The Impact of the Shale Gas Revolution

By November 2, 2012Energy

Natural gas from shale formations continues to have a positive impact on the economy and provide manufacturers with an affordable and reliable supply of energy.  Shale gas continues to influence manufacturers’ decisions to expand operations in the United States.

For example, on November 1st, CF Industries announced the expansion of their manufacturing facilities in Donaldsonville, Louisiana and Port Neal, Iowa.  CF Industries is a global leader in the manufacturing and distribution of nitrogen and phosphate products, serving both agricultural and industrial customers. They plan to spend $3.8 billion on two projects which will create hundreds of new jobs to both states. 

CF Industries will invest $2.1 billion at their Donaldsonville facility, which is expected to create 93 direct jobs and approximately 700 indirect jobs.  They will invest another $1.7 billion at the Port Neal facility, which is estimated to create 100 direct jobs and approximately 700 indirect jobs. The direct jobs will be at an average starting annual salary of $55,000, increasing to $85,000 per year when employees become fully certified. The company expects that as many as 3,400 construction jobs will be filled as these projects progress. These projects will create about 200 direct jobs, 1,400 indirect jobs and thousands of construction jobs.

Late last year the NAM and PwC published a study that considered the impact of shale gas on the economy and manufacturers. This study estimated that robust development of the nation’s vast shale gas resources would create 1 million new manufacturing jobs by 2025 and help usher in a renaissance for U.S. manufacturers. The lower feedstock and energy costs from shale gas would help manufacturers in the U.S. compete in the global marketplace at a level impossible prior to the shale gas revolution. 

Last week at an API “Vote Energy” event Ross Eisenberg, NAM’s VP of Energy and Resources Policy, participated in a panel discussion about the impact of natural gas on manufacturers. In response to a question Ross said, “We will continue to see the positive impact of shale gas in the manufacturing sector over the next several years. Clearly it has helped the petrochemical industry but we are also seeing its impact on iron and steel and fertilizer sectors, as well as other energy-intensive industries.” This announcement by CF industries is another indication of the impact shale gas is having on manufacturers in the U.S. and the economy. With the right policies and an “all-of-the-above” energy strategy manufacturers will be able to help drive our economic recovery and create more jobs.

Chip Yost is assistant vice president of energy and resources policy, National Assocation of Manufacturers.

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