The availability of cheap and plentiful natural gas and natural gas liquids (NGL) from shale formations in the United States has led to more than $100 billion of investment in the nation's chemical industry, the American Chemistry Council (ACC) said Thursday.
According to the ACC, 148 projects valued at $100.2 billion have been announced as of February. That is up from a December tally of $91.2 billion (see Daily GPI, Dec. 30, 2013). The projects, which include new factories and the expansion of existing facilities, could lead to $81 billion/year of new output from the chemical industry and 637,000 permanent new jobs by the year 2023. ACC added that more than half of the investment was from firms based outside the United States.
"This is a historic milestone for America's chemical industry and proof that shale gas is a powerful driver of manufacturing growth," said Cal Dooley, CEO of the ACC. "Thanks to the shale gas production boom, the United States is the most attractive place in the world to invest in chemical and plastics manufacturing. It's an astonishing gain in competitiveness."
The ACC predicted the permanent jobs created by 2023 would include 55,000 jobs in the chemical industry and 314,000 in the supplier industries. Another 267,000 indirect jobs would be created "in communities where [chemical industry] workers spend their wages," the ACC said. Another 222,000 temporary jobs would be created during the capital investment phase, which will peak in 2016.
Dooley said the ACC was "encouraged" by President Obama's recent State of the Union address, where Obama pledged to cooperate with the energy industry to get new factories that use natural gas built (see Shale Daily, Jan. 29).
"Given the enormous benefits of shale-related manufacturing, we are encouraged by President Obama's pledge to help make sure these projects happen," Dooley said. "We're glad the White House agrees that regulatory permitting issues must not be a roadblock to new U.S. investment, and we are excited to get these projects approved and built."
The ACC said companies looking to build new factories or expand existing ones "face a complex permitting process that includes federal, state and local requirements. To go forward, these companies need certainty as to the processes and timing for obtaining permits.
"Other policies key to realizing the shale gas opportunity include access to domestic natural gas resources; responsible, state-based regulation of production; and rapid development of infrastructure to transport supplies."
Last May, the ACC reported that nearly 100 chemical industry projects driven by shale gas development would generate $20 billion in federal, state and local tax revenue by 2020 (see Shale Daily, May 21, 2013). Thursday's announcement was an update to the ACC report released at that time, "Shale Gas, Competitiveness, and New U.S. Chemical Industry Investment -- An Analysis of Announced Projects."