SEPTEMBER 2024
Strategic Equilibrium
The United States’ Manufacturing Resurgence and the
Role of Natural Gas in a Carbon-Competitive World
By Jane Nakano and Joseph Majkut
Introduction
A variety of forces are promoting reindustrialization of the United States. Concerned about the fragility
of long supply chains, some rms are reinvesting in U.S. production. They are enabled by government
support ranging from tax subsidies for capital investment to active support for strategic industries that
will keep the United States at the technological frontier or that relate closely to national security.
Expanding manufacturing in the United States inevitably raises questions for enery policy. Enery
security, resilience, and aordability are important factors for business competitiveness, and each
inuences how and where companies locate manufacturing facilities. Companies are also focusing on
their emissions footprints, as carbon intensity aects corporate emissions accounting and will impact
the global trade of manufactured goods due to the implementation of border adjustments in Europe
and elsewhere.
The role of natural gas in reshoring manufacturing is an important consideration for policymakers. Gas
supplied 43 percent of U.S. power in 2023, and the expansion of gas in the power sector over the last
20 years has helped to reduce emissions, expand renewables, and lower prices. As policymakers
consider how to address emissions while increasing power supply for strategic industries, they must
decide on frameworks for natural gas.
To probe these issues, this paper examines the enery requirements of some key manufacturing sectors
and their emissions implications, assesses the role of natural gas in supporting strategic manufacturing,
and analyzes the competitiveness of U.S. manufacturing from a carbon-intensity perspective. This
paper presents the key ndings from CSIS’s research—including from a literature survey, data analysis,
workshops, and stakeholder interviews—and policy recommendations on how the United States can
maintain competitiveness while furthering decarbonization.
