ICYMI: Shale Gas “Firing up an Old-Fashioned American Industrial Revival,” “Saving U.S. Consumers Billions”

TD Report: Growth in Shale Gas Saving U.S. Consumers Billions
By Lauren Krugel, Canadian Press
November 15, 2012

Growing U.S. shale gas output means billions in cost savings for residential and industrial consumers, according to a report by TD Bank released Thursday. Technological advances have unlocked enormous supplies of natural gas from rock formations across the United States, keeping the price suppressed at around $3.50 per 1,000 cubic feet. The same fuel, by contrast, fetches around $12 in Europe and $16 in Asia. The TD economists say the U.S. price would be in the $10 to $12 range if not for burgeoning production in places such as Texas and Pennsylvania.

American residential consumers can expect to save around $75 billion in utility costs in 2013 — equivalent to about $650 per household — assuming prices average $3.75 over the next year. Just over half of U.S. homes are heated with natural gas, which is also used to run appliances like stoves and water heaters. … Across the entire manufacturing sector, TD says $50 billion can be shaved off energy input costs annually.

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The New Boom: Shale Gas Fueling an American Industrial Revival
By Steven Mufson, Washington Post
November 14, 2012

The shale gas revolution is firing up an old-fashioned American industrial revival, breathing life into businesses such as petrochemicals and glass, steel and toys. … Across the country, companies are crediting the sudden abundance of cheap natural gas for revving up their U.S. operations. Thanks to new applications of drilling technology to unlock natural gas trapped in shale rock, the nation’s output has surged and energy experts almost unanimously forecast that prices will remain low or moderate for a generation. The International Energy Agency says that by 2015, the United States will overtake Russia as the world’s biggest gas producer. … “It has become clear to me that the responsible development of our nation’s extensive recoverable oil and natural gas resources has the potential to be the once-in-a-lifetime economic engine that coal was nearly 200 years ago,” U.S. Steel Chairman John Surma said in a speech this year. … “For the foreseeable future, thanks to the recovery of vast U.S. underground gas deposits of shale, natural gas is likely to remain 50 to 70 percent cheaper in the U.S. than in Europe and Japan,” said a recent report by the Boston Consulting Group.

For decades, most of the conversation about U.S. oil and natural gas has revolved around the idea of scarcity, declining output and rising prices. … But past assumptions have been challenged by new technologies — and new uses of old technology. … Natural gas production has jumped to record levels. In 2000, shale gas was 2 percent of the U.S. natural gas supply; by 2012, it was 37 percent.

After years of losing manufacturing jobs, most American communities are vying to lure industries. … Royal Dutch Shell has unveiled plans for a $2 billion petrochemical plant northwest of Pittsburgh, where it can use natural gas supplies from the state’s enormous Marcellus shale formation. … The economic growth from natural gas abundance extends to companies providing supplies to the drilling boom. … U.S. Steel is churning out new pipe for natural gas drilling rigs, wells and pipelines. And as a big consumer of power, it is paying less for fuel. Surma, U.S. Steel’s chief executive, said in a speech recently that the company used 100 billion cubic feet of natural gas in 2011, “so just a few dollars’ difference in the price…allows us to realize important and significant cost savings.” … “In addition to these kinds of cost savings opportunities, natural gas should provide North American steelmakers with another operating advantage over our foreign competitors,” Surma said. Once some of these basic industries come home, companies further down the value chain could return, too. “If you make plastics in the United States, there are a bunch of things produced in China that might tip back to being produced in the U.S.,” said Harold L. Sirkin, a senior partner at the Boston Consulting Group.

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