American Shale Gas Producers Brace for Expansion
The shale gas revolution in the United States has sparked a surge of investments across the oil and gas supply chain, with an estimated $1.9 trillion in capital expenditures expected between 2010 and 2035, according to IHS Global Insight.
This transformation of the energy landscape is evident in various sectors, with steel accounting for 21% of shale gas capital investments, as reported by IHS. Chemical producers are also seizing the opportunity presented by lower-priced feedstocks, planning expansions related to the shale gas boom.
One such example is V&M Star, a steel pipe producer, which plans to build a new threading facility in Youngstown, Ohio. This expansion aims to accommodate increased demand from shale gas drilling. The new slitter at the Wilder facility, when it begins production in fall 2012, will be the largest in North America.
The event will analyse the major economic benefits associated with the abundance of shale gas, including cost savings, U.S. plant expansion, and jobs growth. The National Association of Manufacturers and PricewaterhouseCoopers will host an event to release their "Shale Gas and U.S. Manufacturing" report on Nov. 30.
Other significant investments include Royal Dutch Shell's plan for a world-scale ethylene cracker in the Marcellus Shale region. Meanwhile, The Williams Cos. is expanding its Geismar, La., olefins production facility.
Moreover, TMK IPSCO's expansion at their Wilder, Ky., facility is a partnership with Ferrous Metal Processing Co. This expansion, announced on Dec. 7, will provide tubular products for the oil and gas industry. The new slitter will be installed in a 43,000-square-foot building that IPSCO will lease to Ferrous.
Investments have been made not only in production but also in midstream infrastructure, such as pipelines, gas processing plants, and storage facilities. These investments are crucial for connecting shale plays to markets and export terminals.
The investment outlook has been influenced by factors such as natural gas prices, regulatory changes, and market demand for liquefied natural gas (LNG). For example, low gas prices have periodically constrained investments, while rising global LNG demand has spurred growth in export-related infrastructure.
Investments have also been funneled into improving drilling efficiency, reducing environmental impact, and advancing technologies such as horizontal drilling and multi-stage fracturing.
For precise figures, consulting the latest EIA Annual Energy Outlook or specialized industry reports from energy consultancies would provide detailed quantitative estimates. The shale gas development will continue to drive hundreds of billions of dollars in investments across the oil and gas supply chain from 2010 through 2035, underpinning both domestic energy markets and export potential.
The surge of investments across the oil and gas supply chain due to the shale gas revolution is not limited to production alone. Finance, business, and energy industries are also investing significantly, with chemical producers planning expansions and companies like V&M Star building new facilities to accommodate increased demand from shale gas drilling. Additionally, investments have been made in midstream infrastructure, such as pipelines and gas processing plants, reflecting the interconnected nature of the shale gas industry.
