Executive Briefings

As U.S. Exports More Natural Gas, Manufacturers Worry About Increased Prices

If you ask the manufacturing and chemical sectors what their greatest blessing has been in recent years, the answer will generally be the plethora of natural gas that has been made accessible to them - and how this has decreased their cost of doing of business.

As U.S. Exports More Natural Gas, Manufacturers Worry About Increased Prices

But if you turn around and ask them what could be among the greatest threats they now face, some would respond that this newfound national resource would be liquefied and shipped around the world in the form of LNG.

Manufacturers say that they use natural gas for drying, melting and space heating, as well as a feedstock for refining and making chemicals and metals. They are making use of both “dry” natural gas and the “wet gas” that is separated from it. Those so-called natural gas liquids are comprised of such chemicals as butane, ethane, methane and propane — all of which can serve as the foundation for finished goods that are consumed domestically and exported around the globe.

“Over the next decade our nation’s demand for natural gas is only going to grow and much of that growth is from manufacturing,” said Jay Timmons, president and CEO of the National Association of Manufacturers.

To be clear, there’s traditional natural gas and then there’s shale, or unconventional natural gas that is embedded in rocks a mile below the earth’s surface. The ability to access the shale gas is what has ignited the natural gas revolution.

The United States has been the leading producer of natural gas since 2009. But this year, it is also expected to be a net exporter of the fuel. That’s because of extended pipelines to Mexico and because of less imports from Canada. But it is also because this country is building several LNG export facilities to meet the expected demand from Asia and Europe.

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But if you turn around and ask them what could be among the greatest threats they now face, some would respond that this newfound national resource would be liquefied and shipped around the world in the form of LNG.

Manufacturers say that they use natural gas for drying, melting and space heating, as well as a feedstock for refining and making chemicals and metals. They are making use of both “dry” natural gas and the “wet gas” that is separated from it. Those so-called natural gas liquids are comprised of such chemicals as butane, ethane, methane and propane — all of which can serve as the foundation for finished goods that are consumed domestically and exported around the globe.

“Over the next decade our nation’s demand for natural gas is only going to grow and much of that growth is from manufacturing,” said Jay Timmons, president and CEO of the National Association of Manufacturers.

To be clear, there’s traditional natural gas and then there’s shale, or unconventional natural gas that is embedded in rocks a mile below the earth’s surface. The ability to access the shale gas is what has ignited the natural gas revolution.

The United States has been the leading producer of natural gas since 2009. But this year, it is also expected to be a net exporter of the fuel. That’s because of extended pipelines to Mexico and because of less imports from Canada. But it is also because this country is building several LNG export facilities to meet the expected demand from Asia and Europe.

Read Full Article

As U.S. Exports More Natural Gas, Manufacturers Worry About Increased Prices