Chemical Investment Linked to Shale Gas Reaches $100B
WASHINGTON -- Potential U.S. chemical industry investment linked to natural gas and natural gas liquids from shale formations has topped $100 billion. As of this month, 148 projects valued at $100.2 billion have been announced.
The findings are in a report issued by the American Chemistry Council, a trade association based here.
The projects -- new factories, expansions and process changes to increase capacity -- could lead to $81 billion per year in new chemical industry output and 637,000 permanent new jobs by 2023, the council says. Firms based outside the United States made more than half of the investment.
"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, council president, in a prepared statement. "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."
Chemical makers are transforming domestic energy into a stronger economy and new jobs, the report found. Between 2010 and 2023, $100.2 billion in increased capital spending is projected to create 55,000 permanent new chemical industry jobs, 314,000 jobs in supplier industries and 267,000 payroll-induced jobs in communities where workers spend their wages, the analysis showed. An additional 222,000 temporary jobs will be created during the capital investment phase, which peaks in 2016.
"Given the enormous benefits of shale-related manufacturing, we are encouraged by President Obama's pledge to help make sure these projects happen," Dooley continued, noting the president's highlighting of shale gas and the need for prompt approval of manufacturing projects during his State of the Union address. "We're glad the White House agrees that regulatory permitting issues must not be a roadblock to new U.S. investment."
Companies investing in large-scale manufacturing projects such as new factories and expansions 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.
The announcement provides an update to the council's earlier report, "Shale Gas, Competitiveness, and New U.S. Chemical Industry Investment – An Analysis of Announced Projects," released last May. The report analyzed nearly 100 chemical and plastics projects totaling $71.7 billion in potential investment that had been announced through March 2013. Cumulative potential investment is growing as new projects are announced.
Published by The Business Journal, Youngstown, Ohio.
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