What They’re Saying: American “Natural Gas Gives New Hope to the Rust Belt”

Pittsburgh, Pa. – As more American natural gas is safely produced here at home, our region’s economy and nation’s energy security and global competiveness continues to get stronger by the day. From a geopolitical perspective, as the Wall Street Journal reports, “Russia had designs on accessing the North American natural-gas market until rising U.S. shale-gas production enabled the U.S. to replace Russia as the world’s largest gas producer in 2009.” And in terms of economic growth and job creation, the responsible development of domestic natural gas is Powering an American Renaissance. Here’s what they’re saying:

  • “Cheap Natural Gas Gives New Hope to the Rust Belt”: Three decades after being devastated by the closing of steel mills, this gritty river valley is hoping its revival will come from cheap natural gas. … The benefits of cheap gas…have turned the U.S. into one of the most profitable places in the world to make chemicals and fertilizer, industries that use gas as both a feedstock and an energy source. And they have slashed costs for makers of energy-intensive products such as aluminum, steel and glass. “The U.S. is now going to be the low-cost industrialized country for energy,” the energy economist Philip Verleger says. “This creates a base for stronger economic growth in the United States than the rest of the industrialized world.” … In the rundown former steel towns along the Ohio River, natural gas is spurring hopes of an industrial renaissance. … Penna Flame Industries…is benefiting from cheaper energy. Inside the company’s roadside headquarters, propane-fired torches throw off bright orange flames as they heat metal parts like gears or wheels to more than 1,500 degrees Fahrenheit, to harden the surfaces. Truck-size ovens run 20 hours a day, burning as much as a million cubic feet of gas per month. Falling prices have cut the family-owned company’s monthly gas bill to between $3,000 and $4,000 per month from as much as $10,000 in 2008. Profits are up. … Chemical plants, oil refineries and the factories that use [natural gas] products can last for decades. (Wall Street Journal, 10/23/12)
  • “Reports: Marcellus Reserves Larger Than Expected”: Two independent financial firms say the Marcellus isn’t just the biggest natural gas field in the country — it’s the cheapest place for energy companies to drill. One of the reports adds that the Marcellus reserves that lie below parts of Pennsylvania, West Virginia, Ohio and New York are far larger than recent government estimates, while another said the powerful combination of resource, cost and location is altering natural gas prices and market trends across the nation. The Marcellus could contain “almost half of the current proven natural gas reserves in the U.S,” a report from Standard & Poor’s issued this week said. Another recent report from ITG Investment Research, a worldwide financial firm based in New York, found that a detailed analysis of Marcellus well production data suggested that federal government estimates of its reserves “are grossly understated.” (Associated Press, 10/20/12)
  • Daniel Yergin: “The Real Stimulus: Low-Cost Natural Gas”: Shale gas alone is now 10% of the overall U.S. energy supply. … So far more than 1.7 million jobs are the result, according to a report titled “America’s New Energy Future,” released Tuesday by my research firm, IHS. … The number of jobs could rise to three million by 2020. The energy revolution will add an estimated $62 billion to federal and state revenues this year. … The growth of shale gas will save the U.S. from spending $100 billion a year on imported LNG, which was the likely prospect five years ago. … Domestically, growing natural gas supplies provide a foundation for a manufacturing renaissance. … Chemical companies…are planning to invest billions of dollars in new factories in this country because of inexpensive and relatively stable natural gas prices. … The rapid growth of oil and natural gas production represents a major opportunity for the U.S. Without these energy resources, the disappointing economic picture would look worse, and so would the jobs numbers. Instead, the energy revolution is helping revitalize the economy and make the U.S. more competitive in the global marketplace. (Wall Street Journal op-ed, 10/22/12)

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  • American Oil, Natural Gas Job Creation Soaring: A new survey today says while the labor market continues to improve slowly, several sectors and parts of the country have been booming in the past three years. “Drilling crude petroleum, natural gas extraction, natural gas production: all those are up well over 20 percent,” says Jennifer Grasz of CareerBuilder. (ABC News, 10/24/12)
  • Marcellus Shale Fueling Growth for Local, Family-Owned Company: A Belle Vernon-based petroleum distributor has come a long way from a single gas station in McKeesport in 1931. The family-owned Guttman Group — parent to three companies involved in sales, delivery and storage of gasoline, diesel and other petroleum products — grew to more than $3 billion in annual sales last year. … Today, opportunity lies with serving companies drilling for natural gas in Western Pennsylvania’s Marcellus shale. Guttman counts more than 100 customers in the industry, spokesman David Robinson said. “All these customers are coming into our backyard, and they need diesel fuel,” said Gary Smelko, executive vice president of marketing. Drillers use the fuel in drilling rigs and trucks, and need a company that can safely deliver it so that operations don’t halt, he said. … It’s a largely unseen business to the average person but an essential link in the supply chain that keeps big rigs and cars on roads. (Tribune-Review, 10/23/12)
  • “Pa. Communities Get Big Boost From Natural Gas”: The safe development of job-creating American natural gas continues to provide significant economic and environmental benefits across our region, and this week’s natural gas impact fee disbursement announcement further underscores the fact that Marcellus shale production is positively impacting every square inch of the commonwealth. … In fact, the city of Philadelphia will receive nearly $1.3 million with Delaware County receiving more than $474,000 this year alone, in addition to the positive economic impacts southeastern Pennsylvania has seen – from lower consumer prices to the renewal of the region’s idled refineries. (Delaware County Times letter, 10/24/12)
  • “Report: Shale Could Redefine U.S. Economy”: The shale oil and natural gas sector in the United States could contribute nearly $500 billion to the U.S. gross domestic product by 2035, an analysis states. A report from research company IHS says growth in unconventional oil and gas production in the United States could be a key driver in future economic growth. … In terms of unconventional gas, production could account for as much as 75 percent of the natural gas production in the country — about 76 billion cubic feet per day — by 2035. (UPI, 10/24/12)
  • Thanks to Shale Gas, U.S. Suddenly “an Attractive Place to Put New Factories”: Companies and municipalities are deploying thousands of new gas-powered trucks and buses. And companies like fertilizer and chemical makers, which use gas as a raw material, are suddenly finding that the United States is an attractive place to put new factories, compared with, say, Asia, where gas is four times the price. Dow Chemical, which uses natural gas as a material for producing plastics, has assembled a list of 91 new manufacturing projects, representing $70 billion in potential investment and up to three million jobs, that various companies have proposed or begun because of cheap gas. “The country has stumbled into a windfall on the backs of these entrepreneurs,” said Edward Hirs, a finance professor at the University of Houston who contributed to a report that estimated that the nation’s economy benefited by more than $100 billion last year alone from the lower gas prices. (New York Times, 10/20/12)
  • “Shale Revolution Shakes the World”: For all the attention the Shale Revolution has garnered, we are only beginning to see its longer-term impact — and not only in reshaping the energy landscape and raising energy policy questions. The Shale Revolution is also an emerging factor enabling US economic revitalization and impacting long-term geopolitical interests. … In addition to enabling the US to reducing dependence on oil imports from 60% to 42%, unconventional gas is supporting one million jobs –projected to grow to 1.4 million jobs by 2015, according to an IHS study. Shale is spurring US manufacturing in downstream industries – petrochemical, chemical, metals and other energy-intensive industries. A PricewaterhouseCooper (PWC) study projects that the benefits from shale could allow US industry to lower raw materials and energy costs by $11.6 billion and create approximately one million more jobs by 2025. (Atlantic Council fellow, 10/22/12)

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