On Wednesday, November 28th, The Aspen Institute in Washington, DC, held an event titled “Impact of the Energy Renaissance on U.S. Manufacturing.” The event was moderated by Tom Duesterberg, Executive Director of the Aspen Institute’s Manufacturing & Society in the 21st Century program, and featured panelists Calvin Dooley, former Congressman from California and President and CEO of the American Chemical Council; Thomas Peterson, Founder and CEO of the Center for Climate Strategies, Inc.; and Harold Sirkin, Senior Partner at The Boston Consulting Group and author of a groundbreaking study on the revival of U.S. manufacturing, based on lowered costs. The participants agreed that increased access to low price supplies of natural gas from shale deposits will have positive impacts on U.S. manufacturers, as well as create jobs and drive economic growth, for years to come. Mr. Sirkin noted succinctly that this low cost gas is a gift, and that “God blessed America again.” He also cautioned that we need to be use it wisely.
Much of the panel discussion and audience queries focused on what the federal government can do to make the most of this boom in natural gas production and, conversely, what policies could potentially obstruct progress. There was agreement that one important role government can play to leverage the increase in natural gas production is to help students and workers develop the skills that are needed for jobs in these areas. Mr. Dooley stated that he is not concerned about government regulation impeding progress, but that it is important that businesses have certainty on the regulatory front. Mr. Sirkin reiterated that the natural gas train is rolling down the tracks, and he does not foresee government policies stalling that development.
Not surprisingly, the panel raised concerns about possible environmental impacts of natural gas extraction. Mr. Sirkin noted that if fracking turns out to be a real polluter then government will have to address that problem, but there isn’t any evidence that such pollution is a major problem now. Mr. Dooley stated definitively that he does not foresee any serious environmental impacts being discovered down the road because, after all, shale deposit natural gas production is not a new technology - it has been around for decades.
The panel also discussed the issue of U.S. exports rising as a result of increased natural gas production. Mr. Dooley stated that because of the recession it has been hard to normalize some of the export numbers, but it was well noted throughout the event that all industries derive benefit from this increased natural gas production - both as a feedstock for the chemical industry and as an energy source for all manufacturers. It was generally noted that in the U.S., natural gas, which is priced regionally not globally, sells for about one-third the cost of natural gas in Asia and one-half the cost of natural gas in Europe.
The panel also agreed that the U.S. advantage in this area is likely to last for a decade, possibly more, but that the huge economic incentives will inevitably drive other countries into shale deposit natural gas production. A key takeaway is that it is important for business leaders and policymakers to do everything they can to leverage our current competitive advantage while it still exists. We should have ten good years of advantage which could hasten a renaissance of American manufacturing.