Shale Gas: A renaissance in US manufacturing?

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A study released by PricewaterhouseCoopers exploring the potential benefits and the potential limiting factors for shale gas. The study finds that US manufacturing will employ an additional 1 million more workers by 2025 and save $11.6 billion in energy costs--all from an abundance of shale gas.

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Shale Gas: A renaissance in US manufacturing?

  1. 1. December 2011With contribution fromNational Association ofManufacturersAt a glanceLower feedstock and energycosts from shale gas couldhelp US manufacturers.More chemical, metal, andindustrial manufacturers arecommunicating to investorsthat shale gas developmentshave driven demand fortheir products.US manufacturers couldemploy approximatelyone million more workersby 2025.
  2. 2. Introduction The economic environment remains difficult for many US manufacturers, with soft demand and margin pressures making it harder to grow their domestic workforces. In this analysis, we present our point of view on how shale gas resources can help the sector address these challenges and create more jobs in the United States.Executive summary
  3. 3. An increase indomestic investment Figure 1: Estimated shale gas and reported natural gas reserves, trillion cubic feet (tcf), 2009 Proved natural Technically recoverable gas reserves shale gas United States 273 862 Total of regions surveyed 1,274 6,622 Total world 6,069 N/A Source: EIA, “World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States,” April 2011; Total world technically recoverable shale gas reserve estimate not available as Russia, Central and Southeast Asia, Middle East, and Central Africa were not included in the EIA assessment due to conventional reserves and limitations of information/funding.
  4. 4. Revival of a domesticenergy source 1 http://www.eia.gov/analysis/studies/ worldshalegas/ 2 http://www.eia.gov/pub/oil_gas/natural_gas/ data_publications/crude_oil_natural_gas_ reserves/current/pdf/table13.pdf 3 http://www.usgs.gov/newsroom/article. asp?ID=2893 4 http://www.potentialgas.org/ 5 http://www.ontarioenergyboard.ca/OEB/_ Documents/EB-2010-0199/ICF_Market_ Report_20100820.pdf 6 http://www.eia.gov/forecasts/aeo/
  5. 5. Affordablefeedstock/energyand more demandfrom energy endmarket 7 http://www.eia.gov/emeu/mecs/ mecs2006/2006tables.html 8 http://www.eia.gov/forecasts/aeo/
  6. 6. “The safe production of shale gas has been a game-changer in a variety of regions and among a varietyof sectors throughout our economy—notablymanufacturers. At a time when national economic andemployment indicators are uncertain at best, shale gasproducers and their vast and dynamic supply chain areproviding families and communities jobs and economicdevelopment at a time when they’re needed most. TheMarcellus Shale is a case study in the transformativeimpact of the natural gas industry. In Pennsylvaniaand surrounding states, tens of thousands of jobs arenow supported by our industry and dozens of sectors—from steel to construction firms—have been revitalizedthrough the promise of clean-burning and abundantAmerican energy.”Kathryn Z. KlaberPresident, Marcellus Shale Coalition
  7. 7. Investment story inthe United Statesbegins to play out 11 “Contracts and Projects: May 2011.” Process Engineering. June 6, 2011 12 Katz, Jonathan. “The New Black Gold.” Industry Week. May 1, 2011 13 Chemweek’s Business Daily. April 11, 2011 14 Begos, Kevin. “Shell to decide by end of year where to locate huge new gas plant: Pa., Ohio or W. Va.” Associated Press. September 2, 2011 15 “Nucor breaks ground in Louisiana DRI project.” Steel Times International. March 10, 2011 9 Esposito, Frank. “Feedstock boon may aid processors.” Plastics News, May 2, 2011 and “Dow Unveils Plans to Integrate and Grow North America Performance Business with Shale Gas Liquids.” Manufacturing Close-up. April 30, 2011 10 Chemweek’s Business Daily. August 1, 2011
  8. 8. 16 “Valley can be heart of industries.” Tribune 20 “Nucor Announced Ground Breaking in St. Chronicle. June 17, 2011 James Parish Project.” Nucor Corporation,17 Mitchell, Adam. “From Exporter to Local Partner; accessed October 17, 2011. http://www.nucor. French Steel-Tube-Maker Vallourec is Expanding com/investor/news/releases/?rid=1536511 Production Beyond its European Heartland, 21 “U.S. Steel making play to reduce coke Says CEO Crouzet.” The Wall Street Journal. consumption, use natural gas.” nwtimes. July 18, 2011 com, accessed October 17, 2011. http://www.18 Feser, Katherine. “Deal of the Week: Pipe maker nwitimes.com/business/local/article_788e5feb- to build home for research.” Houston Chronicle. 2bf1-5748-82a8-30789d943196.html May 9, 201119 Kath, Jonanthan. “The New Black Gold.” Industry Week. May 1, 2011
  9. 9. Significant jobcreation potential
  10. 10. …we expect that manufacturing employment could increase by approximately one million workers at several future points in time in a high shale recovery scenario compared to low shale recoveries.Potential limitingfactors
  11. 11. “More and more Americans are beginning to recognizethe enormous potential of shale gas. The impact ofincreased shale gas development will ripple throughour economy, with manufacturers, in particular, seeinggreat benefits. Shale gas development has the potentialto boost manufacturing employment by one millionjobs by the middle of the next decade.”Jay TimmonsPresident & CEO, National Association of Manufacturers
  12. 12. Conclusion
  13. 13. About the PwCnetworkAbout PwC’sIndustrial Productspractice
  14. 14. Contributions to thispaper were made by
  15. 15. To have a deeper conversationabout shale gas, please contact:

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