According to Bloomberg News, the U.S. shale boom may benefit more than just homeowners who heat their houses with natural gas.

Shale gas could also lower the cost of other fuels.

Read it:

“A Chesapeake Energy Corp.-backed company and Oxford Catalysts Group Plc are planning U.S. factories to make diesel, gasoline and jet fuel from gas, which fell to a decade-low price this year. Their goal is to make motor fuels more cheaply and easily than oil-based products produced at giant refineries, and all within two years.”

OxFord Catalysts is planning on opening a factory in Pennsylvania to take advantage of the Marcellus Shale. Production is planned to begin by the end of 2014.

The factory will use a process known as Fischer-Tropsch, which is named after the German scientist who developed it in the 1920s.

The Fischer-Tropsch process takes natural gas, breaks it down and then recombines it to make oil. After it’s converted to oil it can then be refined into diesel or jet fuel.

Germany commercialized the process in the 1930’s and manufactured enough liquid fuel to provide 95 percent of the country’s aviation fuel during the Battle of Britain.

Verdict

It’s hard to tell whether or not turning Ohio and Pennsylvania’s natural gas into liquid fuels will lower the cost of energy to consumers because oil is a global market. Though a new refinery or factory would create jobs in the area.

» Via: Bloomberg News › Shale Glut Becomes $2 Diesel Using Gas-to-Liquids Plants