By Douglas L. Whitley
What has been lost during the on-going debate on hydraulic fracturing in Illinois and across the country is the “other side of the coin.” What do I mean by that?
When it comes to increased natural gas production, the other side of the coin is the increased demand and opportunities for businesses of all sizes in our state and beyond.
With natural gas production climbing there has also been a corresponding lowering in price and an increase in companies looking at natural gas as a strategic business decision to lower production energy costs and decrease fleet fuel costs for the long-term.
Illinois companies are taking advantage of the new natural gas opportunities and others are showcasing that innovation and advancements in the use of natural gas are moving at a rapid pace. Want some examples?
The presence of fleet vehicles fueled by compressed natural gas (CNG) continues to increase in Illinois. Testa Produce (wholesale restaurant produce distributor), UPS (What can Brown do for you?) and Ozinga (concrete trucks) are three examples out of many that are switching all or some of their fleet trucks to CNG. The fuel saves them money and lowers overall emissions.
Ozinga is even branching out from its core concrete business to offer CNG fueling stations – building the infrastructure companies need and providing consulting services on the benefits of moving to CNG vehicles.
Waste Management has more than 100 CNG refuse trucks in Illinois and they dedicated the largest commercial CNG fueling facility in Illinois. These stations are beginning to pop up in strategic places so these vehicles have places to fuel up. Clean Energy Fuels is working to promote CNG or liquid natural gas (LNG) stations across America’s interstate network so our long-haul trucks have the opportunity to switch to natural gas.
Does this mean diesel-fueled vehicles are on the way out? No. Switching works better for some companies than for others. But that’s not the point. It’s a value add to have more than one kind of fuel to choose from when deciding on transportation options. Companies like choices and they are taking a hard look at what might work for the cars and trucks they put on the road every day.
And there are more uses on the horizon.
Several railroads have already embarked on pilot projects to develop natural gas engines for both the economic benefits and to meet expected emissions regulations. There is also a rapid rise in the number of drill rigs being powered by natural gas.
Lastly, manufacturing companies throughout the country are looking at expanding or re-shoring (bringing back jobs from oversees) their operations as they see the potential of marrying the quality American workforce with lower energy costs coming in part from the increased availability of natural gas.
Technology and productivity advances in drilling, engines, and logistics costs have helped make the U.S. a more competitive location.
In Illinois’s case, the vast array of underground pipelines that traverse through our state plus the lower-cost raw material (natural gas) as a fundamental feed stock for manufacturing production of all kinds make Illinois a good bet for production and good profits.
According to the Chemical Industry Council of Illinois, chemical related product sales in our state went from $5 billion in 2007 to $8.5 billion in 2011. Much of that increase in production can be attributed to the availability of cost competitive natural gas.
Morris, Illinois based Aux Sable Liquid Products has a facility that processes 2.1 billion cubic feet per day of natural gas (the largest in the Lower 48). The growth of natural gas supply and demand has meant huge growth for the company, going from 45 employees in 2001 to more than 185 today – with more growth opportunities projected in the near future.
The Bottom Line: In the past, the price volatility of natural gas has kept business from making major capital investments that would tie the company to relying on the energy source. No one can predict the future, but as you look at the price stability of oil, natural gas and electricity going forward, natural gas is on a level playing field. A growing number of businesses are making investments with that in mind which brings choice to the marketplace and jobs to our state and country.
So as you keep reading about the growth of hydraulic fracturing to recover natural gas and encounter criticism of the industry, remember that increased supply means lower prices, which in turns means lower heating bills, a competitive energy market and more opportunities for Illinois companies. That’s a trifecta we can all live with.
Douglas L. Whitley is president and CEO of the Illinois Chamber of Commerce.