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In a reversal from just a decade ago, the United States is once again a favorable destination for manufacturing investment, as the new economics of shale gas creates a competitive advantage for U.S. companies.
“American chemistry is back in the game,” ACC’s Martha Moore told 280 of the nation’s mayors at a conference this week in Washington, just a few days ahead of President Obama’s State of the Union Address. Greater investment, more jobs and growth are on the way, Moore said.
$91 billion and counting
With the dynamics now in place for sustained U.S. capital investment, companies near and far have begun to capitalize on the U.S. shale gas advantage.
As of early January, 136 industry investment projects valued at $91 billion had been announced. More than half of the investments are from foreign companies – including some that have not had a presence in the U.S. before. Much of that investment is geared toward export markets, which can help improve the U.S. trade deficit.
As the first wave of significant new capacity starts to come online in 2015-2016, here’s a simple breakdown of what we can expect to see:
Based on current estimates, about three quarters of the new investment will go toward projects along the U.S. Gulf Coast, with other significant investments coming to the Appalachian region and Midwest as well.
We also expect more than 200 new facilities and/or expansions to make plastic products used in consumer and industrial goods for domestic and international customers.
A game changer for U.S. competitiveness
Access to vast, new supplies of natural gas from previously untapped shale deposits is one of the most exciting domestic energy developments of the past 50 years, creating tremendous opportunities for the business of chemistry and other manufacturing industries.
The economics are simple. America’s chemical companies use ethane, a natural gas liquid derived from shale gas, as a feedstock in numerous applications. Its relatively low price gives U.S. manufacturers an advantage over many competitors around the world that rely on naphtha, a more expensive, oil-based feedstock. That translates into new, permanent jobs in local communities and economic growth across the country.
To be sure, no other country – or continent – can boast as bright of an outlook as the U.S. when it comes to homegrown natural gas.
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