Low natural gas prices are fueling new industry. Take the new $750 million iron processing plant of Nucor Corp. It’s located beside the Mississippi river up a bit from New Orleans, smack in the middle of fields of sugar cane and sweet gum trees.
Natural gas production will hit record highs this year and oil production is the highest within the US since 1999. It’s causing a reindustrialization of the nation.
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New spending to the tune of $226 billion on pipelines, storage, processing facilities, and power plants have made access to gas inexpensive and convenient. It signifies a nationwide surge in investment that has transformed energy supplies in the US within the last decade.
Unfortunately, the economic benefits are not going to be felt in a major way any time soon. The production makes up only 1% of gross domestic product (GDP) and isn’t adding many jobs. But it is making US industries more competitive—from steel, aluminum, and automobiles to fertilizer and chemicals.
The manufacturing sector has lost 5.12 million jobs since 2001. Since January 2012, 532,000 of those have been added back. The efficiencies in fossil fuel production has decreased oil imports to the US by 17%.
Energy growth and efficiency does produce incomes which will, in turn, boost spending and create jobs to get the economy back on track. It will also develop an entirely new sector of wealth and revitalize America’s industry.
A vibrant cycle of growth is predicted as investors plow readily available cash from oil and gas sales into new equipment, create new jobs, and lower energy prices that will encourage consumer spending. The new jobs needed
to get the economy back on track may just be in the making.