Ensuring access to low-priced natural gas will give Nucor
Corp., along with other U.S. steelmakers, a competitive edge in
global markets, according to president and chief executive
officer of the Charlotte, NC-based steelmaker, John
But, that advantage
could be under pressure given subsidies by foreign governments
to steelmakers and overregulation, Ferriola told participants
during CRUs North American Steel 2013 conference in
Chicago Nov. 11.
"The entire U.S. steel
sector has advantages going for it that should make the U.S.
the low cost producer of steel in the world, absent foreign
government subsidies to their industries," he said.
Production of oil and
natural gas has increased 26 percent in the last half decade,
Ferriola said, which has led to announcements of billions of
dollars worth of domestic industrial projects.
Nucor consumes some 30
to 35 million MMBTU per year of natural gas at its steel
facilities, and with its direct-reduced iron facility set to
open in the near term, it will use another 25 to 26 million
"Phase one (of the DRI
facility) doubles our annual consumption making Nucor one of
the largest consumers of affordable gas," he added. "Having a
long-term supply of affordable gas is very important to
But local and federal
government regulation, including those on hydraulic fracturing,
could hurt steelmakers. With the U.S. Environmental Protection
Agency studying the influence of "fracking" on drinking water
expected next year, the impact could be detrimental.
significantly increase drilling costs or stop it altogether,
that will drive down supply and will drive up price," he said.
Overzealous government agencies that put too much of a
restriction on it has a very negative impact on oil going