View from the UK of US' industrial advantage due to low cost natural gas
Europe left behind as shale shock drives Americas industrial resurgence
The wonders of US shale gas continue to amaze. We receive fresh evidence by the day that swathes of American industry have acquired a massive and lasting advantage in energy costs over global rivals, demolishing assumptions about US economic decline.
A study shows that
the shale gas bonanza has reversed the fortunes of the chemical, plastics, aluminium, iron and steel, rubber, coated metals, and glass industries. "This was virtually unthinkable five years ago," said the bodys president, Cal Dooley.
This is happening just as other clusters of manufacturing - machinery, electrical products, transport equipment, furniture, etc - are
"re-shoring" back from from China to the US. A 16% annual rise in Chinese wages over the last decade has changed the game. PricewaterhouseCoopers calls it the "Homecoming".
America produced 81% of its total energy needs in the first six months of this year, the highest since 1991. US ouput of crude and eqivalents will top 15.6m b/d by 2020, adding up to 3.6m jobs through multiplier effects. North America as a whole will reach 27m b/d - with Canadas oil sands and Mexicos deepwater fields - making the region a "new Middle East".
The implications are momentous. America will no longer need a single drop of oil from the Islamic world.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9639192/Europe-left-behind-as-shale-shock-drives-Americas-industrial-resurgence.html#disqus_thread
Obviously, the fracking process that is a large part of this story. The economic pressures pushing fracking are highlighted by this story. It does emphasize, however, that the price of the resulting gas is so much lower in the US than the current price in Europe and Asia, that we can afford to maintain high environmental requirements in the production of this gas and still maintain an advantage over the rest of the world.