Increased drilling operations in states like Pennsylvania, North Dakota and Arkansas have resulted in economic growth not just in the areas close to drilling sites but across the entire country, a new study by market research company IHS has found.
The research, funded by the American Chemistry Council and the American Petroleum Institute, claims that as a consequence of rising oil and natural gas production the United States is seeing a wave of fresh capital investment in chemical plants, processing equipment and assembly lines, Bloomberg reported.
Daniel Yergin, vice chairman of IHS, commented that the boom in oil and gas production has far-reaching implications that go beyond the energy sector and affect the entire U.S. economy.
The research predicts that between 2012 and 2015 the total investment in infrastructure, including pipelines, processing facilities and other equipment required to convert natural gas to a range of energy-related chemicals will reach $346 billion.
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Over the same period, investment in new manufacturing facilities alone will come in at about $100 billion, IHS estimated. Several big companies, including Chevron Phillips Chemical Co., ExxonMobil Chemical Co., Formosa, Shell Chemical and Dow Chemical Co., have already announced plans to build new ethylene plants.
The majority of these new facilities will be located in the vicinity of existing infrastructure and close to oil and gas drilling sites, which will minimize transportation costs and the need for major new infrastructure projects, the study noted.
