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Thursday, March 29, 2012

Unintended Consequences of Volcker Rule on Energy Markets

Yesterday, IHS CERA, an information and analytics provider, released a report The Volcker Rule: Impact on the U.S. Energy Industry and Economy. As the Volcker Rule is currently proposed implementing such regulations could adversely impact energy markets, raising the cost of energy and increasing market volatility according to the report.

The report examines the impact on segments of the energy industry if the services that rely on US banks were to be curtailed through the implementation of the Volcker Rule.

The report suggests the impact of the Volcker Rule on the energy market could include a loss of 200,000 jobs; a loss of $34 billion (2005 dollars) in GDP on an annual basis from 2012-2016; a $7.5 billion reduction in natural gas; a cumulative rise in electricity costs of $5.3 billion per year; a 4-cent-per-gallon increase in East Coast gasoline prices; and a loss of $12 billion in federal tax receipts.

Read the full report.
Read the Executive Summary.

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