When we talk about oil and gas development in the United States, we usually talk about the number of people the oil industry hires. Or maybe gas prices or “energy independence.” But what about the fact that America’s natural gas boom, which like our oil boom was brought about by the development of frackign and horizontal drilling techniques, is dropping energy prices so quickly that manufacturers from other parts of the world are now re-locating to the United States?
[I]n Ludwigshafen [Germany], many people view the United States as the land of the future. Since 2009, BASF has channeled more than $5.7 billion into new investments in North America, including a formic acid plant under construction in Louisiana, where the company will manufacture a chemical used to de-ice runways, tan leather and preserve animal feed.
Even as Europe’s increasingly stringent environmental regulations and taxes are driving up the cost of energy and doing business, companies are fleeing to the friendlier climes of America where regulations are easier, and energy is cheaper:
Among them is Austrian steelmaker Voestalpine, which announced last month that it will build an iron-ore processing plant in Texas to take advantage of the low energy prices. The plant is expected to cost $715 million and create 150 jobs. The company aims to almost double its total output by 2020, largely through U.S. expansion, and it has mostly abandoned making any major new investments in Europe.
Royal Dutch Shell announced plans last year to build a multibillion-dollar petrochemical plant in Pennsylvania that will employ several hundred full-time workers and as many as 10,000 people during construction.
Companies are considering moving down south from Canada too. “We’ve become more and more … confident with the shale and tight gas revolution here in North America,” Methanex CEO told the Toronto Globe and Mail. That company is moving one of their methanol plants from Chile to Louisiana, and is considering moving another to America so as to be nearer the cheap supplies of natural gas.
The number of boxes America’s fracking-driven oil and gas revolution has checked off political wish lists is astounding.
Bring manufacturing jobs back to America? Check.
Lower carbon emissions? Check.
Energy independence? Check.
Lower teen pregnancy rates? Believe it or not, check.
The irony is that President Obama and Democrats will no doubt benefit politically from an economic recovery driven by an energy boom they, for the most part, wish wasn’t happening.