A new study from IHS underlines the extent by which the shale oil and gas boom is cutting the U.S. trade deficit and boosting America’s position in the global manufacturing hierarchy.

According to the study, the shale explosion is transforming America’s trade position by reducing the need for imported energy while concurrently enhancing the competitiveness—and thus the export viability—of U.S. manufacturing companies that operate in energy-intensive sectors.

The study projects that the shale boom will result in a reduction in the U.S. trade deficit of more than $164 billion by 2020. That figure represents a third of the nation’s current trade deficit.

“The unconventional oil and gas revolution is not only an energy story; it's also a very big economic story that flows throughout the U.S. economy in a way that is only now becoming apparent,” IHS Vice Chairman Daniel Yergin said. “In addition to significant job and economic impacts from the energy production and its extensive supply chains, the growth of long-term, low-cost energy supplies is benefiting households and helping to revitalize U.S. manufacturing, creating a competitive advantage for U.S. industry and for the United States itself.”