Amid some concerns that parts of the Obama administration may be trying to stifle US natural gas production growth to help address global climate change, the White House's National Economic Council quietly acknowledged that US manufacturers saved about $22 billion from 2006 to 2013 "due to abundant, inexpensive shale gas."
Low-cost, reliable energy is important for the roughly one fifth of US manufacturing that is energy-intensive to be globally competitive, the council said in an Oct. 7 report, "Revitalizing American Manufacturing."
It said, "Once poised to be a major natural gas importer, the United States is now the No. 1 gas producer in the world. The surge in American natural gas production has lowered energy costs for manufacturers and driven job growth, with US natural gas costs one-half that of Europe and one-third that of Asia."
This is a reason why companies have announced tens of billions of dollars in new capital commitments for energy-intensive manufacturing facilities that will come on line in the years ahead, the report said.
It admittedly was only part of a section in the report called "The Energy Opportunity," which also discussed ways the administration has tried to make clean energy an important and growing US manufacturing sector. This, in turn, was part of a larger "pillar" outlining ways to keep domestic industries more competitive that included business tax and regulatory reforms, and infrastructure improvements.
It was enough, however, to make an American Petroleum Institute official comment. "Today's report is a significant reminder that our nation's leadership in energy production and in clean, abundant natural gas has meant lower prices for American manufacturers and consumers," API Executive Director for Market Development Martin J. Durbin said.
"Not only has the success of gas sharply reduced electricity prices and delivered huge economic benefits, but the development of America's gas resources is making a significant positive impact on our nation's environmental and energy sustainability goals," he said.
How manufacturers use gas
Manufacturing represents about 80% of total US industrial demand for gas, IHS Economics said in a report that the National Association of Manufacturers issued in May.
It said manufacturers use gas for direct processes such as drying, melting, cooling, and refrigeration; in direct non-process uses such as heating, ventilation and air conditioning, and lighting; indirectly as fuel, primarily in boilers for electricity and steam; and as a feedstock, "with almost 93% occurring in the petroleum refining, chemical, and primary metals sectors."
Increased gas supplies have reduced production costs for energy-intensive industries such as chemicals, metals, food, and refining, "and IHS expects these industries to outperform the US economy as a whole through 2025," the NAM report said.
