Shale Gas Drives U.S. Chemical Manufacturing Resurgence

Abundant, local natural gas is fueling a U.S. chemical manufacturing resurgence, according to an updated American Chemistry Council (ACC) report, first released in 2013.

U.S. chemical and plastics investment linked to shale development has exceeded $200 billion – this total figure includes investment in the creation, expansion, or the reopening of chemical and plastics facilities. To remain competitive in a global market, the American chemical industry needs affordable and accessible natural gas liquids – key inputs and feedstocks in the manufacturing process.

 “Plentiful and affordable natural gas supplies have transformed [the industry] from the world’s high-cost producer five years ago to among the lowest-cost producers today,” the ACC observes.

As production continues to increase and energy infrastructure comes online, our region can expect continued growth in petrochemical manufacturing – and the good-paying jobs that come with it.

“This is an exciting milestone for American chemistry and further evidence that shale gas is a powerful engine of manufacturing growth,” said ACC President and CEO Cal Dooley. “The U.S. remains the most attractive place in the world to invest in chemical manufacturing. We look forward to continuing to transform energy into a stronger economy and new jobs.”

Key takeaways from the report:

  • Since 2010, 333 chemical industry projects have reached a total valuation of $202.4 billion since 2010
  • 53% of these projects have been completed or are under construction, while 43% are still in the planning phase
  • This $202.4 billion could lead to $292 billion in chemical and plastics output, supporting 786,000 jobs nationwide by 2025
  • Companies around the world are investing in the U.S – 68% of the $200B is foreign direct investment or includes a foreign partner

While Pennsylvania has the abundant energy resources, competitive policies are needed to fully unlock the potential manufacturing opportunity. Among some state and federal policies, ACC recommends:

  • Access – “Allow access to natural gas reserves on government and private lands.”
  • State Regulations – “Continue responsible state-based regulations that avoid undue restrictions on production.”
  • Infrastructure – “Expedite the building of reliable infrastructure to transport supplies.”
  • Permitting – “Ensure a timely, transparent, and efficient regulatory permitting process for manufacturing projects and investments.”
  • Trade – “Expand all access to foreign markets for U.S goods.”

FLASHBACK: To read the 2013 MSC blog about the initial ACC manufacturing report outlining the manufacturing growth opportunity linked to shale, click HERE.