Natural Gas Providing “Strong as Steel” Jobs!
All over the internet we read about new industries, or existing industries, booming because of natural gas development. A few examples of this are hotels, and the steel and manufacturing industries to name a few. It’s no secret the manufacturing industry, including the former steel giants of southwestern Pennsylvania, have been struggling for decades. Now after a long struggle and decline there is a light at the end of the tunnel and that light is powered by natural gas. Let’s examine some of the success stories, beginning with some general observations from a recent article on the subject in TheHill.com.
Domestic natural gas holds the potential to yield revolutionary economic and energy benefits for the United States. Fully developing our natural gas resources from the shale formations across the country will provide low-cost and reliable sources of energy that will boost our competitiveness, and spur an American manufacturing renaissance which the steel industry, with its ripple effect throughout the supply chain, is helping to lead.
And, here are the specifics …
The U.S. steel industry is gaining jobs and market share after struggling for the past few decades. Companies selling steel to the natural gas industry are now profiting enough to expand again, in fact. Natural gas companies are using steel for everything from casing to pipelines, plus the availability of natural gas is making steel manufacturing more economical and competitive in the United States. It’s a double-sided benefit for the steel business, which is now hiring again.
America’s steel industry, for decades a symbol of industrial decline, is betting on natural gas to make it more competitive against foreign producers. U.S. Steel Corp. and Nucor Inc., the two largest U.S. steel producers, are changing their traditional manufacturing processes as relatively cheap domestic natural gas supplies become more plentiful. Some experts believe the new techniques will not only allow steelmakers to cut costs and lower selling prices at home, but also give U.S. companies a chance to compete with Japanese, South Korean and European rivals for a slice of the export pie. ‘Gas is very positive for steel; it really lowers the cost of the product,’ said Michael Locker of Locker Associates, a consultant for steel companies. (Moneynews.com)
So what does the steel industry mean for America outside the opportunity to export? Take a look at the number of jobs that could be created through the industry and then let’s take it a step farther; what does the steel industry do indirectly for other industries?
According to a recent report released by Professor Timothy Considine, an energy economist at the University of Wyoming, the U.S. steel industry supports more than one million jobs in the U.S. economy. For every job formed in the steel industry, seven additional jobs are created in other economic sectors. For that reason, the steel sector has played an outsized role in driving manufacturing’s post-recession resurgence.
Despite this encouraging analysis, the U.S. manufacturing sector still faces significant challenges including energy cost uncertainty. As an energy-intensive industry, the domestic steel industry’s international competitiveness depends on our ability to capitalize on the discovery and development of North America’s shale resources. Our industry consumes large amounts of natural gas, and will benefit from the increased supply resulting from shale production, which keeps gas both reliable and available at a low cost. (TheHill.com)
what does the steel industry do indirectly for other industries? According to a recent report released by Professor Timothy Considine, an energy economist at the University of Wyoming, the U.S. steel industry supports more than one million jobs in the U.S. economy. For every job formed in the steel industry, seven additional jobs are created in other economic sectors.
It isn’t just the Pennsylvania steel industry that’s on the rebound. Take a look over the border at what’s happening in Ohio.
In the steel industry, which supports over 115,000 jobs in Ohio, companies are already making substantial new capital investments and creating high-value jobs in the state as a result of shale natural gas production. And developing our natural shale resources is not just creating jobs within the steel industry. Because of our industry’s jobs multiplier effect, it is creating thousands of jobs in the manufacturing sector.” (TheHill.com)
Other American manufacturing industry sectors have also seen some hard times in recent decades. The natural gas industry is helping to pick them up as well. Jobs are being created daily and it will only be increasing from here!
Domestic manufacturing has taken a nosedive in the past few decades, as a tour of some of the most economically depressed areas in the Rust Belt attests. By most accounts, public opinion on the overall state of U.S. energy is similarly bleak. About 71 percent of those surveyed in a recent CNN/ORC poll say high gasoline prices have caused financial hardship.
However, it’s not all bad news on the energy front. Thanks to an innovative drilling technology called hydraulic fracturing, energy producers are able to extract previously inaccessible deposits of shale gas; and domestic manufacturers that purchase this fuel now have a cost advantage with one of shale’s byproducts, polyethylene. The most common form of plastic, polyethylene is used in countless finished goods, primarily in containers and other packaging. Considering that in 2010 the United States imported $264 million worth of plastic goods from China, any cost advantage American manufacturers can gain with plastic is a good one. (TimesLeader.com)
The money produced from natural gas development can, again as I mentioned before, move throughout several industries and below is another example. On top of that, read carefully the number of manufacturing jobs American’s have an opportunity to pursue as a result of natural gas development.
“Shale gas production similarly can spur construction of plants that buy natural gas for fuel or as raw material to make chemicals, plastics, fertilizer, steel and other products. A report by PricewaterhouseCoopers, LLC estimated that such investments create 1 million U.S. manufacturing jobs over the next 15 years. PricewaterhouseCoopers also predicts that shale gas development could add approximately 1 million jobs by 2025, encourage greater investments in U.S. plants and reduce U.S. manufacturers’ natural gas expenses by as much as $11.6 billion annually through 2025.” (Mike Mikus, TimesLeader.com)
And, we absolutely cannot forget the new “cracker” plant Shell is expected to build in Pennsylvania and what that will mean for local economies.
Canonsburg, PA – Marcellus Shale Coalition president Kathryn Klaber issued the following statement on Shell Chemical’s announcement that it will move forward with evaluating a location for a potential ethane cracker in Beaver County, Pennsylvania:
Today’s announcement by Shell is a win-win for the region’s workforce and economy and further demonstrates the tremendous resource contained in both the Marcellus and Utica shale. While located in Pennsylvania, the supply chain and potential economic impact of this project will span the multi-state region while serving as an anchor in the resurgence of the domestic manufacturing sector.
As a Beaver County native, it’s particularly gratifying to see that the economic revitalization of the river communities may be just around the corner. This announcement is further indication of the Commonwealth of Pennsylvania and Governor Corbett’s continued work to responsibly develop the Marcellus and expand broad-based economic benefits for all. This is certainly an exciting day for the natural gas industry, this region and the nation.
Hotels everywhere throughout the natural gas region are booming. Natural gas industry workers stay at numerous hotels throughout Pennsylvania and New York. Even though Marcellus Shale development isn’t happening in New York yet, hotels there are booking rooms each night for people working in Pennsylvania. Hotels are so pleased with the increased business opportunities, one is actually now involved in a lawsuit against the City of Binghamton for banning natural gas exploration.
Here is Maureen Dispenza of the Wyoming County (Pennsylvania) Chamber of Commerce discussing new hotels in her community, as well as other business growth generated thanks to the natural gas industry.
Natural gas doesn’t just provide jobs for natural gas industry workers. Other industries throughout the country are benefitting from natural gas development and will only continue to expand as we develop this resource. Sadly, America has witnessed several industries starting to fall, including steel and manufacturing but their is proven salvation in natural gas. The safe and responsible development of this resource can get even more Americans working and save industries nationwide. Maybe we can even grow our exports to compete globally in this ever changing world economy.