Appalachian Basin

*Update* Shale Development Continues to Fuel U.S. Manufacturing and STEM Jobs

UPDATE (2/2/2015; 5:54 pm ET): The National Association of Manufacturers President and CEO Jay Timmons delivered a 2015 state of Manufacturing Address to students, faculty and local manufacturing leaders at Perdue University in West Lafayette, Indiana. During the address Timmons discussed how shale development is supporting the expansion of American manufacturing across the country:

“Now, let’s take a look at energy, because the time is right—energy that fuels our success as manufacturers and as a country. This is a tremendous moment of great opportunity. America has an unprecedented and incredible global advantage in reliable and affordable energy, and it’s driving manufacturing’s resurgence.

If we’re going to keep building on our strength, and creating jobs with the potential that energy exports represent, an “all-of-the-above” energy approach that taps every resource we’re blessed with here at home is the only realistic choice. We can make the United States energy secure and North America energy independent. Manufacturers use one-third of the energy produced in America, so this is one of those problems we have a strong interest in solving. And shale gas is just one example of an opportunity we shouldn’t miss. If we use this resource right, we can create a million new American jobs over the next 10 to 15 years.” (Emphasis added)

Original post, January 30, 2015

A new report this week from the American Shale and Manufacturing Partnership (ASMP) highlighted the positive effect shale development is having on our manufacturing sector here in the United States. Since the beginning of the shale revolution, manufacturing giants – who once left the U.S. years ago – are now re-shoring their operations because of the United States’ ability to access affordable and abundant supplies of energy beneath our feet.

Some of the key passages of the report highlight how the shale revolution is pushing the manufacturing sector to new heights:

Shale development also has created an abundance of hydrocarbons called natural gas liquids (NGLs) which serve as starting feedstock’s and are converted into materials used in manufacturing. NGLs such as ethane, propane and butane are used in petrochemical manufacturing to produce advanced plastics, fibers, adhesives, coatings, cleaning agents and other materials needed throughout the manufacturing supply chain. (Pg. 5)

As stated earlier, because of the access to raw materials needed throughout the manufacturing process, operations are making their way back to the U.S. As the report puts it:

In addition, manufacturers who moved operations offshore over the past two decades are taking a fresh look at re-shoring. An expanded manufacturing base has the potential to transform the U.S. economy in a way that few things can, with impacts comparable to the Internet revolution of the late 1990s. (Pg. 4)

The study also emphasizes the positive impact the re-shoring of manufacturing is having on job growth in regions that have the ability to host this industry:

Critical to global competitiveness, manufacturing added over $2 trillion to the U.S. economy in 2013 and employs more than 12 million Americans. (Pg. 4)

The revitalization of states, cities and towns is underway and local communities able to host and support manufacturing operations are seeing higher-wage jobs. For employees, manufacturing investments mean new opportunities for the middle class and those in poverty, and improved well-being for individuals and families. (Pg. 5)

That’s actually something President Obama acknowledged last year during his trip to the Marcellus Shale region.  He stated:

“Our manufacturing sector that used to be losing jobs, just hemorrhaging jobs, is now adding jobs for the first time since the 1990s.”

With shale development fueling job growth in the manufacturing sector, the need for skilled workers is at an all-time high. The ASMP report highlighted the need for more science, technology education and math (STEM) programs in schools to supply this growing industry:

Creating general awareness of science, technology, engineering and mathematics (STEM) disciplines and fields will facilitate an understanding of the modern manufacturing and construction sectors. Targeted curricula and experiential learning can show how manufacturing and construction jobs require and use STEM knowledge and skills. This can lead to an awareness of the training required for specific jobs and promising careers. (Pg.8)

Lastly, the ASMP report looked at the positive environmental impacts of continued shale development emphasizing our shift to natural gas in electricity generation:

A highlight of the American manufacturing renaissance is growing domestic production of energy resources including shale development. The result is lower environmental impacts by manufacturers and electricity generation facilities. This is helping to achieve carbon dioxide emission levels that reached their lowest point in 2012 when compared to the past two decades; and, the United States is meeting or exceeding international targets for reduction of greenhouse gases. (Pg. 15)

Even after over a decade of development, the shale revolution still continues to paint a promising picture for American manufacturing across the country. And, according to a recent report from PricewaterhouseCooper’s (PWC) American manufacturing hasn’t even begun to peak. PWC estimates that shale development will provide an annual cost savings of $22.3 billion in 2030 and $34.1 billion in 2040 to the American manufacturing sector. As long as the U.S. continues to develop its shale resources we can expect this manufacturing renaissance to continue for years to come, providing hardworking Americans with meaningful jobs and the family sustaining wages.


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