New natural gas resources spark domestic industry

Industry expert describes developments

12/20/2013


Increasingly, we see evidence that recent expansion of natural gas resources and stable prices are encouraging industrial development in the U.S. and Canada. In some cases, industries with significant energy requirements are returning to North America from overseas locations. Ross Eisenberg is Vice President, Energy & Resources Policy for the National Association of Manufacturers, and he shares with us his thoughts on the influence of the recent natural gas expansion.

Already Underway131220PE_GT_u-s-gas-production-growing-(1)

Asked if he felt the increased resource base and moderate pricing of natural gas has the potential to increase the U.S. manufacturing base, he is emphatic. “Not only do we believe this will happen, we are already seeing it.” As examples, he cites a $750 million iron facility in Louisiana being developed by Nucor, and its $3 billion joint venture with Canadian oil and gas producer Encana for 20 years of access to its natural gas wells.

Other examples cited included a $2.1 billion expansion of fertilizer facilities by CF Industries, and another $1.4 nitrogen fertilizer facility being built by Orascom Construction Industries in Wever, Iowa. Eisenberg indicates there are many other examples of industrial startups or expansions that are directly tied to natural gas supply expansion.

Expanding Energy While Reducing Emissions

He notes, “At NAM we believe in an “all-of-the-above” energy resource policy, and natural gas is a major part of it.” Regarding greenhouse gas emissions, he says, “Through greater efficiency and fuel diversity, we’ve been able to make major reductions in our greenhouse gas emissions. We believe we should be focusing on developing the technologies necessary to continue to make these reductions rather that simply phasing our particular fuels.”

Chemicals Industries First Winners

Asked which industries could be most positively influenced by growing natural gas resources and their moderate cost, Eisenberg gives several examples. “To date, chemical manufacturers have been the largest beneficiaries, owing to less expensive ethane, a natural gas liquid derived from shale gas. Other energy intensive industries like fertilizer, iron & steel, aluminum, and plastics have begun to take advantage in recent years. We believe the next big step is going to be from the products that use natural gas-derived chemicals as building blocks.” As examples, he cites chlor-alkali used to make diverse products such as siding, pipe, flooring, coating and adhesives, toothpaste and cosmetics.  Other chemicals such as ethylene and propylene are used for many plastic products.

Contribute to Economic Health 

Eisenberg notes that global research firm IHS released a study finding that unconventional oil and gas activity already supports more than 2.1 million total jobs and has increased disposable income by $1,200 per U.S. household and added $284 billion to the U.S. gross domestic product in 2012.

He points out, “Thanks to newfound supply and price stability, manufacturers in the United States enjoy natural gas prices considerably lower than in China, India, Brazil, Japan and the United Kingdom.” Eisenberg explains that this is very important, because due to domestic tax, tort, and regulatory policies, it is now 20 percent more expensive to manufacture in the U.S. than any of its nine largest trading partners. He feels that the U.S. has a slight advantage with energy costs, and with the right policies, this advantage can grow.

Correct Policies Needed for Future

Finally, he cautions, “As bright as the future looks for energy in the U.S., we remain concerned that the wrong government policies can threaten manufacturers’ competitive advantage. So as bright as the future seems for energy, the right policies still matter.

MORE INFO:

Energy Solutions Center “Natural Gas in a Smart Energy Future”

Marcellus Shale Coalition, Reports on Shale Gas Development and Issues

U.S. Energy Information Administration Data on Natural Gas Resources



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Learn how to create value with re-use; gain productivity with lean automation and connectivity, and optimize panel design and construction.
Go deep: Automation tackles offshore oil challenges; Ethernet advice; Wireless robotics; Product exclusives; Digital edition exclusives
Lost in the gray scale? How to get effective HMIs; Best practices: Integrate old and new wireless systems; Smart software, networks; Service provider certifications
Fixing PID: Part 2: Tweaking controller strategy; Machine safety networks; Salary survey and career advice; Smart I/O architecture; Product exclusives
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Look at the basics of industrial wireless technologies, wireless concepts, wireless standards, and wireless best practices with Daniel E. Capano of Diversified Technical Services Inc.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.