Kickstart: Slowing investments in shale production?

The shale oil and gas industry has been a big boost to North America's plastics industry. Resin manufacturing that uses feedstock from shale fields has led to booming business along the Gulf Coast, in Appalachia and in Canada.

But even though production and prices are stable, could shale growth have a limited future?

Neil Mendes, CEO of Fort Worth, Texas-based engineering and material testing firm Alpine Polytech LP, tells Bruce Meyer from our sister paper Rubber News that rising costs — in part due to higher interest rates — and relatively steady global oil and gas prices of about $80 per barrel means some companies may not be willing to make big investments in new drilling sites without the promise of big payoffs.

"If the cost of money is high, and you're drilling for oil, which has traditionally been a $40 to $50 a barrel cost ... and you have to borrow money to do it at a higher [interest] rate, that pushes that cost per barrel of oil into the $60s to produce new oil," Mendes said.

If oil companies can only get $70-$80 for each barrel, that means there's a slimmer profit margin available.

Established shale fields will continue to be in demand, he said, so energy companies likely will focus on those rather than pouring money into new developments.

Financial forecasting has never been easy. Now take every fiscal issue that has risen in the past few years — inflation, worker shortages, the pandemic, supply chain problems — and add to it concerns about the stability of banks.

As Plastics News Economics Editor Bill Wood notes in his latest column, no one expected a run on Silicon Valley Bank or its rapid collapse, and while there appears to be no widespread contagion within banking, it is something to watch.

The SVB failure does add to the focus on the U.S. Federal Reserve and whether its members will increase interest rates again when they meet today. The Fed has been raising rates in a move to control inflation, but whatever move it takes will face scrutiny.

"If the Fed decides to stop raising rates, or even take a pause, due to worries about the financial sector, can we be sure they have done enough to get the rate of inflation down to an appropriate level?" Bill asks. "And is there a chance, that in all of this uncertainty, the financial markets will lose faith in the Fed's policy reactions and then start to panic?"

You can catch up with Bill's thoughts here.

The Inspired Home Show — previously known as the International Housewares Show — included a treat for the makers of products for "mans' best friend."

Dexas International Ltd., a Texas-based maker and designer of plastic and silicone housewares and pet products, took home a Gia award for best product design for its "snack and distract" mat.

Pet owners can pop the tactile mat onto a wall or floor to keep dogs occupied while they're being groomed or getting a bath because "sometimes you just need your dog to chill out and relax."

Among other winning designs with plastics content: a juicer from Dreamfarm, hand kitchen tools from Sharple and a paper towel holder with an integrated pump for cleaning liquid from Simplehuman.