Manufacturing group calls on more infrastructure investment in natural gas pipelines

The National Association of Manufacturers (NAM) is calling for an increase in infrastructure investments related to natural gas production, crediting the energy source for its positive impact on manufacturing jobs and growth in the current economy.

In a new IHS Economics/NAM study entitled “The Economic Benefits of Natural Gas Pipeline Development on the Manufacturing Sector,” the group stated that new pipelines produced an economic impact of 347,000 jobs economy-wide and that 60,000 of those were directly tied to manufacturing. NAM believes manufacturing and power generation will be the major drivers of an estimated 40% growth in natural gas demand over the next decade.

“Beyond these numbers, the changing dynamics of the global energy market has had profound geopolitical and economic impacts,” said Chad Moutray, chief economist at the NAM Center for Manufacturing Research. “On the former, a few years ago, it would have been difficult for one to predict a time where growth in energy production would come from North America and not the Middle East. This additional output has pushed energy costs dramatically lower, helping to reduce the cost of production for manufacturers in the United States.”

He continued: “Nowhere is this more evident than in the chemical sector, with at least 262 announced investments in that category in recent years, 61% of which has been foreign direct investment. Manufacturing construction has already soared, with more jobs and exports expected to follow. As our pipeline network grows, so does manufacturing opportunity.”

The report also stated that because manufacturing relies on natural gas and electricity, lower natural gas prices gave manufacturers “an indirect reduction in costs through the use of less expensive electricity.”

Furthermore, the combination of increased access to shale gas and the pipelines that deliver it to U.S. manufacturers meant 1.9 million jobs in 2015 alone, allowing domestic manufacturers to be “more cost-competitive relative to their international competitors as a result of lower natural gas prices,” the report claimed.