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Abundant shale gas has transformed America’s chemical industry from the world’s high-cost producer five years ago to among the world’s lowest-cost producers today. Thus, the United States enjoys a decisive advantage in the cost of producing basic petrochemicals.
The U.S. chemical industry has the confidence needed to drive new U.S. investment, and the country’s policymakers can help ensure that confidence continues for decades to come, a recent report from the American Chemistry Council (ACC) asserts.
The ACC says dozens of companies plan to expand U.S.-based production capacity, much of it geared to export markets for chemistry and plastics products.
In general, word is getting out on how North American shale gas is impacting downstream industries and the more general economy. More than $217 billion will be invested over the next six years in downstream petrochemical production in the United States as a result of the shale gas boom, according to a recent analysis from IHS.
In a recent report the ACC looks at potential economic benefits of U.S. chemical industry investments linked to robust and affordable supplies of natural gas from shale and at nearly 100 chemical industry investment projects publicly announced through first-quarter 2013.
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“The United States has become a magnet for chemical industry investment, a testament to the favorable environment created by America’s shale gas as well as a vote of confidence in a bright natural gas outlook for decades to come,” said ACC President and CEO Cal Dooley. “What’s especially exciting is that half of the announced investments are from firms based outside the United States, which means our country is poised to capture market share from the rest of the world.”
The 97 announced chemical and plastics projects examined totaled $71.7 billion in potential new U.S. investment. By 2020, the projects can lead to the creation of 46,000 chemical industry jobs, another 264,000 jobs in supplier industries and 226,000 ‘payroll induced’ jobs in communities where workers spend their wages, generating $20 billion in federal, state and local tax revenue, the ACC asserts. Nearly 1.2 million additional, temporary jobs will be created during the capital investment phase that occurs between 2010 and 2020.
The ACC believes government policies will influence realization of the shale gas opportunity and include access to natural gas reserves on government and private lands; reliable infrastructure to transport supplies; timely permitting of new construction or expansion projects; and implementation of responsible, state-based regulations for natural gas production.
The study employed the IMPLAN input-output methodology, an economic model that quantifies interdependencies among industries or economic sectors.