Cheap natural gas

Petrochemical companies are making multibillion-dollar bets to profit from the abundant cheap natural gas pouring out of shale-rock formations across the U.S. Making sure those plans pay off.

Natural-gas prices have plummeted in recent years as a new wave of supply has been unlocked from Texas to Pennsylvania through technological advances, including horizontal drilling and hydraulic fracturing. The low prices have been tough on some oil and gas companies' bottom lines. But the trend has given chemical and plastics producers a reason to expand in the U.S., creating jobs and reviving a sector of the economy that many people had written off.

The manufacturing renaissance sweeping across the U.S. today is a shift from the turn of this century, when it seemed unlikely that new petrochemical plants would be built in places such as the coastal region near the Gulf of Mexico.

The assumption was that new petrochemical plants and associated investments in plastics, rubber resins and metals manufacturing would be focused in Asia and countries rich in natural gas, such as Iran. 

 

The resurrection of U.S. manufacturing in the service of developing the chemical sector and pumping more oil and gas—including building machinery and fabricating steel and iron—is breathing new life into major metropolitan areas.

From 2010 to 2012, energy-intensive manufacturing sectors added more than 196,000 U.S. jobs and increased real sales by $124 billion in the nation's metro areas, according to the report.