Though the President didn’t mention the word energy in his national address last week, ACC President Cal Dooley thinks the best way to grow the economy and create jobs is to ensure the continued robust development of domestic shale gas.
Shale Gas Can Manufacture Jobs
By Cal Dooley
CEO, American Chemistry Council
President Obama’s proposal to jumpstart the economy will help, but more can be done. American manufacturing, in particular, can be a major jobs engine, if we make energy part of the strategy. One of the most promising opportunities for manufacturing jobs, shale gas development, cannot be overlooked.
Natural gas can help revitalize the nation’s industrial base. Between 1999 and 2005, U.S. natural gas prices quadrupled, and manufacturing shed more than 5.5 million jobs. More than 140,000 of those jobs were in the chemistry industry, which relies on natural gas for heat and power as well as a raw material for thousands of products.
Fortunately, with the new domestic shale gas discoveries, that worrisome trend has reversed. Chemical companies have announced huge new investments in large-scale manufacturing facilities from the Gulf Coast to Appalachia. Natural gas from shale has transformed the U.S. chemical industry’s international competitiveness: Despite a poor economy in 2010, chemistry exports increased 15 percent, shifting the industry’s balance of trade from a $140 million deficit two years ago to a $4.6 billion surplus.
Shale gas can help many of the states hardest hit by the Great Recession. As we have begun to see already, states like West Virginia, Ohio and Pennsylvania are prime locations new petrochemical facilities or expanded production, given their vast shale gas resources. A recent American Chemistry Council study found that a new petrochemical complex in Ohio would generate $7.5 billion in new chemical industry output, 17,000 Ohio jobs in chemistry and supplier industries, $1 billion in wages and $169 million in state tax revenue.
Nationally, our study projected nearly 400,000 new jobs in chemical and supplier industries, boosting U.S. economic output by more than $132 billion. Many of these are advanced manufacturing jobs the United States wants to expand. Chemistry companies are leaders in developing next-generation energy-efficient and clean energy products and technologies used in everything from lightweight automobile parts and building insulation to solar panels and lithium batteries. In a very real way, we are one of today’s ‘green jobs’ industries.
The National Petroleum Council’s North American Resource Development report, published today, attests to the importance of natural gas to the chemistry industry: “The availability of abundant low cost natural gas is helping to revitalize several industries, including petrochemicals, leading to several billions of dollars of new investment in domestic industrial operations that would not been anticipated half a decade ago…When manufacturers use natural gas as a fuel and feedstock, they create a variety of products that are used every day. These products are valued at greater than eight times the cost of the natural gas used to create them, providing significant benefit to the nation’s economy.”
In his speech, President Obama asked: “What’s the best way to grow the economy and create jobs?” One answer is to ensure continued robust development of domestic shale gas.