Robust and affordable supplies of natural gas from shale are providing enormous economic benefits for Louisiana that will endure for decades, Martha Moore, ACC senior director of policy and economics, said in a recent interview with New Orleans radio station WWL.
Moore highlighted the findings in a recent IHS report, which projected a shift in global competitiveness to the U.S. for the chemical industry and the manufacturing sector, due in large part to a sustained price advantage for natural gas liquids (NGLs) such as ethane.
NGLs are the principal feedstock for basic chemicals and plastics in the U.S., while foreign competitors use more expensive, oil-based naphtha. IHS sees NGL production doubling to 3.8 million barrels a day by 2020.
According to Moore:
It’s a great opportunity for Louisiana and for the country as a whole. Louisiana is already the second-largest chemistry-producing state, with over $68 billion in output, and we do anticipate that will grow substantially as these investments come online.
A recent ACC report found that investment in the chemical industry, including facilities in Louisiana, has already begun. As of early September, 126 chemical-industry projects representing $84 billion in capital investment have been announced, more than from overseas companies.
But the glowing economic prospects extend beyond the chemical industry, Moore said:
Whenever you build a new chemical plant, you are also going to provide employment for industry in the supply chain. And workers in those industries, and those in the chemical industry, get paid very good wages, and they go out and spend those wages in the community.
That’s good news for Louisiana—and America during difficult economic times.