Manufacturing comeback depends on energy development

Many of America's governors gathered in Chicago this week to discuss the opportunities and challenges facing our nation. Among these discussions was a look at how America's homegrown energy boom is fueling our economy.

It's hard to imagine a more fitting location for such a discussion than Chicago. Many predicted Chicago wouldn't rise again from the great fire; many also predicted manufacturing was an industry of the past. They were wrong on both counts. Just as the "Second City" stands strong today, manufacturing is posted to emerge stronger than ever.

Since the industrial revolution, manufacturing has been the backbone of the American economy and the key to the American dream. In fact, if the U.S. manufacturing industry were a country, it would be the eighth largest economy in the world - ahead of Canada, Russia and Mexico.

In 2013 alone, manufacturers in the United States contributed $2.08 trillion to the economy. This crucial industry creates the products we depend on each and every day, supports 17.4 million jobs in the United States and makes American innovation possible.

Manufacturers have seen tough years over the last decade, but today we stand at the precipice of a true manufacturing comeback.

The opportunity is being driven, in no small part, by access to abundant, affordable energy and raw materials that have come online in the last several years. The shale revolution and advances in other unconventional oil and gas development are game changers for the manufacturing sector, driving down both the cost of energy and the cost of important raw materials.

This abundance of affordable natural resources, combined with advanced manufacturing infrastructure, high-tech distribution networks and the ability to innovate quickly, puts America in a competitive position in petrochemical manufacturing for the first time in decades.

Developing American energy is about more than just traditional energy sources. Shale development means access to abundant ethane, one of the most important petrochemical building blocks in plastics, fibers, adhesives, coatings, cleaning agents and other materials found in the products we use every day.

That can mean lower prices and a reduction in overall costs for our domestic manufacturers, providing a strong economic incentive for them to build facilities here in the United States.

What does that mean for families in the Midwest? A recent report from IHS Global Insight suggests that by 2025, nearly 3.9 million manufacturing jobs will be supported by unconventional oil and gas development and energy-related chemicals activity. All told, that economic engine will add $533 billion each year to our GDP and contribute more than $138 billion in federal, state and local taxes.

In Illinois, the economic activity associated with shale energy production directly and indirectly supported more than 38,600 jobs and generated $4.2 billion in 2012.

By 2035, these numbers will increase to 83,000 jobs and $9.4 billion. These jobs would employ 1.1 percent of the labor force in Illinois by 2035, with annual wages above the state average.

In short, shale production means more secure families, stronger communities and a more prosperous country.

Our nation's strong manufacturing base has always been key to our economic success. To compete globally, we need policies that support increased investments in U.S. energy development, which will allow the supply chains that support manufacturing to flourish.

Energy development and manufacturing were two bright spots for the nation throughout the recession and have the potential to contribute even

more to the economy. Unfortunately, we can't do one without the other. Many governors have seized the opportunities presented. We encourage them all to follow suit. Policymakers at every level must take notice - and take action - to continue America's manufacturing renaissance. We won't get a second chance at an opportunity like the one before us today.

Jay Timmons is president and CEO of the National Association of Manufacturers (NAM), and Charles Drevna is the president of the American Fuel and Petrochemical Manufacturers.