Appalachian Basin

Shale Paints a Promising Picture for U.S. Manufacturing

Over the last decade American shale development has made the United States into an energy super power, surpassing Russia as the world’s largest natural gas producer in 2010, and is projected to surpass Saudi Arabia as the global leader in oil production by 2015. This exponential production has brought vast benefits to American consumers, especially when it comes to American manufacturing. A new report released this week from PricewaterhouseCooper’s (PWC) looked at shale development and how it’s been a boon to future growth in domestic manufacturing.

The PWC study was put together with contributions from the National Association of Manufacturers and the American Chemistry Council, examining how shale development will shape the growth of American manufacturing for the next 20 years. Energy In Depth has previously highlighted how shale development has affected domestic manufacturing, and a report from the U.S. Conference of Mayors reiterated this, stating:

“From 2010 to 2012, energy intensive manufacturing sectors added over 196,000 jobs and increased real sales by $124 billion in the nation’s metro areas.”

With natural gas reserves continuing to rise here in the Marcellus, American manufacturing has the potential to grow for decades to come. According to the PWC study, shale development could have the following impacts on U.S. manufacturing overall:

  • Annual cost savings of $22.3 billion in 2030 and $34.1 billion in 2040.
  • 930,000 shale gas-driven manufacturing jobs created by 2030 and 1.41 million by 2040.

Some of the most important resources being developed are right here in the Appalachian region. The development of natural gas liquids has provided chemical companies with affordable feedstock and low natural gas prices, which are helping drive investments in expansions and new facilities by companies in this sector. As stated in the PWC report:

“We see pockets of higher job growth existing in the regions of shale gas production, particularly the Marcellus basin and Gulf Coast, where natural gas prices tend to be lower because of the lower gas distribution costs.” (p. 7)

Shale development has also given a new demand for products used during actual development and because of that American companies are now expanding to meet these new demands. From the PWC report:

“Metals companies and industrial manufacturers are benefiting from the rising demand for products and equipment needed for the extraction, distribution, storage, and processing of natural gas. Energy-intensive manufacturing sectors, such as metals and cement, may continue to benefit from relatively low energy prices.” (p. 6)

The ripple effects from shale development are almost as impressive as the technology itself. It’s amazing to think that, just a few years ago, most people believed that manufacturers companies might never move their operations back to the United States. Now we’re seeing growth in American manufacturing – and it’s largely thanks to the abundant and affordable resources unlocked by technologies like hydraulic fracturing and horizontal drilling.

If you haven’t already, be sure to check out EID’s video – U.S. Shale Brings Manufacturing Back to America.

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