Viewpoints - Oil & Gas Industries Power US Manufacturing
By Brian Papke
The US is currently one of world’s most attractive places to manufacture. In fact, after years of decline, a larger percentage of the U.S. GDP is attributable to manufacturing. One factor for that has been a continuous drop in the cost of energy—specifically oil and natural gas. Thanks in large part to hydraulic fracturing, or “fracking,” for extracting oil and gas from shale formations, the US could be considered a low-cost industrialized country for energy.
As we advance into 2013, many US manufacturers have cautiously lowered capital equipment purchase expectations as compared with those made in 2012. While there are always short-term corrections or adjustments needed, the trend is favorable for the oil and gas industry as US energy independence moves closer to becoming a reality.
The oil and gas industry segment shows positive signs of growth and will continue to drive opportunities for manufacturers supplying them with machined components. There will be an increased need for new and innovative manufacturing technologies that will help meet growing demand and increase overall productivity.
We expect to see an increasing amount of manufacturing technology that is matched specifically to oil and gas applications. Such technology includes reliable rugged machine tools with long boring bar and deep milling capabilities, as well as high-horsepower, large bore, multiple spindle/multiple turret machines and those with bigger overall work envelopes. But most importantly, full five-axis multitasking machine technology will continue to advance and allow shops supplying the oil and gas industries to improve productivity by providing the capability to quickly and efficiently complete all a component’s necessary machining operations in one setup.
Our goal is to provide manufacturers within the oil and gas production industry machining solutions specific to their needs. In particular, we see automation playing a larger role in meeting increased production demands. The most effective of such automated systems are those that allow for combining different types of machine tools/machining processes into the same manufacturing cell or even into a single machine platform.
Our PALLETECH automation system, for instance, allows those manufacturers serving the oil and gas industries to combine our ORBITEC 20, a special machine designed specifically for larger valve-type components, our high-performance Horizontal Center Nexus Machining Centers and Integrex e Vertical Multitasking machines into the same cell. Such cells boost part accuracy and provide lights-out production.
Currently, advanced manufacturing and automation technologies are more vital than ever within the oil and gas industry. They play key roles in supplying the machined components necessary for the quick and cost effective extraction of expansive oil and gas deposits from shale formations.
Consider the significant benefits for this country if energy independence is achieved. Almost immediately, our currency would increase in value because of the improved balance of payment situation. Manufacturing will further increase in areas close to where oil and gas drilling is taking place, and companies directly supplying drilling operations will see major surges in work orders. A huge number of new jobs, value-added jobs, would be created, in turn, creating even more jobs.
But all the benefits of shale oil and gas, or even energy independence for that matter, will never be realized until there is a working partnership between the government, industry and the public. The current administration is pro-energy, but it continually creates hurdles for the oil and gas industry. Of course, we must be environmentally conscientious, but organizations with their own agendas continue to hinder the progress of the greater good that can come from energy independence.
The US infrastructure is also holding back progress, especially in terms of pipelines and refineries. The government continues to block pipelines that would provide cost-effective transportion of oil and gas to refineries. On top of this, there is a shortage of refinery capacity in this country.
We must thoroughly consider the oil and gas industries and the opportunities they afford for energy independence. Combine those with the reasonable prices for oil and gas in this country, and the US could actually become a net exporter. That may not happen for quite some time, but clearly the opportunity is there. For now though, low energy costs remain a contributing factor in keeping US manufacturing on the upswing and driving the reshoring of work back to the US. ME
This article was first published in the February 2013 edition of Manufacturing Engineering magazine. Click here for PDF.