October 21, 2016

Manufacturing Demand for Natural Gas Increases

Natural gas plays a vital role in heating homes and powering businesses. As a recent Forbes article notes, gas is also crucial to the manufacturing industry and industrial sector, as demonstrated by the increase in demand for the resource:

The industrial sector is second after power generation and accounts for 28% of U.S. gas demand, compared to nearly 40% two decades ago. Many feel U.S. industrial gas demand might have peaked at 23.3 Bcf/day back in 1997, but I’m not so sure. Industry still builds the cement, asphalt, and steel that build our cities, where a rising 82% of all Americans live.

The article highlights the dual use of natural gas as both an energy source and feedstock, which contribute to the manufacturing of a number of everyday products:

Industry also makes the appliances, vehicles, electronics, and even the agricultural products that we rely on every day. The industrial sector uses natural gas as a fuel and/or feedstock to meet numerous energy requirements, making chemicals, plastics, and other key products. Ethane is a key component of natural gas and used as the primary building block of most plastics.

Forbes goes on to discuss jobs in the manufacturing industry and their “multiplier effect” on the greater U.S. economy:

Manufacturing jobs account for about 9% of the U.S. workforce and 13% of U.S. GDP. This is an incredibly important sector because manufacturing has such a high “multiplier effect,” where 1 new manufacturing job creates 4-5 jobs across the broader economy. Low natural gas prices clearly give us a competitive advantage globally, which will mean even more industrial gas demand moving forward.

Given this range of market factors, projects like the Rover Pipeline will be increasingly important in providing access to natural gas for manufacturers –and businesses at large – throughout the region. The continued attention to the relationship between natural gas and the manufacturing sector in the press is testament to the need for midstream infrastructure like Rover.