Why Shale Gas Matters
Unique U.S. position
Shale gas is a relevantly recent phenomenon. In a few short years U.S. natural gas prices have declined from over $12 per MBtu in 2008 to just above $3 today. This is certainly a tsunami of change in an era of ever increasing energy prices. Our manufacturing competitors in Europe, China, and Japan, who have been unable to exploit shale gas, resulting in prices dramatically above those in the U.S. Beyond the obvious opportunity to reduce energy costs, what are the larger implications for U.S. manufacturing?
First tsunami wave
The first wave of manufacturing opportunity is in products to support the shale drilling industry. These range from specialty steel pipe to protective gear for the tens of thousands of drill deck hands. Companies such as Vallourec, a French pipe manufacturer, have seized the opportunity in this case with a new $650 million dollar plant to supply steel pipe. As in many such opportunities, those who have quickly executed on their vision become market leaders. The shale gas tsunami is causing even bigger waves of change. Leaders in manufacturing are preparing for those changes.