Abundant supplies of natural gas from shale have created significant economic opportunities for the U.S. chemical industry that could result in US$71.7 billion in new investments and more than 530,000 permanent new jobs, according to a new report from the American Chemistry Council (ACC),
The report is based on a detailed examination of the 97 chemical industry projects that have been announced as of March, 2013, ACC said. It explains that the US$71.7 billion in capacity expansion will engender an additional US$66.8 billion in chemical industry output, a 9% gain above what otherwise would have been the output in 2020.
The report predicts that nearly US$30 billion of the expenditures will go towards purchasing processing-related equipment. Twenty six percent will be allocated to major process equipment and products such 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.
The report further predicts that US$12 billion will be spent in 2014 and another US$15 billion will be invested in 2015. By 2020, the report concluded, these projects can lead to 46,000 new chemical industry jobs, another 264,000 jobs in supplier industries and 226,000 “payroll induced” jobs in communities where workers spend their wages, and can generate US$20 billion in federal, state and local tax revenue. Nearly 1.2 million additional, temporary jobs can be created between 2010 and 2020, during the capital investment phase.
“The U.S. 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. “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.”
To download a copy of the report, go to chemistrytoenergy.com/shale-study.