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Why Shale Gas Matters to U.S. Manufacturing

April 11, 2012
New steel mills, chemical plants and jobs could be coming to a shale field near you.

Why is it so important the oil and gas industry succeed with shale gas development? For one, manufacturers in wide-ranging sectors are reaping the rewards from historically low gas prices and demand for products used in gas drilling.

The other major issue: jobs. The shale boom could create one million manufacturing jobs by 2025, according to a December 2011 PricewaterhouseCoopers study commissioned by the National Association of Manufacturers. Other studies contend that figure may be vastly inflated. Still, shale gas-related activities are picking up.

One of the more highly publicized success stories is in Youngstown, Ohio, where V&M Star has invested $650 million in a new seamless steel pipe mill to supply the industry.

The plant site is conveniently located near the Marcellus and Utica shale fields, V&M Star President and COO Joel Mastervich told people attending the Ohio Energy Management conference in Columbus Feb. 21.

The plant, which is expected to be completed later this year, will employ more than 350 people. V&M Star's growing presence in Youngstown may help the city in more ways than job creation. The once-thriving Ohio steel town located about equal distance between Cleveland and Pittsburgh, has become synonymous with Rust Belt decay over the years.

V&M Star, a subsidiary of French steel tubing manufacturer Vallourec & Mannesmann Tubes SA, is doing its part to help transform that image, Mastervich says. As an example, he points to a picture on a projector screen of a deteriorating abandoned house in the forefront of the new mill site.

"Nothing repels investment and repels the new people we need to hire more than blight," Mastervich says. "We talked over and over about the importance of investment and trying to clean up the community that we work in as a part of that."

V&M StarThe company worked with a local agency to identify blighted houses within eyeshot of the mill and tore down many of the crumbling structures. V&M Star's expansion also provides opportunities for companies in the region that will service the plant such as trucking firms and water treatment operations, Mastervich says.

Several other manufacturers have announced expansion efforts throughout North America's shale regions. On March 15, Royal Dutch Shell plc (IW 1000/2) said it had selected Pennsylvania as the site of a proposed multibillion-dollar plant that would convert ethane found in natural gas into ethylene.

Also, in Ohio, oilfield services company Baker Hughes Inc. (IW 500/69) announced on Feb. 28 it would build a regional headquarters in Massillon, near Canton, to service producers in the Utica Shale region.

Baker Hughes' initial activities will include cementing and drilling services and production logging, which helps producers evaluate well performance, Baker Hughes Vice President Andy O'Donnell says.
See also:

Baker Hughes to Establish Regional Headquarters in Ohio's Shale Gas Region

Pipe Maker to Build New Mill in Youngstown, Ohio

Shell Selects Pennsylvania for Proposed Ethylene Plant

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