Appalachian Basin

Plastic and Fertilizer Manufacturing Booms, Thanks to Shale

From fertilizer to plastic, shale gas development continues to fuel American manufacturing and create family sustaining jobs. As EID has noted many times, the price of natural gas remains low because of prolific shale plays being developed across the country.  That, in turn, is fueling large growth for energy-intensive industries like the fertilizer industry.

Prior to the shale revolution here in the United States, nitrogen fertilizer, the most common fertilizer used by farmers across the country,  was imported from other countries that had access to affordable natural gas. According to a report by CRA International:

“An unstable U.S. fertilizer supply would introduce significant risk not just to U.S. agriculture but, by extension, to the entire world food supply. There is economic value in the continued presence of a U.S.-based nitrogenous fertilizer manufacturing industry to the extent that it minimizes reliance on global sources that may one day prove unreliable.” (Pg.20)

Today, because of the shale revolution here in the United States, the fertilizer industry is seeing huge savings in its manufacturing process. Because of this, the domestic fertilizer industry is currently experiencing its largest growth in 25 years. According to the Fertilizer institute:

“Low-cost gas selling for $2.76 per million British thermal units — down 40 percent from last year’s prices and well below the $9 it cost in 2003 — has invigorated the fertilizer manufacturing industry across the Midwest and Southeast, with more than 35 fertilizer plants proposed or recently brought online.”

These savings in the manufacturing process are being passed on to farmers, which is helping to lower their annual costs.

This is a trend we’ve been seeing for years now with other energy intensive industries like plastic. Thanks to abundant affordable natural gas the plastic industry has not only recovered from the recession, but it’s expected to grow by more than 20 percent over the next decade. According to Steve Russell, vice president of the American Chemistry Council’s plastic division:

“The ready availability of large amounts of natural gas is giving the U.S. plastics industry really a renaissance, turning it from among the highest-cost producers to one of the lowest in the world, increasing manufacturing in the United States, increasing exports to markets that we were not exporting to before, and along with all that comes jobs.”

Hydraulic fracturing has been creating family sustaining jobs in states that support the development of their shale resources. Now, as the natural gas developed here in the Commonwealth makes its way to manufacturing plants across the U.S. we’re witnessing a renaissance in American manufacturing. Dave Taylor, President of the Pennsylvania Manufacturers Association President recently stated that Pennsylvania’s natural gas revolution is a “one-two punch for manufacturing competiveness.”

That’s something we can all celebrate.


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