“THE BARBARIANS ARE AT THE DOOR” - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 28

gas, U.S. producers grabbed a massive cost advantage, and it looked as if
it wouldn't disappear any time soon.
How big of an edge could this deliver? h e American Chemistry
Council, which lobbies for the chemicals industry, claimed in 2011 that
a sustained natural gas boom could support more than four hundred
thousand jobs in the chemicals industry and its suppliers, $32.8 bil-
lion in new chemicals sales, and $132 billion in boosted U.S. GDP. 16
Numbers of this kind are over the top; they include not only the eth-
ylene made from ethane but also the plastic bowls and l eece sweaters
where the ethylene ultimately ends up. (h ere's no reason to believe
that U.S. production of such i nal products will change much.) Indeed
the entire global ethylene market totals somewhere just around two
hundred billion dollars—and a handful of other producers, most
prominently Qatar and Saudi Arabia, still have far lower costs than the
United States, because their natural gas remains cheaper to produce. 17
h e bot om line, though, remains: the U.S. chemicals industry is poised
for big gains.
Other industries using a lot of energy have also become targets of
speculation about potential expansion. Steel production, cement manu-
facturing, and aluminum and glass making consume massive amounts
of fuel; cheaper natural gas means companies can cut their costs, and
perhaps undercut their overseas competition. But it's tricky to i gure
out how much these areas are actually gaining from low natural gas
prices. Steel and cement makers benei t because gas producers buy a
lot of their products—about a i t h of the material used to build a well
is steel, and about a tenth is cement—and the fact that shale gas helps
them probably has more to do with this boost in demand than with
any decline in their costs. 18 Cheap gas could help slow the decline in
some of these U.S. industries—low-cost natural gas makes it easier to
continue to operate existing plants—but substantial growth due to low
fuel prices is unlikely. 19
Low natural gas prices have also helped consumers, many of whom
were strapped for cash in the wake of a recession. h is in turn helped
the economy (and will continue to help it so long as the economy is
weak). Figuring out the extent of this impact is tricky, since it requires
making guesses about how high natural gas prices would have been