Natural Gas Abundance Powers Jobs and Investment
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A Washington Post story reports on billions of dollars in expected new investment because of increased natural gas production from shale:
Manufacturers have plans to invest as much as $80 billion in U.S. chemical, fertilizer, steel, aluminum, tire and plastics plants, according to Dow Chemical. And the main reason, said George J. Biltz, Dow Chemical’s vice president for energy and climate change, “comes back to the massive competitive advantage the United States has with natural gas today.”
Chemical and fertilizer plants are being built and expanded in Louisiana, Texas, and Iowa, and the story notes other positive effects:
On Oct. 1, Honeywell announced that it paid $525 million for a 70 percent stake in Thomas Russell, a privately held provider of technology and equipment for natural gas processing and treatment. With the acquisition, Honeywell will offer technologies and products that allow producers of shale and conventional natural gas to remove contaminants from natural gas and recover high-value natural gas liquids used for petrochemicals and fuel.
Another example: U.S. Steel. The company 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.
We know oil and natural gas development from shale is supporting millions of jobs right now, and according to an IHS CERA study, it will support 2.5 million jobs by 2015 and 3 million jobs by 2020.
Another benefit from this energy boom is more government revenues from royalties, lease sales, and taxes. The IHS CERA study estimates that shale energy development will put $62 billion in government coffers in 2012 and contribute more than $2.5 trillion by 2035. Leaders in Washington who are working on avoiding the fiscal cliff and moving toward a deal encompassing spending reforms that address entitlements and comprehensive tax reform must look at how increased energy development can help improve our fiscal situation.
However, all this good stuff—new investment, new jobs, new government revenues-- could go away if the federal government blankets hydraulic fracturing technology with duplicative regulations.