WHEELING, W.Va. — An advocacy group for the natural gas industry is touting a new study which claims the United States, thanks to the development of gas and refinement capacity in the Upper Ohio Valley, can now compete on a level playing field with China.
Shale Crescent USA spokesman Greg Kozera said, in fact, that playing field may actually tipped in the favor of the United States.
“Not only can you compete but we can win because you can make stuff cheaper here than the Chinese can,” Kozera said during a recent appearance on Metro “Talkline.”
The study conducted in partnership with Jobs Ohio showed the top three costs of manufacturing in the plastics industry were energy, raw materials and transportation. Kozera said for the first time, it’s definitive proof labor isn’t the economic hurdle which has long been considered the obstacle to competing for manufacturing capacity with the Chinese.
“Labor was such a small percentage, from the bar graphs in the study, you can barely see it,” he explained.
What is the latest study regarding the impact of natural gas on plastics production? @GregKozera joins @HoppyKercheval and provides the analysis from this study. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/GU3mGd936d
— MetroNews (@WVMetroNews) December 28, 2022
Meanwhile, the availability of raw materials, specifically polyethylene and the lack of having to travel a great distance to get those materials significantly reduced the cost of making a lot of plastic products in Ohio, Pennsylvania and West Virginia as opposed to the manufacturing region of China.
According to Kozera, more natural gas is pumped from the three state region of the U.S. than all of China. He added a Shell cracker facility in western Pennsylvania is now operational and providing raw feedstock for plastics makers in the region. The location has eliminated the thousands of miles China still has to cover to obtain raw materials from the Middle East. China is also forced to ship overseas the finished products. The costs are enormous and have exploded in recent years.
Kozera said the hurdle now is to convince domestic producers the study’s results are accurate. He said the long held claim about cheap labor in China is no longer the case, but changing minds of those who have been engrained with the mindset is tough.
“We really have the opportunity, but the challenge is to get companies to see and grasp the opportunity they have,” he said.