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U.S. manufacturing sector prospers with natural gas boom

Rising natural gas production has lured more manufacturers back to the United States with the promise of cheaper electricity and feedstock.
BY JAY F. MARKS Modified: September 20, 2012 at 9:29 pm •  Published: September 21, 2012

America's booming natural gas production has drawn countless manufacturers back to the United States, experts said Thursday at Shale Gas Insight 2012.

Low natural gas prices have lingered due to the glut of the commodity, making the country an attractive market for manufacturers once again.

“Anyone that uses a lot of electricity, and anyone that uses natural gas as a feedstock, will want to be back in the United States of America,” said Barry Smitherman, chairman of the Texas Railroad Commission.

Martha Gilchrist Moore, senior director of policy analysis and economics at the American Chemistry Council, said a 2011 study showed the game-changing potential of natural gas and natural gas liquids.

Ethane, a natural gas liquid, is a key ingredient in many petrochemical products like plastics and other synthetic fibers.

“One of my colleagues refers to it as the secret sauce of the chemical industry,” which is the nation's largest natural gas user, Moore said.

She said the American Chemistry Council study showed a 25 percent increase in the ethane supply would result in $132 billion in new economic output after an investment of $16 billion. It would also create more than 40,000 new jobs for the chemical industry and its suppliers.

Moore said the U.S. likely will reap more benefits than the study indicated after hearing IHS Consulting's Andrew Swanson predict a 40 percent increase in natural gas liquids production by 2020.

Swanson, managing director of business development for IHS, said low-priced natural gas and natural gas liquids are attractive to manufacturers seeking cost certainty. Ethane, propane and butane are key feedstocks for many of them.

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