ACC Welcomes New Report Highlighting the Impact of Shale Gas on Chemical Industry Competitiveness

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Dec 09, 2011, 11:37 ET

WASHINGTON, Dec. 9, 2011 /PRNewswire-USNewswire/ -- The American Chemistry Council hailed a new report by the Council on Competitiveness that said abundant and affordable supplies of shale gas could revitalize manufacturing in the United States and provide American industry a significant competitive advantage in global markets for the first time in years.

"This report verifies that reliable and inexpensive sources of domestically-produced natural gas can help jumpstart the U.S economy," ACC President Cal Dooley said. "Natural gas plays an important role in driving U.S. competitiveness, enhancing America's energy security and creating jobs in the manufacturing sector as well as exploration and production industries.

"As this report also recognized, the United States must develop an energy policy that emphasizes the development of all domestic energy resources and encourages energy efficiency," Dooley added.

The Council on Competitiveness report, MAKE: An American Manufacturing Moment, echoed the results in an ACC study, which found that reasonable increases in shale gas and ethane supplies would result in nearly 400,000 new jobs in the chemical sector and its supplier industries. ACC has found that natural gas holds promise to revitalize manufacturing and create tens of thousands of jobs in manufacturing states such as Michigan, Ohio, and Pennsylvania that have suffered during the recent recession.

After years of high, volatile natural gas prices that helped lead to the loss of 140,000 chemical jobs in the early 2000s, the industry is expanding once again, aided by new supplies of shale gas, which helped slash U.S. natural gas prices by half from 2005 to 2009. Chemical manufacturers make a key product, ethylene, from the ethane found in shale gas, giving U.S. companies a significant edge over Western European competitors using a more expensive, oil-based feedstock.

This cost advantage is proving a boon to the U.S. economy and helps create manufacturing jobs, especially in the petrochemical industry, the report said. "Energy-intensive industries that produce chemicals, plastics and steel are beginning to bring home operations that they exported years ago," it noted.

"More plentiful gas supplies priced at around $4 per thousand cubic feet have allowed Dow Chemical Co. to announce multibillion-dollar expansions of facilities in Louisiana and Texas," the report continued. Other chemical manufacturers, including Chevron, ConocoPhillips and Royal Dutch Shell, have either announced expansion plans or new investments in plants and facilities that will be built here in the United States, the report added.

As the chemical industry kicks into a higher gear, exports are surging. Despite the dismal economy in 2010, chemical manufacturers turned a small trade deficit in 2009 into a $4.6 billion trade surplus. More than 20 percent of plastics produced in 2010 were exported, double the level before the recession, and chemical exports at the Port of New Orleans jumped 34 percent last year.

"The full potential of shale gas can only be realized with sound regulatory policies that allow for aggressive production in an environmentally responsible way, using industry best practices," Dooley emphasized.

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The American Chemistry Council (ACC) represents the leading companies engaged in the business of chemistry. ACC members apply the science of chemistry to make innovative products and services that make people's lives better, healthier and safer. ACC is committed to improved environmental, health and safety performance through Responsible Care®, common sense advocacy designed to address major public policy issues, and health and environmental research and product testing. The business of chemistry is a $720 billion enterprise and a key element of the nation's economy. It is one of the nation's largest exporters, accounting for ten cents out of every dollar in U.S. exports. Chemistry companies are among the largest investors in research and development. Safety and security have always been primary concerns of ACC members, and they have intensified their efforts, working closely with government agencies to improve security and to defend against any threat to the nation's critical infrastructure.

SOURCE American Chemistry Council