Shale Gas and New Petrochemical Investment




Chemistry transforms raw materials into the products and processes that make modern life possible. America’s chemical industry relies on energy derived from natural gas not only to heat and power our facilities, but also as a raw material, or “feedstock,” to develop the thousands of products that make American lives better, healthier and safer.

Access to vast, new supplies of natural gas from previously untapped shale deposits is one of the most exciting domestic energy developments of the past 50 years. After years of high, volatile natural gas prices, the new economics of shale gas are a “game changer,” creating a competitive advantage for U.S. petrochemical manufacturers, leading to greater U.S. investment and industry growth.

America’s chemical companies use ethane, a natural gas liquid derived from shale gas, as a feedstock in numerous applications. Its relatively low price gives U.S. manufacturers an advantage over many competitors around the world that rely on naphtha, a more expensive, oil-based feedstock. Growth in domestic shale gas production is helping to reduce U.S. natural gas prices and create a more stable supply of natural gas and ethane.

In its new report, Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs and US Manufacturing, the American Chemistry Council (ACC) uncovered a tremendous opportunity for shale gas to strengthen U.S. manufacturing, boost economic output and create jobs.

ACC analyzed the impact of a hypothetical, but realistic 25 percent increase in ethane supply on growth in the petrochemical sector. It found that the increase would generate:

  • 17,000 new, knowledge-intensive, high-paying jobs in the U.S. chemical industry

  • 395,000 additional jobs outside the chemical industry (165,000 jobs in other industries that are related to the increase in U.S. chemical production and 230,000 jobs from new capital investment by the chemical industry)

  • $4.4 billion more in federal, state and local tax revenue, annually ($43.9 billion over 10 years)

  • A $32.8 billion increase in U.S. chemical production

  • $16.2 billion in capital investment by the chemical industry to build new petrochemical and derivatives capacity

  • $132.4 billion in U.S. economic output ($83.4 billion related to increased chemical production (including additional supplier and induced impacts) plus $49.0 billion related to capital investment by the U.S. chemical industry)

Download the full report to learn even more about the vast potential for the revitalization of the chemical industry through the production of natural gas.