skill-intensive sectors, transportation, public services, and environmental industries are more responsive to the shale gas technology shock. These findings underscore the spillover effects of the revolution not only on global trade patterns but also on sectoral energy use, highlighting the need for enhanced coordination in energy technology development and energy security strategies.