Chemical Industry Outlook Is PromisingChemical Industry Outlook Is Promising
August 19, 2013
Abundant and affordable supplies of natural gas from shale have transformed America’s industrial heartland, producing tens of thousands of high-paying jobs, boosting U.S. exports, and creating an unprecedented expansion of the U.S. chemical industry, American Chemistry Council president and CEO Cal Dooley said at an energy conference in Indianapolis.
Dooley spoke at the 11th Annual Indiana Conference on Energy Management, sponsored by the Indiana Chamber of Commerce and attended by business leaders, energy experts, and policy makers. Speakers addressed a multitude of energy issues, from the future of nuclear power to the importance of energy efficiency initiatives.
“Thanks to plentiful and affordable natural gas, U.S. chemical manufacturers enjoy a decisive competitive advantage in the cost of producing basic petrochemicals,” said Dooley. “The chemical industry has gone from being the world’s highest cost producer five years ago to among the world’s lowest-cost producers today. For example, it costs less than $400 a ton to produce ethylene in the U.S. That compares to about $1000 per ton in Europe and even more in Asia. This is great news for America—and Indiana, one of the nation’s top 10 chemical producing states.”
After decades of decline, chemical industry employment is increasing. Dozens of companies have announced plans to expand U.S.-based production capacity. ACC’s running tally of 124 projects— represents a cumulative announced investment of more than $83 billion. Much of the production of chemicals and plastics is destined for export markets. In 2012, the chemical sector’s trade surplus reached $800 million and ACC projects an enormous jump to $46 billion by 2020.
Roughly half of the new U.S. chemical investment comes from firms based abroad. “We are becoming a magnet for global chemical investments, a testament to the favorable business climate created by affordable shale gas and confidence in secure supplies for decades,” Dooley said.
By 2020, these projects can produce 310,000 jobs in the chemical and supplier industries, according to an ACC report. As the benefits of natural gas cascade through the economy, another 327,000 high-paying manufacturing jobs could be created in the aluminum, iron and steel, metals, plastics, and other industries.
Governmental policy decisions affecting natural gas production will influence the long-term prosperity of the U.S. manufacturing sector. ACC supports policies that encourage access to natural gas reserves on government and private lands and implement responsible state-based regulation of natural gas supplies.
“Unwarranted and unnecessary regulatory restrictions on natural gas production threaten the expanded energy supplies that are growing American manufacturing, creating jobs and helping to ensure a secure energy future,” Dooley cautioned.
Dooley has reiterated his view that Indiana and other states, not the federal government, are best equipped to oversee energy production, including natural gas from shale. “Right now, the chemistry industry has the confidence needed to drive new U.S. investment,” ACC noted in its new report. “Policymakers can help ensure that confidence continues for decades to come.”
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