The United States is undergoing an unprecedented oil and gas revolution. In fact, this boom is creating a situation where the United States offers logistics and transportation advantages that are fueling what is fast becoming a manufacturing renaissance. Secretary of State John Kerry emphasized these points to a large crowd of well over 1,000 international business leaders and CEOs attending the Select USA summit in Washington, DC in early November. He stressed that the United States is on the verge of creating its greatest wealth ever from energy markets, shale gas in particular – one that will exceed the tech boom of the 1990s that created an unprecedented $1 trillion market with one billion users. “The global energy market is a $6 trillion market that will claim up to four billion users and climb to maybe six or nine billion users in the next 40 to 50 years,” he said. He vowed that the United States will fight to stay at the forefront of this energy market largely because of the benefits it will give the United States in swaying economic and political power around the globe. “America’s growing energy production is a game changer,” he emphasized. “We are on page—right now—to becoming the largest oil producer in the world by 2020.” In fact, Secretary Kerry stressed that the United States will become fully energy sufficient by 2030. Thanks to hydraulic fracking and drilling, opportunities are rapidly expanding in natural gas. And with that comes opportunities for breakbulk cargo since most of the project and drilling equipment ships as breakbulk. For example, new pipelines for gas and gas liquids transport are being planned and built in the United States. ONEOK Partners, an Oklahoma pipeline company, for one, recently completed the $400 million Bakken NGL Pipeline, which will transport natural gas liquids from the Williston Basin to NGL fractionation and storage infrastructure in the mid-continent and along the Texas Gulf Coast. The race to transport lucrative natural gas liquids to the Gulf Coast is running also through Kentucky and Indiana. Three pipeline proposals are competing to be first. One is the controversial Bluegrass Pipeline that would slice through Kentucky. That project has been joined by two more pipeline ventures —Williams and Boardwalk Pipeline Partners, LP, which are pushing to transport natural gas liquids such as ethane and propane from the Marcellus and Utica shale producing areas in Pennsylvania, West Virginia and Ohio to the developing petrochemical market in the Northeast U.S., as well as the rapidly expanding petrochemical and export complex in Texas and Louisiana on the U.S. Gulf Coast. Eagle Ford Shale The Port Corpus Christi has jumped on these opportunities. In fact, in late October the port was a sponsor of the Eagle Ford Shale Consortium for the Eagle Ford Shale Fall 2013 Conference. Eagle Ford Shale has been described as quite possibly the largest single economic development in the history of the state of Texas and ranks as the largest oil and gas development in the world based on capital invested. In fact, billions of dollars worth of projects with direct relation to the Eagle Ford Shale are happening throughout Port Corpus Christi. Industrial investment via foreign and domestic companies will see new facilities built within the Inner and Outer Harbor’s at the South Texas port, port officials report. According to the Eagle Ford Shale website, almost $30 billion will be spent developing the play in 2013. “The play had more than a $60 billion dollar impact on the local South Texas economy in 2012 and over 116,000 Eagle Ford jobs were supported in the 20 county area impacted by the play,” the website reports. In fact, the Eagle Ford is the most active shale play in the world with over 200 rigs running. Operators are indicating the play will be developed for decades to come. “Eagle Ford Production has outpaced expectations for five years and it should be no surprise if the area eventually produces more than 2 million barrels of oil per day,” the website contends. Further, if the Eagle Ford eventually produces between two and three million barrels of oil per day, the play by itself could land in the list of the top 10 oil producing countries in the world. “The entire world produces just under 90 million barrels of oil per day,” it says. Port Corpus Christi has several ongoing facility upgrades to handle the demand to export crude and condensates from this region. This includes additional breasting structure to handle the larger and more frequent tanker barge calls, a new barge loading dock at the west end of the ship channel, and other projects and improvements. A new proposed barge unloading facility represents a reported $35 million investment at this single facility. “Eagle Ford activity has had a remarkable impact to our Port,” says Mike Carrell, Chairman of Port Corpus Christi Commission. Representative Abel Herrero adds, “There is no doubt that the Texas landscape is changing as a result of the Eagle Ford Shale. The discovery of the shale has led to a great economic boost for Texas—especially South Texas and the Coastal Bend.” Other Projects Other significant projects in the United States include the Alaska South Central LNG Project, worth $65 billion; the Flanagan South Pipeline Project that runs from Illinois to Oklahoma, worth $2.8 billion; Sandpiper Pipeline that runs from North Dakota to Wisconsin, worth $2.8 billion, and the Cameron LNG Export Terminal located along the Calcasieu Channel in Hackberry, LA, worth $10 billion. Enbridge Energy Company, Inc. is currently constructing the Flanagan South Pipeline Project – a nearly 600-mile, 36-inch diameter interstate crude oil pipeline that will originate in Flanagan, IL and terminate in Cushing, OK, crossing Illinois, Missouri, Kansas and Oklahoma. The majority of the pipeline parallels Enbridge’s existing Spearhead crude oil pipeline right-of-way. Enbridge has also proposed to install seven pump stations including one at the Flanagan terminal and six along the pipeline route. Initial capacity will be 600,000 barrels per day. Louisiana is also attracting scores of energy related business that are expanding in the state and will be importing and exporting large pieces of breakbulk equipment. The most noteworthy is South African-based Sasol, which is proposing to build a gas-to-liquids and ethane cracker complex in Westlake near Lake Charles. The project is estimated to be worth $21 billion and is regarded the largest investment by a foreign-based company in American history. “Probably not since the Ship Channel was dug in the late 1920s or we began the petrochemical industry here in World War II has there been a bigger announcement in Southwest Louisiana,” says George Swift of the Southwest Louisiana Economic Alliance. In short, the project is considered “world scale,” meaning the products generated there will be destined for international markets and could potentially secure Louisiana’s position as the nation’s top exporter for years. Underlying the historic announcement is another key ingredient that many say is catalyzing an industrial renaissance in the United States: the advent of low, stable natural gas prices. “We are literally having an industrial revolution in the United States because of the abundance of competitively priced natural gas we’ve seen in the past two years,” says Dan Borne, president of the Louisiana Chemical Association and the Louisiana Chemical Industry Alliance. Louisiana’s extensive pipeline infrastructure and favorable natural gas climate should give fuel to at least $50 billion in new manufacturing projects in the state within the next three to four years. Industry Views A panel of leading government officials and industry executives weighed in during their Select USA session entitled “Why Select the USA: Taking Advantage of the U.S. Energy Opportunity.” “The way this country uses and produces energy are changing in ways that few people would have predicted a decade ago,” stated Heather Zichal, former White House Chief energy and climate advisor. “Take traditional energy, for example. Not that long ago we were talking about what we needed to do to site and build import LNG facilities in this country. Now there is a robust conversation about LNG exports and what the appropriate role is for those domestically.” With 120,000 employees and operations in 85 countries worldwide, Robert Drummond, president, Schlumberger North America, revealed that his company’s biggest business unit today is in the United States and Canada. While the company has operations all the way from the Arctic of Alaska to the Gulf of Mexico, Schlumberger’s biggest growth is coming from unconventional reservoirs in U.S. land in Texas, North Dakota, Pennsylvania, and West Virginia. “The shale gas and shale oil has transformed the energy outlook. What’s amazing is the oil resource face has increased by over 38 percent in just the last three years based on these changes,” he said. He added that the infrastructure in the United States is mature and complex. It includes over 2,000 active drilling rigs in the United States, which is about 41 percent of the global total, and 300,000 miles of pipeline. Eric Spiegel, CEO, Siemens, sees the energy boom as the single biggest manufacturing opportunity in the United States today. “And it is growing rapidly,” he said. Spiegel pointed out that this year some $110 billion will have been spent on capital expenditures in the value alone. By 2025, he estimates that figure will increase to some $300 billion, which is bigger than some GDP’s of some countries. “And that amount is in this industry alone,” he said. More than that he sees the greater opportunity coming from the massive investment manufacturers will make to take advantage of locating where energy costs are significantly lower. “Companies will be building lots of processing plants, chemical plants, steel plants, fertilizer plants and aluminum plants – anything that is energy intensive, in this country.” An important point is that electricity prices in Europe are about two times that in the United States; gas is around three times higher. Already steel production is coming back to the United States, giving rise to further opportunities in breakbulk shipping. For example, Spiegel reveals his company has supplied automation equipment to a new $800 tubular steel mill in Youngstown, Ohio that was build by a French company, as well as another steel plant in Corpus Christi. “The biggest opportunities for manufacturers who supply equipment to these manufacturers over the next couple of decades anywhere in the world,” he added. That includes pumps, motors, compressors, automation technology, water technology, power technology etc. Independent of the Summit, CG-LA Infrastructure, a Washington, D.C. think tank that specializes in infrastructure projects, pin pointed Energy Independence as one of six Competitiveness Visions in its 5th Annual Strategic Top 100 North America Infrastructure Projects list. These are projects that result from those newfound resources: power generation, large scale renewable projects, liquids pipelines, the infrastructure needed to support new developments, the resources drawn from new gas and oil production that pays for strategic projects. Mexico and Canada Norman Anderson, president and CEO of CG-LA Infrastructure, notes that Mexico is still to take part in this revolution since it is importing one third of its natural gas and 50 percent of its gasoline. Marvin Odum, Upstream Americas Director, Royal Dutch Shell plc, stated at the Mexican Petroleum Conference in Cancun, Mexico in June 2013 that Mexico is among the ten largest oil producers in the world. “This country has made important structural changes to improve economic performance and strengthen its resilience to external shocks,” he said. “It is a strong partner to the United States and to Canada.” While Mexico may currently be jostling with countries around the world for a share of capital investment in the energy sector, Odum notes that Mexico already has some competitive advantages through free trade agreements, its strategic location, competitive exchange rate, labor costs and quality manufacturing. “Analysis we’ve commissioned suggests attracting more capital into the energy sector could increase Mexico’s economic growth rate by as much as 5 or 6 percentage points,” he said. “And beyond economic growth, we have seen – in countries ranging from Norway to Malaysia – what else happens when countries earn investment in the energy sector: technology booms, an increase in specialized, high paying jobs, transfer of knowledge into and across the economy, higher industrial safety standards, new levels of transparency and trust in government.” In short, he contends that the energy sector could result in the coming years being Mexico’s “era.” Canada has already been reaping many benefits from its energy boom. But a Canadian Chamber of Commerce report appropriately entitled “$50 Million a Day” released in September stated that the Canadian economy is leaving as much as $50 million a day on the table because of a significant lack of energy infrastructure. It points out the fact that the United States (virtually Canada’s only foreign market for oil and gas) has dramatically ramped up its own energy production, and concludes that a lack of market access – particularly, the absence of infrastructure to transport our energy to tidewater and overseas – is costing Canada dearly. “A lack of infrastructure is preventing Canadians from maximizing their potential benefits in energy markets,” reads the report.