Ohio now has a plastics manufacturing edge over China, thanks to increased availability of shale-based oil and natural gas.
That's the conclusion of a study conducted by the Shale Crescent USA trade group and released by state agency JobsOhio. Officials with those groups recently commented on the study on a webinar hosted by Plastics News.
The study, using data from machinery maker Milacron and other sources, compared the costs of plastics production in Ohio vs. those in Zhejiang, China. Its results "dispel the long-held belief that plastic-based goods are cheaper to import than to manufacture locally," officials said in a news release.
"Long-term fundamental shifts have changed the playing field," Nathan Lord, president of Marietta, Ohio-based Shale Crescent, said during the webinar. "Ohio, Pennsylvania and West Virginia have developed their oil and natural gas industries, and that's unlocked opportunities for manufacturing."
Energy firms in those states have been able to access those resources in the last 20 years through a combination of horizontal drilling and hydraulic fracturing (fracking) technologies.
"The world is short on energy and the U.S. has energy in abundance," Lord said. He added that recent U.S. natural gas prices of $6 per unit are far less than those in Europe, where the war in Ukraine has impacted access to Russian oil and natural gas.
"The cost model now looks at who can deliver plastic products cheaper, based on transportation, feedstocks and wages," Lord said. "We can offer profitability, reliability and sustainability."
U.S. energy firms are looking to reverse trends that have seen imports of plastic goods from China rise greatly over the last 20 years, while U.S. manufacturing jobs have declined. U.S. natural gas production has increased since 2005, after being in decline since the mid-1970s.
"If the Shale Crescent area was a country, it would be the No. 3 natural gas producer in the world," Lord said. "We can build on top of the feedstock and in the center of customers. It's the only place in the world where you can apply that to the entire plastics value chain."