2012 proved to be an outstanding year for the U.S. business of chemistry, which seized the competitive price advantages of natural gas from shale and announced more than $40 billion in U.S. chemical manufacturing investment projects. Insourcing, at least in the chemical industry, has replaced outsourcing.
IHS Global Insight’s “America’s New Energy Future” provides reams of data bolstering these assessments. In its second installment, released December 19, IHS addressed the benefits of abundant and affordable supplies of natural gas on U.S. state economies — not just in key shale gas production states.
Here are the numbers: activities and business related to unconventional natural gas and oil will add $416 billion to the U.S. gross domestic product in 2020 — $329 billion from producing states and $86 billion from non-producing states — and will exceed $2.5 trillion in federal revenue from 2012 to 2035.
As American Chemistry Council President and CEO Cal Dooley noted:
Contrary to conventional wisdom, the 16 energy-producing states are not the only ones well-positioned to capitalize on the energy revolution. In 32 other states, natural gas from shale is creating jobs, driving economic growth and generating much needed revenue.
A recent ACC study crunched the numbers and produced some heady projections: the economic benefits of natural gas for the chemical industry could result in 1.2 million additional jobs, about $72 billion in capital investment and construction activity, and more than a 7 percent increase in manufacturing expansion.
During ACC’s annual media briefing, Dooley summarized the chemical industry’s achievements in 2012:
There is great reason to be optimistic about the prospects for U.S. manufacturers. And a lot of the work that we’ve done in 2012 as well as 2011 was really focused on ensuring that we are able to capitalize in the United States on what truly is a gift, and that is the increasing domestic supply of natural gas, primarily from unconventional sources. And there’s not one industry that is better positioned to capitalize on the increased supply of natural gas than U.S. chemical manufacturers. We have literally gone from one of the highest cost producers of chemicals four or five years ago globally, to now among the lowest cost producers of chemicals.
With policymakers and regulators clearly recognizing the critical importance of maximizing our nation’s natural gas assets, the best for American Chemistry may be yet to come.