Domestic shale gas production could lead to manufacturing upswing

Hydraulic fracturing – or "fracking" as it's commonly known – has been pegged as the No. 1 reason why the United States is on pace to overtake Saudi Arabia as the world's largest oil and gas producer by 2020.

The process involves injecting chemically laced water deep into underground shale rock formations to release natural deposits of oil and gas that have gone largely untapped for years. Fracking not only represents a booming new operation bound to lead U.S. oil and gas production to the next level, but also the catalyst for a potential increase in domestic manufacturing, several experts say.

Fracking has already created more than 1 million jobs in the United States during 2012. With an increase in operations on the horizon, manufacturing recruiters will be a valuable asset during the resulting business expansion.

Low gas costs spur chemical manufacturing increase
As production of shale oil and gas rises, prices fall, creating a more favorable business climate for U.S. manufacturers, especially those in the chemical industry. In the Year End 2012 Situation and Outlook report published by the American Chemistry Council (ACC), the organization said favorable oil-to-gas prices brought on by fracking production will lead to more investments in U.S. chemical manufacturing, better growth and increased domestic hiring for the chemical industry.

That notion was also reinforced by Kevin Bullis, senior editor at the MIT Technology Review, in a recent article that hailed the low natural gas prices as a significant advantage to U.S. chemical manufacturing.

Bullis said high gas prices led many chemical operations to downsize or completely shut down just five years ago. Since fracking has grown in popularity and natural gas prices have dipped substantially, major business have made commitments to increasing U.S. operations. Bullis noted production of ethylene, the world's most high-volume chemical, was a key component in increased chemical manufacturing. During the last two years, manufacturers have announced plans to add 10 million metric tons of ethylene capacity in the country by 2019.

Other manufacturing industries feel the effect
The benefits of fracking are not limited to the chemical industry, as low natural gas prices have the potential to spur manufacturing of other important products like tires, carpet, antifreeze, lubricants, cloth and plastics, Bullis said.

The ACC also said other natural gas and energy intensive manufacturing industries could see employment gains. The ACC said such industries could potentially see an increase of some 662,000 jobs directly related to the low natural gas prices made possible by fracking, putting the services of manufacturing recruiters at a premium for all kinds of businesses.

Some industries are already feeling the effects of better business conditions because of fracking. The steel industry has already starting booming because it supplies gas producers with pipes, drilling equipment and materials for rigs. Increased demand is not only fueling the steel rise, but also lowering natural gas prices, which has enabled manufacturers to produce more. The more businesses produce, the more steel industry recruiters can help them find able workers to shoulder the load of expanding operations.