Plentiful, affordable and long-lasting supplies of natural gas from shale have created a decisive competitive advantage for America’s chemical manufacturers that is attracting billions in potential new investment to the United States, increasing exports of manufactured goods and creating jobs, American Chemistry Council (ACC) President and CEO Cal Dooley said Tuesday on Capitol Hill.
The surge in the supply of natural gas and the drop in price has transformed the U.S. chemical industry from the world’s high-cost producer five years ago to among the world’s lowest-cost producers today, Dooley said at the Senate Energy and Natural Resources Committee’s Natural Gas Forum on Domestic Supply and Exports.
As a result, Dooley said, dozens of companies are making plans to invest in new U.S. chemicals production capacity and about half of those are from firms based abroad. Much of the investment is geared toward exports of chemicals and plastics products, which can improve the U.S. trade balance, Dooley said.
An ACC report released yesterday examined nearly 100 chemical industry investments announced through March 2013 and valued at $71.7 billion.
By 2020, the report found, the announced projects could lead to the creation of:
- 46,000 direct chemical industry jobs
- 264,000 indirect jobs in supplier industries
- 226,000 “payroll-induced” jobs in those communities where those workers spend their wages
Government policy decisions will affect whether the U.S. realizes all the benefits promised by natural gas, Dooley reminded participants at the hearing.
Policies must ensure continued access to oil and natural gas reserves on federal and state lands; ensure reliable infrastructure to link natural gas production to chemical facilities; help continue state-based regulation of unconventional oil and natural gas production; preserve coal’s role as a source for baseload power generation; maintain accelerated depreciation schedules for chemical industry investments in new plant and equipment; and expand access to foreign markets for U.S. goods.
The bottom line, concluded Dooley:
The United States has become a magnet for chemical industry investment, a testament to a 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.