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energy intensive manufacturing industries

Cheap Natural Gas Will Keep up Manufacturing Demand, Report Finds

energy intensive manufacturing industriesCheap natural gas and unconventional oil plays will support long-term growth in a variety of energy-intensive industries, according to a report by the US Conference of Mayors, prepared by IHS Global Insight.

Energy intensive manufacturing played a key role in the economic recovery of US metropolitan areas, the report said, accounting for almost 6 percent of jobs recovered across all metros since the recession.

Through 2020, IHS expects energy intensive manufacturing employment to grow by more than 1 percent per year. It expects these sectors to continue to boost the US economy. Demand from shale plays for new pipelines and mining equipment will keep fueling the iron, steel, machinery and fabricated metals industries, while cheaper natural gas will continue to stimulate demand from organic chemicals, resins, and plastics. 

Recent trends suggest that the US’s booming energy production market could replace automobile manufacturing as an economic powerhouse, Energy Manager Today reports.

The fortunes of the two sectors have been historically intertwined, but in recent years a massive increase in the production of shale gas – and the cheap energy it provides – is being felt across the economy.

A Boston Consulting Group study released in February claimed that shale gas will have a greater impact on US manufacturing than is generally assumed as cheap gas makes manufacturing more competitive – and becomes a major source of jobs in its own right.

The National Association of Manufacturers sees shale gas as a potential boon to business and supported a bill in Congress to streamline the gas pipeline permitting process.

Takeaway: The US natural gas boom is benefiting energy-intensive industries, not only through low energy prices but through feedstock availability and demand for equipment.

Tamar Wilner is Senior Editor at Environmental Leader PRO.

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