“Three decades after being devastated by the closing of steel mills, this gritty river valley is hoping its revival will come from cheap natural gas,” The Wall Street Journal recently reported, referring to Beaver County, Pa.
Today, these Americans are standing in line to vote, many of them with energy on their mind. That’s because areas once considered rusty relics of the industrial age could soon become homes to advanced manufacturing, thanks to new, affordable supplies of natural gas from the Marcellus Shale.
Voters agree energy is a top priority
In a national survey, 94 percent of American voters agreed that “a comprehensive energy policy is essential to building a strong economy, creating new jobs, and making America more competitive with other countries.” 90 percent said they believe Congress is not “doing enough” to address the nation’s energy needs.
That’s why, in 2013, Congress and the president should continue to work to maximize the development of America’s own energy sources, including natural gas from shale. This would help to revive regions that have been slammed by the recent recession.
$40 billion in chemical industry investments
In the news, there have been several announcements of U.S. chemicals investments, totaling approximately $40 billion, in new ethane cracking plants, production expansions and restarts. These investments have a strong, collective impact on industries that rely on chemistry and plastics – including auto manufacturing, construction, agriculture, health care, and technology.
The Wall Street Journal describes Beaver County, Pa. as just one place that could reap benefits from chemical industry investments, and noted that, earlier this year, Royal Dutch Shell said it was considering building a multi-billion dollar cracker plant in the area.
This plant would turn ethane gas to ethylene, a feedstock of the chemical industry, and ethylene into the base of many major plastic and household products. Shell would expect about 400 new, permanent jobs to be created, with many more temporary construction jobs, the WSJ reported.
ACC projects that a 25 percent boost in ethane supplies from investments like these could generate 400,000 U.S. jobs, $132 billion in U.S. economic output and $4.4 billion in local, state and federal tax revenue every year. These include direct chemical industry jobs and thousands more in our supplier industries and the sectors that support all those jobs.
“The low-cost industrialized country for energy”
Beaver County and Pennsylvania are not alone. Thanks to low prices, major chemical companies that once sent production overseas are now shifting their focus back on American soil.
According to the article:
Economists at Citigroup Inc. earlier this year estimated that increased domestic oil and gas production, and the activity that flows from it, would create up to 3.6 million new jobs by 2020 and boost annual economic output by between 2% and 3.3%.
As Wall Street Journal reporter Ben Casselman says in a video report, “the surge in natural gas production has driven down prices in multiple industries.”
The end result, according to energy expert Philip Verleger:
The U.S. is going to be the low-cost industrialized country for energy. This creates a base for stronger economic growth in the United States than the rest of the industrialized world.
While homegrown natural gas is important, policymakers should also work to maximize energy efficiency’s contribution to the nation’s energy portfolio — for example, by updating building codes and supporting more combined heat and power at industrial facilities.
Decreasing energy consumption decreases operational costs for businesses, decreases costs for consumers, and helps us to remain the truly low-cost industrialized country for energy.