Friday, December 12, 2014NEW YORK -- The continued "shale effect" on U.S. manufacturing could bring an annual cost savings of $22.3 billion by 2030, assuming a high natural gas recovery and low-price scenario, finds a new research report by PwC.
In terms of job creation, continued shale gas activity will create 930,000 shale gas driven manufacturing jobs by 2030 and 1.41 million by 2040, the report adds.
PwC's report, "Shale Gas: Still a boon to US manufacturing?" showed an annual cost savings of $11.6 billion and approximately one million jobs by 2025. The new estimates are part of PwC's updated analysis on the contributions shale gas is making in revitalizing the U.S. manufacturing landscape.
"There's no doubt that the shale gas boom in the U.S. helped trigger a resurgence in manufacturing," said Robert McCutcheon, U.S. industrial products leader, PwC. "Reducing costs, creating jobs and supporting investments and innovations are among the many impacts this game-changing resource has brought to the U.S. manufacturing space. Assuming shale continues to serve as a catalyst for the manufacturing sector, we revised our cost savings and longer term employment estimates significantly upward, and could see those numbers go even higher as more businesses and global interests look to exploit shale opportunities."
Among the industries continuing to benefit are energy intensive manufacturing sectors such as metals, chemicals and petrochemicals, which all use natural gas as feedstock. According to the report, growing prospects for building pipelines for the infrastructure that's needed to support natural gas demands in the U.S. could also bring additional benefits to U.S. manufacturers who support those build-outs.
The survey also uncovered a continued rise in the number of companies commenting to the investment community on how shale gas activity affects their business. In 2013, 40 U.S. manufacturing companies included shale gas impacts in their public filings, up from 29 in 2011. "More companies are publicly disclosing a link between natural gas production as a material advantage for their business and a source for growth in demand for their products," McCutcheon noted.
PwC's report also identifies developments that potentially could impact the benefits of shale gas development to U.S. manufacturers. These include environmental issues, supply exceeding the demand, insufficient natural gas refueling infrastructure, and changes in tax policy that could affect capital investments.
CLICK HERE to download a copy of the report.
Published by The Business Journal, Youngstown, Ohio.
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