Lower domestic energy costs are driving more U.S. manufacturing factories back home, as America's oil and gas production has expanded, the American Petroleum Institute (API), a leading industrial organization, said on Tuesday.

The U.S. manufacturing sector, which has experienced significant job and economic losses over the past few decades, is making a comeback due to more reliable and affordable domestic energy, mainly driven by increased shale gas production, the API said in a report.

The manufacturers use about one-third of all the energy produced in the United States. Lower natural gas costs have reduced manufacturing costs, as well as heating and electricity prices by an average of 10 percent, said the report, citing the IHS Global Insight, a leading consulting company for the energy industry.

The increasing availability of U.S. energy at low prices has made many American companies rethink their strategies of locating abroad and others to return home, noted the report.

"Manufacturing can and is returning to the United States: Shell, Dow, U.S. Steel and others have all announced or are considering moving manufacturing to U.S., or planning expansions here at home, for the first time in many years," said Jack Gerard, API's president and CEO, at a press conference.

With lower feedstock and energy costs thanks to increasing domestic natural gas production, over 1 million new jobs could be created by 2025, the report added.

In addition, the association, representing more than 490 oil and natural gas companies, urged the U.S. government to expand access to domestic energy resources as it owns vast proven reserves and undiscovered resources.

While the U.S. oil and natural industry has been doing its best to advocate increasing access to domestic energy resources, there is intense opposition from environmentalists. At present, 85 percent of America's offshore acreage is off-limits to development, and 60 percent of federal onshore lands are off-limits. Endi

Go to Forum >>0 Comment(s)