shale gas Archives - Shopfloor

The Impact of the Shale Gas Revolution

By | Energy | No Comments

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. Read More

Shell to Build Ethylene Cracker Plant in Pennsylvania

By | Energy | No Comments

Today Shell Oil Co. has announced that they will build a major multi-billion-dollar petrochemical refinery near Pittsburgh, PA which will provide jobs and a boost to the local economy. The site is in Monaca which is about 35 miles northwest of Pittsburgh.

The plant is going to be an ethylene cracker plant which converts natural gas liquids into other chemicals which can be used to manufacture products such as tires or antifreeze. Shell plans to invest several billion in the construction of the facility which will create jobs during its construction and operation. This is positive news for manufacturers as more and more companies are investing in natural gas and shale revolution taking place.

A study released late last  by PwC and the NAM estimated that the continued development of shale gas could create up to one million manufacturing jobs in the United States by 2025. Investments such as is a great example of the tremendous benefits of shale gas to manufacturers and job creation.

Interior Sends Fracking Regs to the White House

By | Energy | No Comments

This week the Secretary Salazar, Department of Interior (DOI), sent proposed draft regulations to the White House on hydraulic fracturing activity on federal lands. Typically the regulation of oil and gas development has been the domain of the states. However, in this case Secretary Salazar felt compelled to provide the states with model regulations.

Deputy Interior Secretary David Hayes explained that these new regulations would be compatible with existing regulations in Texas, Wyoming and other states. This statement begs the question, if Interior’s proposed regulations are going to be compatible with current state regulations why do they feel the need to draft these regulations in the first place?

The regulations in Texas, Wyoming, Colorado and Pennsylvania are all fine blue prints that other states can follow – they don’t need the DOI to create new federal regulations! The proposed draft regulations are reported to require disclosure of the chemicals used in the fracturing process and likely do not provide companies with adequate protection of confidential business information (CBI).

President Obama said in his State of the Union Address that he wanted to pursue an “all-of-the-above” energy strategy. That strategy needs to include the development of natural gas and fracking. According to a study by PwC and the NAM shale gas development can create more than a million manufacturing jobs in the next ten years.

The shale gas revolution has already created thousands of new jobs and revitalized a number of communities across the United States. The supply of natural gas has been a boon to manufacturers that use natural gas as a feed stock and as a fuel, but this Administration appears set on slowing domestic natural gas production. Three agencies are looking for ways to regulate shale gas: EPA, DOE and DOI. If this Administration is allowed to regulate hydraulic fracturing in the manner they desire, you can be sure that our abundant domestic supply of natural gas will greatly diminish.

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

Will 2012 Be Another Big Year for Shale?

By | Around the States, Energy | One Comment

On the energy front, one of the biggest stories of 2011 was the development of shale gas.  And, if the current trends continue, it will likely be the story of 2012 as well.

The Wall Street Journal reports,

The boom in low-cost natural gas obtained from shale is driving investment in plants that use gas for fuel or as a raw material, setting off a race by states to attract such factories and the jobs they create.

Recently, natural gas prices have plummeted.  “Because electric utilities often burn gas,” the Journal notes, “that price drop has helped bring down average electricity costs.

That’s a big deal for manufacturers, which consume one-third of the energy produced in this country. Lower energy prices make manufacturers more competitive and help offset other areas where manufacturers in the country are at a disadvantage compared to our competitors.

The shale boom’s impact on manufacturing was highlighted in a recent report completed by PricewaterhouseCoopers and released jointly with the National Association of Manufacturers.

The report shows that shale development means more investment in our economy, lower energy prices and one million more jobs by 2025.

Different Attitudes Toward Energy, Different Results

By | Economy, Energy | No Comments

Bloomberg, “North Dakota Passes Oklahoma in Drilling Rigs as Baker Hughes Count Rises“: “North Dakota overtook Oklahoma this week as the third-most active state in drilling for oil and natural gas, according to data published by Baker Hughes Inc. The number of North Dakota rigs exploring for and producing oil and gas jumped by two to 128, Baker Hughes said.”

Job Service North Dakota, July 20, “North Dakota’s Unemployment Rate 4.1% for June“: “Job Service North Dakota (JSND) reported that labor statistics released today show North Dakota’s June not seasonally adjusted unemployment rate was 4.1 percent. The rate is 0.9 percentage points higher than May (3.2 percent), and 0.6 percentage points below the same period of prior year (4.7 percent).”

Job Service North Dakota, August 2, “Oilfield Jobs in North Dakota”: “Looking for work in the oil industry? lick on this article for an overview of the industry, wage information, frequently asked questions, and more.”

Bloomberg, August 3, “New York Weighs State Drilling Ban on Natural Gas From Shale“: “Aug. 3 (Bloomberg) — Companies led by Chesapeake Energy Corp. would be banned temporarily from drilling for natural gas in shale in New York under state legislation proposed because of disputes over environmental risks.”

New York State Department of Labor, July 15, Unemployment Rate Dropped to 8.2% in June, Lowest Since April ’09“: “New York State’s seasonally adjusted unemployment rate dropped from 8.3% in May to 8.2% in June 2010, the State Labor Department reported today. This was the state’s lowest unemployment rate since April 2009, when it was 8.1%. …New York State’s economy lost 8,500 private sector jobs (-0.1%) in June 2010, on a seasonally adjusted basis. This was the state’s second straight monthly decline in private sector jobs.”

Transformation and Reality: Energy and the Economy, 2035

By | Economy, Energy, Global Warming, Taxation | No Comments

In conjunction with President Obama’s visit to a Home Depot Tuesday to promote retrofitting and energy conservation, Vice President Joe Biden submitted a memo to the President, “Progress Report:  The Transformation to A Clean Energy Economy.” One presumes the memo also serves as a backgrounder for the Vice President’s meeting today with manufacturing executives.

For all the talk of energy and economic transformation, it’s best to remain grounded in reality. On Monday, the U.S. Energy Information Administration (EIA) released its draft Annual Energy Outlook 2010 (AEO2010) presenting updated projections for U.S. energy consumption and production through 2035.

Excerpts from the news release:

Moderate Energy Consumption Growth and Greater Use of Renewables:  Total primary energy consumption grows by 14 percent between 2008 and 2035, as the fossil fuel share of total U.S. energy consumption falls from 84 percent to 78 percent (Figure 1). 

Declining Reliance on Imported Liquid Fuels:  Total U.S. consumption of liquid fuels, including both fossil liquids and biofuels, grows from 19 million barrels per day in 2008 to 22 million barrels per day in 2035. Biofuels account for all of the growth, as consumption of petroleum-based liquids is essentially flat.  As a result, reliance on imported oil declines significantly over the next 25 years (Figure 2).

Shale Gas Drives Growth in Natural Gas Production and Reduces Reliance on Imported Gas:  Total domestic natural gas production grows from 20.6 trillion cubic feet in 2008 to 23.3 trillion cubic feet in 2035. With technology improvements and rising natural gas prices, natural gas production from shale grows to 6 trillion cubic feet in 2035, more than offsetting declines in conventional production (Figure 3).

Energy-Related Carbon Dioxide (CO2) Emissions Continue to Grow, Assuming No New Policies:  CO2 emissions from energy grow at 0.3 percent per year, assuming no new policies to reduce energy-related CO2 emissions.  Total energy-related CO2 emissions grow from 5,814 million metric tons in 2008 to 6,320 million metric tons in 2035, although per capita emissions fall by 0.6 percent per yearMost of the CO2 growth in the AEO2010 reference case is accounted for by the electric power and transportation sectors (Figure 4).

So fossil fuel use will remain essential for U.S. economic growth.

For the EIA’s full presentation go here.