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Major US chemical industry projects set to spend near $30 billion on equipment

September 01, 2013
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By Clay Stevens, president, International Exposition Co.

I was pleased to read a recent report from the American Chemistry Council (ACC) having a very optimistic economic outlook for the Chemical Processing Industries (CPI) through the year 2020 due to investments linked to low-cost shale gas. According to the report, nearly 100 new shale gas-related projects valued at $71.7 billion in capital spending have been announced by chemical companies worldwide. This will result in significant investment in capital equipment and create more than 500,000 new jobs.

Tiitled “Shale Gas, Competiveness, and New U.S. Chemical Industry Investment: An Analysis Based on Announced Projects,” the report is based on a detailed examination of the 97 chemical industry projects that have been announced as of March, 2013. It explains that the $71.7 billion in capacity expansion will engender an additional $66.8 billion in chemical industry output, a 9% gain above what otherwise would have been the output in 2020. 

The big news for processing professionals is that nearly $30 billion of the $66.8 billion in expenditures will go towards purchasing processing-related equipment. Approximately 26% of the nearly $67 billion will be allocated for such major process equipment as pumps, pressure vessels, heat exchangers, compressors, etc. Another 8% will be spent on process instrumentation, 5% on valves and piping and 4% on electrical equipment.

Peak in 2015

The report forecasts that $12 billion of the $68.8 billion will be spent in 2014 and peak at $15 billion in 2015. This means that CPI professionals attending the 2013 CHEM SHOW in New York this December will be able to see and source a vast array of the innovative equipment and technology they will need to meet this increased production demand over the next two years. More than 300 process equipment manufacturers from around the world will be showcasing solutions process professionals won’t be able to see anywhere else.

In addition, the AIChE Northeast Manufacturing Conference at the CHEM SHOW will feature leading industry experts presenting valuable insights and information specifically geared toward engineers working in the chemicals, pharmaceuticals, food and other process industries. Conference sessions will address energy-savings and efficiency, new and improved operating equipment and environmental, health and safety issues.

And the good news just keeps getting better. The report predicts the 97 projects will create 46,000 jobs in the chemical industry, another 264,000 in supplier industries like ours, and 226,000 more jobs in local communities where spending by the new chemical-related workers live. In addition, the work on these projects could lead to 1.2 million temporary jobs through 2020, including several thousand in process equipment manufacturing.

An industry magnet

"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," notes ACC president and CEO Cal Dooley. The large number of foreign chemical firms investing in the U.S. is unprecedented in recent history and underscores that nowhere else in the world is the outlook as bright when it comes to natural gas, says the report.

The report further predicts that the buildup should continue well beyond 2020. ACC estimates that an additional $24.5 - $29.5 billion in chemical industry investment could occur between 2020 and 2025. This translates into a lot of new process equipment and products that will be needed over the next several years.

This is great news for the CHEM SHOW, as our mission for nearly 100 years has been to serve as the best resource for process equipment and solutions. To learn more about attending or exhibiting at the 2013 CHEM SHOW, please visit our website www.chemshow.com.

To download a copy of the report, go to http://chemistrytoenergy.com/shale-study

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