Saturday, 12 January 2013

Shale gas is fueling a manufacturing boom in the US

Shale gas is fueling a manufacturing boom in the US, luring back chemical producers, which previously abandoned the country in droves:

The plummeting price of natural gas, which can be used to make a vast number of products, including tires, carpet, antifreeze, lubricants, cloth, and many types of plastic, is luring key industries to the United States. Just five years ago, natural gas prices were so high that some chemicals manufacturers were shutting down operations here. Now the ability to access natural gas trapped in shale rock formations, using technologies such as hydraulic fracturing and horizontal drilling, has led to a surge in natural gas supplies that have lowered American gas prices to a fraction of prices in other countries (see “King Natural Gas”). --

The impact of cheap natural gas on manufacturing could extend beyond the production of various chemicals. Using natural gas as an energy source, rather than a chemical feedstock, could significantly lower costs for manufacturers who use a lot of energy, such as steel makers. (The steel industry is booming already for another natural gas-related reason—it’s supplying gas producers with pipes.) What’s more, cheap natural gas is prompting a shift away from petroleum based-fuels for trucking. Some companies are switching to trucks that burn natural gas directly. Eventually, even diesel trucks could be using fuel made from natural gas. The South African company Sasol plans to build a huge $14 billion plant in Louisiana partly to convert natural gas to diesel, potentially lowering fuel costs for conventional vehicles as well.

Overall, cheaper chemicals, cheaper steel, and cheaper transportation could make the U.S. a far more attractive place for a wide range of industries.

Read the entire article here

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