Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth Plastic water bottlesPhoto credit: Steven Depolo. Licensed under a Creative Commons Attribution 2.0 Generic license.

One point on this Manufacturing Day 2016 that shouldn’t be missed is how American’s fracking boom is helping American manufacturing.

To be competitive in international markets, manufacturers need access not only to affordable energy but to the raw materials that become the products we use daily. By unlocking immense amounts of natural gas, fracking has been a catalyst for new, job-creating manufacturing investment.

acc_shalegas_cracker_endproducts.png Natural gas is a feedstock for the chemical industry.Natural gas is a feedstock for the chemical industry.Natural gas is a main feedstock for chemical plants.Source: American Chemistry Council.

Chemical manufacturers have gained from the shale boom as illustrated in this FuelFix.com story on a new petrochemical plant being built near Houston, Texas that will produce ethylene, a plastics feedstock, and create jobs [emphasis mine]:

The idea for the U.S. project began in 2010, after Chevron Phillips had focused most of its growth in the Middle East with major projects in Qatar and Saudi Arabia, said Ron Corn, Chevron Phillips senior vice president of projects and supply chain,

“It was quite radical at the time,” Corn said of building massive petrochemical projects in Texas. “These are big, big projects — very complex.”

The effort is the continuation of the petrochemical boom primarily along the Gulf Coast to take advantage of cheap and ample ethane derived from natural gas through the ongoing shale revolution. The American Chemistry Council, a chemical industry trade group, estimates that more than 250 petrochemical projects are under construction or planned across the country through 2023, and they will create about 70,000 jobs. The combined cost is about $160 billion, including about $50 billion in Texas.

The growing demand for plastics is mostly coming in Asia, primarily China, but also India and Indonesia.

“They’re basically entering the consumer class,” Corn said, and demanding products like single-serve shampoo packets for the first time.

We see similar chemical investments in the Northeast where abundant natural gas from the Utica and Marcellus Shales are being developed:

Shell Chemical Appalachia’s long-awaited decision on a multibillion-dollar ethane cracker arrived early Tuesday and it’s a go. The company plans to build the petrochemical complex on the site of the former Horsehead zinc smelter in Potter and Center townships, Beaver County [northwest of Pittsburgh].

The site will house the cracker; three units that will convert ethylene into polyethylene pellets; a natural gas-fired power plant; a loading dock; and a wastewater plant. Main construction will start in about 18 months, with commercial production expected to begin early in the next decade, the company said in a statement.

Shell has said constructing the plant would employ 6,000 workers, giving way to 600 permanent operational positions when it opens. Shell had previously put the number of permanent jobs at 400 or 500, but spokesman Ray Fisher said Tuesday that those were just “speculation.”

Along with plastics, abundant natural gas is a boon for fertilizer makers, according to a Brookings Institution report:

[T]hey find that gas-intensive manufacturing has indeed experienced an expansion of activity as a result of the shale boom, with the most pronounced effect in fertilizer manufacturing – the most gas-intensive sector of all.

Being the world’s number one natural gas producer has it benefits. Policies that encourage and don’t hinder continued domestic energy development will be a hand up for American manufacturers.

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Sean Hackbarth A protester being arrested at a Dakota Access Pipeline construction site near Glen Ullin, N.D.A protester being arrested at a Dakota Access Pipeline construction site near Glen Ullin, N.D.Photo credit: Morton County Sheriff's Department.

If the Obama administration thought their actions to halt part of the construction of the Dakota Access Pipeline would calm things down in North Dakota, they were mistaken. If anything, protests have intensified.

Dozens of people have been arrested by local law enforcement, and the Mercer County Sheriff Dean Danzeisen, bluntly stated to the Obama administration, "These are not peaceful protestors.”

They are armed, hostile, and engaged in training exercises which can only be intended to promote violence, whether on Corps property or elsewhere. These rioters have left Corps and Standing Rock property on multiple occasions and travel several miles to enter private property to assault employees, private security personnel, and damage property that will take millions of dollars to repair. A number of these individuals have been observed brandishing weapons.

One anti-pipeline protester went on a local North Dakota radio show to talk about “lawlessness” he saw taking place inside the camps.

A union leader in North Dakota spoke to local North Dakota radio about the hostile environment created by pipeline opponents for those working on the pipeline:

Pam Link of the Local 563 chapter of the Laborers International Union of North America was on air with my colleague Jay Thomas on 970 AM WDAY. She spoke with Jay about the issues the pipeliners are going through with the #NoDAPL protests.

She painted an ugly picture, describing one incident where a worker filling up his truck at an area gas station was “beaten” by masked protesters.

“I wish people could imagine the situation our union workers have been put in,” she said, adding that hundreds of the workers are from right here in North Dakota.

“No one should have to be going to work threatened and put in an unsafe position,” she added.

Link said workers routinely show up at their work sites along the pipeline routine to find equipment damaged. Not that they get much of a chance to address the damage. She also said workers are routinely run off by protesters just a couple of hours after starting their work days.

There are a “handful of workers who have left the job,” Link said, though added that most of the workers are sticking and want to get the project completed.

This hostile environment has expanded and is affecting farmers and ranchers far from the pipeline’s route. Doug Goehring, North Dakota’s Commissioner of Agriculture, told North Dakota blogger Rob Port, the protests are anything but peaceful:

He said farmers and ranchers in areas even as far away [sic] as 20 or 30 miles from the protests are feeling “frustration, fear, anxiety, and tension.”

“It’s just like living down in an area that seems like a battle zone,” he said.

“These are innocent people who are caught in harm’s way,” he added.

He said he’s spoken to farmers and ranchers from the area who have sent their children to live in the Bismarck/Mandan area during the protests because they don’t feel safe. He said ag producers are having troubles harvesting their crops or tending to their cattle because of the protest activities and the law enforcement response they provoke.

In one instance he said he spoke to a farmer who lives 20 miles away from the main protest area who had a protester chain himself to a light pole in his farm yard.

“This is terrible,” he told me.

It should be noted that one of the protesters’ key talking points--that the pipeline will destroy cultural artifacts--has been upended. North Dakota State Historical Society’s archaeologists have found no evidence of cultural items on the pipeline’s route.

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Both the energy industry and labor unions turned up the volume on the administration’s delay of Dakota Access Pipeline.

The presidents of the International Union of Operating Engineers, International Brotherhood of Teamsters, Laborers' International Union of North America, United Association and the International Brotherhood of Electrical Workers sent a letter to President Barack Obama demanding that he "stand up for American workers" and allow construction to continue, NBC News reports:

The unions, which collectively represent 3.5 million workers, said the weeks-long halt in construction of the pipeline at Cannon Ball, North Dakota, had caused "hardships for thousands of families." The unions said 8,000 of their members are currently working on the $3.7 billion project.

"The intervention by the Departments of Justice, Interior, and the U.S. Army to indefinitely halt a project that is more than halfway constructed and has received state and federal approval raises serious concerns about the future of infrastructure development in America, and the livelihoods of our members," the group wrote in a one-page letter.

The energy industry reinforced labor’s points. On a press call, the American Petroleum Institute’s Robin Rorick warned that Obama administration actions threatened the rule of law saying it set “a dangerous precedent for other non-oil and gas projects like roads, bridges, tunnels and electricity transmission lines.”

Last month, Matt Koch at the Institute for 21st Century Energy also noted it is “also unfair to the communities along the pipeline route that support the project, and all Americans who stand to benefit from increased energy and economic security once the project is completed.”

Both industry and labor reminds us that the pipeline went through years of reviews at the state and federal level that included many opportunities for the public and interested groups to offer input. Permits were lawfully approved under that thorough process.

When asked to issue an order blocking pipeline construction, federal Judge James Boasberg looked at the facts and concluded the Army Corps of Engineers followed proper procedures and bent over backwards to gather input from the public, including Native American tribes who could be affected. He denied issuing an injunction, yet an hour later, the Obama administration chose to halt construction near the protest area, putting us in the situation we’re in.

The United States is a nation of laws. This administration should stand up for the rule of law, law-abiding construction workers, and local communities and not extreme anti-energy groups.It should stop impeding this necessary energy infrastructure project.

Christopher Guith What If...America's Energy Renaissance Never Actually Happened?

Sitting here in late September 2016, it’s pretty difficult to imagine what the U.S. would look like if the staggering energy renaissance of the last decade had never occurred. It’s almost like trying to imagine what if Donald Trump had stuck to real estate or if Lebron never returned to Cleveland. All of these actualities are now so ingrained in our lives, we take them for granted as almost inevitable. Hindsight is a wonderful thing.

Yet there are plenty of politicians, anti-energy activists, and other misguided voices who would like to pull the plug on our energy renaissance. Thus, as part of our Energy Accountability Series, we felt it important to examine with facts and figures just how different our lives would be if the energy renaissance had never actually happened.

The simple result of our analysis is pretty clear: we’d be in a world of hurt. The U.S. would be short 4.3 million jobs and over half-a-trillion dollars in annual GDP. Perhaps of more concern to most Americans, electricity prices would be 31% higher and we’d all be paying 43% more at the pump. Carbon dioxide emissions would be 23% higher and we’d be importing 160% more oil.

We forget that the energy renaissance created more than 4 million jobs.

America is currently in the midst of a tremendous manufacturing build-out. From Texas to Ohio to Pennsylvania to Louisiana, we’re seeing new manufacturing investment being made to take advantage of energy supplies that are cheaper and more abundant that almost any other place in the world.  Yet had the energy renaissance never happened, U.S. industry would be paying twice as much for natural gas price, its output would be some $50 billion lower, and almost 400,000 jobs would be lost. And that’s just the industrial sector.

Our analysis also found some states would be especially drubbed absent the renaissance. Pennsylvania would lose $13 billion in annual GDP plus the almost $1 billion collected in “fees” from energy producers.  Ohio would lose more than 110,000 jobs and $10 billion in state GDP. And Wisconsin, an important supply-chain state, would lose almost $4 billion in state GDP and $2.2 billion in labor income, and its $10 billion per year cheese industry would be much less competitive against producers from outside of Wisconsin. 

We take for granted that gasoline prices have been at 10-year lows and aren’t erratically spiking every time a global disruption occurs. We forget that the renaissance created more than 4 million jobs—at the height of the Great Recession mind you—and ultimately disproved the conventional wisdom that the United States could never produce enough oil to impact the price at the pump.

Americans of every stripe, in every state have benefitted tremendously from the energy renaissance, with more jobs, lower energy prices, better energy security, and an increasingly competitive America. It’s important to remember that as the level of anti-energy zealotry ramps up through this election season.

This originally appeared on the Institute for 21st Century Energy's blog.