Introduction

A variety of forces are promoting reindustrialization of the United States. Concerned about the fragility of long supply chains, some firms 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 energy policy. Energy security, resilience, and affordability are important factors for business competitiveness, and each influences how and where companies locate manufacturing facilities. Companies are also focusing on their emissions footprints, as carbon intensity affects 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 energy 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 findings 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.