The national energy sector is proving to be one of the most resilient and productive in these tough economic times. Driven in large part by the shale boom, we’ve seen almost 3.6 million jobs added in the energy sector.
Companies like Ormet Corp. (PINK: ORMT), an aluminum company, are reopening factories. Iron processor Nucor Corp. (NYSE: NUE) has a new plant along the Mississippi. And a subsidiary of Orascom Construction Industries (PINK: ORSCY), based out of Cairo, plans to develop a $1.3 billion fertilizer plant in Iowa. That plant, if completed, could generate around 2,000 construction jobs, and a further 165 permanent positions.
Bloomberg quotes Orascom head of investor relations Omar Darwazah:
“The amount of petrochemical investment that the U.S. will have in the next 10 to 15 years is massive. Given the shale gas boom, gas prices in the U.S. are arguably more competitive than the Middle East, because you don’t have the political risk.”
Indeed, the pace seems only to be picking up. Across the nation, plans for gas-import terminals are being suspended in favor of export plants, like the one being built in Louisiana’s Sabine Pass by Cheniere Energy Inc. (NYSEAMEX: LNG), which is worth $10 billion. And major pipeline operators like Enterprise Products Partners (NYSE: EPD) and Enbridge Inc. (NYSE: ENB) are overhauling national pipeline networks to enable them to re-route the massive influx from shale production sites.
But environmental concerns are running high, often on legitimate grounds. Although the shale boom has spurred a jobs surge, the controversial process of ‘fracking’ has caused consternation worldwide.
But when Citigroup issues reports that claim the U.S. may become the biggest producer of crude and natural gas liquids as early as 2020 – surpassing Russia and the Middle East – it can be hard to get people to listen.
With the development of export terminals and the increasing appetite of developing nations like India and China, the U.S. looks perfectly poised for a new economic era. The greatest benefit from the shale boom is the ripple effect it has on smaller elements that nevertheless form an integral part of the entire energy sector.
Small business owners, manufacturers of pipes and valves, laborers, heavy equipment handlers, and a host of other peripherally-related entities all stand to gain as the energy sector ramps up its operations.
Across the country, from North Dakota to the Marcellus shale in Pennsylvania, and all the way from the power plants of California to the refineries in Texas, there has been an investment of almost $250 billion in the energy sector. And, as we recently reported, the Marcellus shale is just beginning to hit high gear and promises a steady influx of black gold for the next decade or more.
In the U.S., natural gas production is expected to hit record highs this year, and in July, oil production hit its highest point since 1999, Bloomberg reports. The Citigroup report mentioned earlier even allows for the possibility of this influx bumping the GDP up by 3 percent.
And as all this oil and gas floods the world, it could offer a new solution that completely bypasses OPEC to lower fuel prices worldwide. Already, companies are investing continuously and heavily in the energy sector, with over $138 billion across more than 700 storage, pipeline, and refinery plants across the nation, with another $88 billion going to the 500 or so gas-fired power generation facilities.
Long story short, we eagerly anticipate an upcoming boom in the economy, and it could be driven almost entirely by the energy sector.
