US fracking boom gives Dow advantage over European competitors

Shale gas, where water and chemicals are forced underground to extract gas in a process known as fracking, is heralding a resurgence in American manufacturing as energy costs fall and companies can procure raw materials at a cheaper rate.

Dow paid about $1 billion less for its feedstock and energy costs in the 2nd quarter. Shale gas and investments on the U.S. Gulf Coast have the potential to drive Dow Chemical earnings up by about $2 billion a year in 2017.

The U.S. shale gas advantage has bigger implications than today’s energy prices. Gas prices in America is leading to new chemical production capacity being built.

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