What has Shale Gas Done for American Manufacturing?

A lot. We’ve seen the impact on lower manufacturing costs and increased employment but a new report from Pricewaterhouse Coopers (PWC) finds the positive benefits of the “shale effect” may be greater than anyone realized.

Because of the increases in shale gas production the energy landscape has tilted in our favor. The reduction in energy costs has helped fuel the resurgence in the manufacturing sector. This new report revised previous estimates on the benefits of shale gas to the manufacturing landscape and the news is even better: Shale gas should continue to have a positive effect on the U.S. manufacturing industry for years to come.

PWC’s report titled “Shale Gas: Still a boon to US manufacturing?” finds that if natural gas prices stay low because of increased shale gas resources, U.S. manufacturers could save over $22 billion by the year 2030 and $34.1 billion in 2040.

The industries seeing the biggest benefits are expected to be chemical and metal companies. The chemical companies see affordable feedstock and low natural gas prices driving investments in expansions and new facilities. Metal companies and industrial manufacturers see demand for products and equipment rising to meet the needs of natural gas production while they are also benefitting from lower energy prices.

Continued shale gas activity is expected to continue to grow new jobs. By 2030 the estimate for shale gas driven jobs is expected to be 930,000 by 2030 and 1.41 million by 2040. The natural gas boom is improving manufacturing and driving job growth.

Shale gas recovery is fueling a manufacturing resurgence with lower energy costs, higher product demand, and an increase in new jobs. As PWC revised its 2011 estimates, the trend is still heading upward. And, if infrastructure building increases to support the natural gas industry, additional benefits will be realized by the manufacturing sector.

The full PWC report can be downloaded here.

Resources:

http://www.pwc.com/en_US/us/industrial-products/publications/assets/shale-gas-boosts-us-manufacturing.pdf

http://www.bizjournals.com/pittsburgh/blog/innovation/2014/12/shale-effect-saving-manufacturers-more-money.html

Categories: American Manufacturing, News