Greg Kozera is a professional engineer and an environmentalist with more than forty years of experience in the natural gas and oil industry. He is also director of marketing for Shale Crescent USA, a non-profit economic development, marketing, and research organization focused on creating jobs by promoting the abundant natural resources available in Ohio, Pennsylvania, and West Virginia. Below, Kozera lays out the case for a return to domestic manufacturing of plastic-based goods.
MPT: What are some of the big changes you see for U.S.-based manufacturing?
Greg Kozera: There’s been a long-held belief that plastic-based goods are cheaper to import than manufacture locally. But a recent study from Shale Crescent USA dispels that. It revealed that the low-cost gas and natural gas liquids flowing from the U.S. shale gas revolution have the potential to turn the $53 billion U.S. plastics importing industry on its head.
MPT: Which regions appear best positioned to take advantage of this future?
Greg Kozera: The Midwest and Northeast are uniquely positioned to fuel further growth in U.S. manufacturing. Of the $53 billion in imports, nearly half originate in Asia, with China alone accounting for $25 billion.
The pandemic showed how dependent we were on China for essential products. U.S. companies responded. Companies aren’t coming here just to be patriotic or to help consumers. We are seeing reshoring of manufacturing.
MPT: What advantages are located to these regions?
Greg Kozera: No longer known as the Rust Belt, the Ohio River Valley states of Ohio, Pennsylvania, and West Virginia form a region that is unique for manufacturers. It is the only place in the world at scale where a company can build on top of its energy and feedstock and in the middle of its customers, thus eliminating unnecessary transportation.
Ohio businesses and manufacturing facilities are located within a day’s drive of 50 percent of the U.S. population and over 70 percent of the end-to-end plastics industry supply chain. That same radius also captures over one-third of the country’s natural gas production, creating substantial environmental advantages by eliminating the need for lengthy, fragile global supply chains, and their associated greenhouse gas emissions.
MPT: What other insights did your study reveal?
Greg Kozera: The Shale Crescent USA study also found that forces of supply and demand are positioned to positively impact U.S. resin prices. The United States is a net exporter of polyethylene and China is a net importer. The United States uses low-cost natural gas to produce resin while China uses more expensive oil-based naphtha.
Ohio, West Virginia, and Pennsylvania combined now produce over one-third of U.S. natural gas supply and over one and a half times more natural gas and natural gas liquids than the entire country of China.
MPT: In addition to natural resources, what other benefits can the domestic market provide?
Greg Kozera: Another revealing aspect of the study is Ohio’s advantage in the realm of workforce demands and labor rates. There has been a tenfold increase in China’s manufacturing wages over the past twenty-five years as well as ongoing annual wage increases.
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