Each segment of the transportation and logistics industries – railroads, trucking, shipping, and airlines – is experiencing the dramatic impact of the shale energy revolution.
January 19, 2014
The shale energy revolution is gaining speed in the United States, transforming the way we do business. A recent article in The Wall Street Journal called it “one of the biggest forces to hit the US economy in modern history.”
Transportation and logistics (T&L) companies are experiencing the immediate and dramatic impact of this revolution. They are essential to the movement of people and equipment to the shale fields and the transportation of shale oil and gas from the fields to processing plants. Longer-term, there will be additional opportunities for transportation and logistics companies as the major energy players in the United States look to export liquefied natural gas (LNG) derived from shale. There are currently about 20 applications before the US Department of Energy from companies wanting authorization to export LNG.
Shale energy is also having a major effect on the chemicals and manufacturing industries in this country, with clear ramifications for transportation and logistics companies. This new source of abundant, low-cost energy is proving to be a significant incentive for chemical producers and manufacturers to shorten their supply chain and bring production facilities back to the United States. A revived manufacturing sector would increase the need for rail and trucking to move more products domestically and for shipping exports abroad.
This paper looks at the implications of shale energy for different segments of the T&L industry.