Industrial Production Returning to U.S.; Will Stabilize Food Prices

Richard Ha writes:

The natural gas boom is starting to bring industrial production back to the U.S. This is going to stabilize food prices.

Products made from cheap natural gas, such as nitrogen fertilizer, plastics and other agricultural inputs, will stabilize. Then, as we start to close down oil-fired plants on the Big Island and replace the present liquid fuel with lower cost alternatives, local farmers' refrigeration chain costs and local food manufacturing costs will start to become more competitive with food imported from the mainland.

Consumers will have more discretionary income to support local farmers. As we all know, food security involves farmers farming, and if farmers make money, the farmers will farm.

From The Washington Post:

The new boom: Shale gas fueling an American industrial revival

Orascom chose Wever, Iowa, over Illinois because part of its investment will be funded by a tax-exempt bond. The Iowa Economic Development Authority approved an incentive package that is expected to provide tax relief “in the order of $100 million,” the company said.

Royal Dutch Shell has unveiled plans for a $2 billion petrochemical plant northwest of Pittsburgh, where it can use natural gas supplies from the state’s enormous Marcellus shale formation. It chose Pennsylvania despite being wooed by Ohio and West Virginia.

The broader effect

The economic growth from natural gas abundance extends to companies providing supplies to the drilling boom.

On Oct. 1, Honeywell announced that it paid $525 million for a 70 percent stake in Thomas Russell, a privately held provider of technology and equipment for natural gas processing and treatment. With the acquisition, Honeywell will offer technologies and products that allow producers of shale and conventional natural gas to remove contaminants from natural gas and recover high-value natural gas liquids used for petrochemicals and fuel….

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