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U.S. on Track for $71.7 Billion in Investments, More Than 530,000 Permanent New Jobs
WASHINGTON (May 20, 2013) – The American Chemistry Council today released a new report examining the potential economic benefits of U.S. chemical industry investments linked to robust and affordable supplies of natural gas from shale. The third in a series, the report analyzes nearly 100 chemical industry investment projects that have been publicly announced through the end of March 2013.
Abundant supplies of shale gas have transformed America’s chemical industry from the world’s high-cost producer five years ago to among the world’s lowest-cost producers today. As a result, the United States enjoys a decisive competitive advantage in the cost of producing basic petrochemicals. Dozens of companies have announced plans to expand U.S.-based production capacity. Much of it is geared to export markets for chemistry and plastics products, which can help improve the U.S. trade deficit.
“The United States has become a magnet for chemical industry investment, a testament to the favorable environment created by America’s shale gas as well as a vote of confidence in a bright natural gas outlook for decades to come,” said ACC President and CEO Cal Dooley. “What’s especially exciting is that half of the announced investments are from firms based outside the United States, which means our country is poised to capture market share from the rest of the world.”
ACC’s report, entitled “Shale Gas, Competitiveness, and New U.S. Chemical Industry Investment—An Analysis of Announced Projects,” examined 97 announced chemical and plastics projects totaling $71.7 billion in potential new U.S. investment. By 2020, the projects can lead to the creation of 46,000 chemical industry jobs, another 264,000 jobs in supplier industries and 226,000 ‘payroll induced’ jobs in communities where workers spend their wages, generating $20 billion in federal, state and local tax revenue. Nearly 1.2 million additional, temporary jobs will be created during the capital investment phase that occurs between 2010 and 2020.
Government policies will strongly influence whether the United States is able to realize the shale gas opportunity. Needed policies include access to natural gas reserves on government and private lands; reliable infrastructure to transport supplies; timely permitting of new construction or expansion projects; and implementation of responsible, state-based regulations for natural gas production. “Right now, the chemistry industry has the confidence needed to drive new U.S. investment,” the report concluded. “Policymakers can help ensure that confidence continues for decades to come.”
The study employed the IMPLAN input-output methodology, an economic model that quantifies interdependencies among industries or economic sectors. IMPLAN is used by government agencies including the Army Corp of Engineers, U.S. Department of Defense, U.S. Environmental Protection Agency, and over 20 others, and by over 250 colleges and universities, local governments, non-profits, consulting companies, and other private sector companies.
The report released today is the third in a series studying the potential economic benefits of shale gas. The first report, released in March 2011, examined the economic impact of increased petrochemicals production based on a hypothetical 25 percent increase in ethane supply. The second report, released in May 2012, considered the impact of lower natural gas prices and renewed competitiveness on a broader segment of the U.S. manufacturing base. It looked at the supply response in eight key industries: paper, chemicals, plastic and rubber products, glass, iron and steel, aluminum, foundries and fabricated metal products.
The full-text of the new report is available at http://chemistrytoenergy.com/shale-study.