More advocates are spreading the message that the energy industry can help our county work though not only its energy needs but its budget shortfalls and economic problems as well. US Chamber of Commerce President Thomas J. Donohue noted in his 2013 State of American Business address that developing American energy can help our fiscal problems, including reducing the trade deficit and bringing more manufacturing jobs back to the US.
He said that he has already seen indications that lower gas prices are attracting businesses back. Donohue stated that to take advantage of these opportunities, more federally controlled land, both on and offshore, must be opened for exploration and development with a predictable and fair regulatory system in place. He also encouraged further development of alternative energy sources, such as nuclear, wind, geo-thermal, and solar. Donohue asserted that the Chamber’s top priorities for 2013 remain creating jobs and increasing economic growth. He said that “(w)e must get this economy moving faster. Growth of 1.5% to 2% is not acceptable.”
Donohue and the Chamber of Commerce are not the only ones optimistic about renewed growth in US manufacturing. Fitch Ratings analysts issued a special report called “Shale Boom: A Boost to Manufacturing but Not to Energy Independence” earlier this month. It states that low gas prices provide an advantage for some industries, including steel, petrochemicals, and other high-energy industries, as well as (to a lesser degree) copper, aluminum, and cement. Shale gas is providing the lower costs that allow this comparative advantage, particularly due to the expanded use of increasingly efficient hydraulic fracturing. The current utilities gas price is $2.50/ mcf, down tremendously from the 2008 average of $8/ mcf. The advantage is most notable in petrochemicals, because natural gas is both an ingredient in the products made by this industry as well as a source of energy to manufacture products. The report states it “appears to be a permanent advantage” in this industry and that America’s gas-run petrochemical industry is more efficient and competitive than Europe’s oil-based industry.
None of this means that the US cannot also export natural gas as well. Another Chamber of Commerce executive, R. Bruce Josten, said that the US has enough natural gas resources to support a growing manufacturing sector as well as to export to the global market. Donohue concluded that “(b)y fully embracing America’s energy opportunity, we can accelerate growth, create millions of new jobs, free ourselves from some less-than-stable global suppliers, and create huge new revenues for government, which will help reduce budget deficits.” If only our politicians would take notice and listen to this sound advice, issued over and over again, the prospects for our country could be a whole lot brighter in 2013.
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