Can a natural gas boom lead to a renaissance for U.S. manufacturing?

Posted by scapozzola on 01/10/2013

The tapping of vast reserves of natural gas in the U.S. has led to a drop in the cost of production for a wide array of manufactured goods, including tires, carpet, antifreeze, lubricants, cloth, and many types of plastic.

According to MIT Technology Review's Kevin Bullis, lower energy costs are now luring key industries back to the United States. And not only are low U.S. gas prices prompting plans for the construction of new manufacturing plants, but the need for an oil pipeline is helping to spur a steel industry revival.

Bullis says that cheap natural gas is lowering costs for manufacturers who use a lot of energy, such as steel makers. This in turns is helping the steel industry to boom as it supplies gas producers with more pipeline. 

Cheap natural gas is also prompting a shift away from petroleum-based fuels for trucking, with some companies switching to trucks that burn natural gas directly.  Eventually, even diesel trucks could be using fuel made from natural gas. One example: the South African company Sasol, which plans to build a $14 billion plant in Louisiana partly to convert natural gas to diesel, potentially lowering fuel costs for conventional vehicles as well.

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