New PwC Study: Safe Development of U.S. Shale Gas Bolstering Manufacturing

A new PricewaterhouseCoopers (PwC) study, released yesterday, highlights and further underscores the critical role that low-cost, clean-burning American natural gas continues to play in bolstering our nation’s manufacturing sector. Here are key excerpts from the PwC study, entitled “Shale gas: Reshaping the US chemicals industry”:

In a recent PwC report on the potential impact of shale gas on US manufacturing, it was stated that by 2025, shale gas could add more than 1 million workers to the US manufacturing industry and allow US manufacturers to lower their raw materials and energy costs by as much as $11.6 billion annually. … For chemical companies, the impact of shale gas has been to decrease the cost of both raw materials and energy.

Based on industry reports, we estimate that the US chemicals industry has invested $15 billion in ethylene production, increasing capacity by 33%. As these investments take hold, yielding more supply, the United States could become a major, global, low-cost provider of energy and feedstocks to the chemical industry.

Lower natural gas prices could provide a strong economic incentive for US manufacturers to reverse offshoring of manufacturing activity and build production facilities in the United States. Longer term, lower energy costs could help revive manufacturing in the United States and positively affect the competitive position of American manufacturing.

And here’s what they’re saying about the study:

  • American Chemistry Council says “Shale Gas is Spurring an American Manufacturing Renaissance”: “This week’s report reiterates the growing consensus that shale gas is spurring a renaissance in American manufacturing. The PwC report finds that for chemical manufacturers, and a wide range of other sectors of the American economy, natural gas has the potential to boost manufacturing competitiveness and spur new waves of economic investment,” said Cal Dooley, President and CEO of ACC. (Release, 10/9/12)
  • Shale Gas Hailed as “a Game-Changer” for Manufacturing: The shale gas boom could cut costs significantly for the chemical industry and ultimately benefit the apparel, electronics, machinery and other industries, according to a report released Tuesday. The report by PricewaterhouseCoopers US suggests cheap natural gas liquids could even prompt some companies to move production back to the United States. … “Here in the United States, it has been a game-changer and has created an opportunity for a lot of companies to make new investments in the United States, as opposed to overseas markets where natural gas has historically been cheaper,” [Hector Rivera, president and CEO of the Texas Chemical Council] said. … Anthony Scamuffa, U.S. Chemicals leader for Price-waterhouseCoopers, predicted that the effects of low-priced natural gas liquids will ripple through the manufacturing chain. (Houston Chronicle, 10/9/12)
  • “Shale Gas Could Lower U.S. Manufacturing Costs, Drive Re-Shoring”: “The positive impacts could flow through the value chain into other manufacturing sectors, particularly given that chemicals are used in an estimated 90 percent of all manufactured products,” said Anthony J. Scamuffa, U.S. Chemicals leader for PwC. “Not only could the abundance of NGLs help drive reduced pricing for derivative products, it could also potentially drive domestic re-shoring activity and possibly bring about a favorable shift in the U.S. balance of trade as ethylene capacity comes on line.” (MHLnews.com, 10/9/12)
  • American Natural Gas Boosting “US chemical industry”: Increased production of natural gas and natural gas liquids from US shale plays could make the US a global low-cost provider of energy and chemical feedstocks, PwC US said in a report released Tuesday. Shale gas could enable “US manufacturers to lower their raw materials and energy costs as much as $11.6 billion annually by 2025,” the report said. (Platts, 10/9/12)
  • “PwC: Expansion Of Shale Gas Market Bolstering Outlook For U.S. Chemicals Industry”: The expansion of the shale gas market could potentially drive significant benefits to the U.S. chemicals industry, including decreased raw material and energy costs, according to a new report released today by PwC US titled, Shale Gas: Reshaping the U.S. Chemicals Industry. In fact, another recent PwC report estimated that the potential impact of shale gas on U.S. manufacturing could enable U.S. manufacturers to lower their raw materials and energy costs as much as $11.6 billion annually by 2025. (Manufacturing.net, 10/9/12)

Have questions about how natural gas is produced from the Marcellus Shale and ultimately how this clean-burning, abundant American resource is used to power our economy, including our manufacturing sector? Visit LearnAboutShale.org, and join the online conversation using #LearnAboutShale.