Contact: Warren Robinson (202) 306-3623
Report says United States could become a “major, global, low-cost provider
of energy and feedstocks to the chemicals industry”
WASHINGTON, D.C. (October 10, 2012) – The American Chemistry Council (ACC) released the following statement in response to a new report by PricewaterhouseCoopers LLC (PwC U.S.) on the potential impact of shale gas production in spurring new investment in the chemical industry and a broad range of manufacturing sectors.
“This week's report reiterates the growing consensus that shale gas is spurring a renaissance in American manufacturing. The PwC report finds that for chemical manufacturers, and a wide range of other sectors of the American economy, natural gas has the potential to boost manufacturing competitiveness and spur new waves of economic investment,” said Cal Dooley, President and CEO of ACC.
The report estimates that the U.S. chemical industry has invested $15 billion in ethylene production, increasing capacity by 33 percent. Produced from natural gas liquids, ethylene is used as a “feedstock” for the U.S. chemical industry, whose products are used in 96 percent of all manufactured goods. The relatively low price of natural gas gives U.S. manufacturers an advantage over many competitors around the world that rely on naphtha, a more expensive, oil-based feedstock.
“We are already seeing a significant increase in capital investment by chemical and other manufacturing industries in the Appalachian region and along the Gulf Coast. Thanks to these new supplies of affordable, abundant natural gas, we expect that as many as 30 chemical projects could be developed in the United States over the next five years. This means a more competitive manufacturing sector, more jobs and a growing economy,” Dooley said.
A modest increase in natural gas supply from shale deposits would generate more than 400,000 new jobs in the United States, more than $132 billion in U.S. economic output and $4.4 billion in new annual tax revenues, according to a report released last year by ACC.
In addition to a boost for chemical manufacturers, the PwC report notes that other manufacturing sectors “may be able to take advantage of low-cost chemicals to create plastic-based substitutes for other materials,” and that low natural gas prices could create an incentive for companies to expand production facilities in the United States.
Learn more about shale gas.