The U.S. chemical industry foresees an enormous increase in exports as a result of the competitive advantage delivered by the shale gas boom and, according to the Financial Times, in stark contrast with Asian and European competitors.
The London-based newspaper added:
The American Chemistry Council predicts in forecasts published this week that U.S. chemicals exports will rise 45 percent over the next five years, as a result of a wave of investment in new capacity that will be aiming at overseas markets. The U.S. has already shifted from being a net importer of chemicals in 2011 to forecast net exports of about $2.7billion this year, and the ACC expects that to rise to almost $30 billion by 2018.
The shale gas revolution has produced a surge in the production of inexpensive natural gas liquids (NGLs), especially ethane, used in chemical feedstock, the Financial Times said. NGLs are key to the chemical industry’s competitiveness. A recent IHS report forecasted NGL growth reaching 3.8 million barrels per day by 2020 – a 100 percent increase over current levels.
America’s gain is Europe’s loss, the Financial Times said, noting the plant closures and job cuts resulting from the European chemical industry’s reduced competitiveness. As European Industry Commissioner Antonio Tajani put it:
When people choose whether to invest in Europe or the US, what they think about most is the cost of energy. The loss of competitiveness is frightening.
As of early December, chemical companies have announced 136 planned or possible investments in the United States worth $91 billion, with more than half of those projects proposed by non-U.S. companies. “America is the place to be,” Kevin Swift, ACC’s chief economist, said in a recent interview. Swift added:
The U.S. chemical industry may be experiencing its own tipping point. Following a decade of lost competitiveness, the sector is re-emerging as a growth industry.
Martha Gilchrist Moore, senior director, policy analysis and economics at ACC, said the momentum has begun and will accelerate in 2015, when the first wave of projects and expansions kick in. In addition, U.S. chemical industry jobs will increase in 2013 – by 1.3 percent to 793,800 workers – for the first time since 1999, and will increase every year through 2018, Moore said.