Ranked #10: Energy Availability & Costs | energy availability, energy costs, Natural gas

The Future
The supply of crude oil and its derivatives such as diesel, jet fuel, and gasoline will not dwindle in the near future; however, they will become progressively more expensive over the next several decades. Also, thanks in part to industry and power generation switching to natural gas from 1970 to 1990, there will be a tightening of conventional natural gas in the near future.3 In spite of the proliferation of liquid natural gas (LNG) facilities, this will not have a major impact on the industry as a whole; instead, the selective sponsors/users of these facilities as a primary fuel source will be the real beneficiaries.

For instance, anyone who has performed a site search in the Midwest has seen a high level of interest in ethanol plants. Just how much of an impact this will have on energy prices remains to be seen. Of particular recent interest is the prospect of synthetic fuels produced from coal that can produce both natural gas (SNG - synthetic natural gas) and liquid fuel. Currently, the United States has an 800-year supply of coal at present consumption rates, and this represents only a small fraction of the world's coal supply. There is considerable interest by both the federal government and private sector to invest in this technology. These investments are not small, nor are the levels of employment and compensation associated with them. The recruitment of one of these technology sectors would be a huge economic development windfall for any community.

In sum, even though the 2005 Corporate Survey indicates energy costs were not as important as in the previous year, this should be considered in the context of when the survey was taken. Energy costs are rising and will continue to do so - and will become increasingly important to virtually every business enterprise, since the costs will flow through all aspects of manufacturing and logistics. Those communities that recognize the "opportunities" associated with helping industry manage these costs, while capitalizing on the product innovations that will be a natural consequence, will be the winners. The most pressing opportunity is through collaborations with industry, academic institutions, and public-policy initiatives to foster energy savings and promote product innovation. Investment in alternative fuels manufacturing is only a small percentage of what it will be in the next two decades.

1 Nymex Crude Future Price at 12:39 quoted from http:www.bloomberg.com/energy/
2 Deregulation Heats Up Power Bills, Thursday, Aug. 3 2006, U.S. News & World Report, 8-2-06
3 The Future of Energy in Manufacturing, Dr. John R. Wilson, Target Volume 21, Number 2.

About the Author

Ed McCallum, Senior Principal, McCallum Sweeney Consulting

Ed McCallum has 27 years of experience in site selection. Major site selection and economic development clients throughout his career at McCallum-Sweeney have included Nordex, Zarges Gmbh, PACCAR, LM Glasfiber, Weil McLain, Mistubishi, Boeing, Kasle Steel, and International Shipholding Corporation, among others.

Area Development Homepage >> Top Site Selection Factors >>

About the Author

More articles by Ed McCallum

12/09/2013

12/06/2013

12/06/2013

12/06/2013

12/06/2013

12/06/2013

12/06/2013

Area Development Online Research Desk

Aaron Ahlburn, Jones Lang LaSalle

Richard H. Thompson, Jones Lang Lasalle

Area Development Online Research Desk

Area Development Online Research Desk

Area Development Magazine Special Presentation

Area Development Online Research Desk

Greg Matter, Jones Lang LaSalle

Area Development Online Research Desk

Area Development Online Research Desk

SPECIAL PRESENTATIONS

Top States for Doing Business 2013: Site Consultant Survey Results

2013 Gold Shovel Awards: Recognizing Excellence in U.S. State Economic Development

Leading Locations for 2013: Ranking MSAs for Economic & Job Growth

27th Annual Corporate Survey & 9th Annual Consultants Survey Results

The States Leading the U.S. Manufacturing Resurgence

Area Development Exclusives

SPECIAL PRESENTATION »

SPECIAL PRESENTATION »

SPECIAL PRESENTATION »

ECONOMIC DEVELOPMENT DIRECTORY »

SITE SELECTION/FACILITY PLANNING »

BUSINESS GLOBALIZATION »

BUSINESS GLOBALIZATION»

Share







Privacy policy / GuidelinesArea Development will select a number of questions to answer each week. An Area Development representative will contact the submitting reader directly with feedback. Additionally, all submissions are eligible to appear online or in our print publication. If your question is selected for publication we will include and publish your first name, job title and industry only. The full identity of the submitting reader will not appear in published format.Area Development will not publish, share with any third parties, or use for marketing purposes any personal information submitted here without the express consent of the submitting reader.