Ethane supplies from shale formations in North America could boost investment and chemical manufacturing in the U.S., according to an analysis by the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com).
In a report released released this week, ACC explains how supplies of shale gas that have emerged in the U.S. in recent years are “changing the landscape” for U.S. petrochemical producers. Summarizing the ethane supply report in its latest Weekly Chemistry and Economic Trends release, ACC said “Low-cost ethane from shale formations is creating a competitive advantage for U.S. petrochemical makers, offering tremendous opportunities to rejuvenate the U.S. chemical industry, strengthen U.S. manufacturing, boost economic output and exports, and create jobs.”
The shifting competitive position of North American petrochemical producers was a significant point of discussion at two petrochemical professional conferences this week, ACC says, where the mood was “generally optimistic.”
Economic analysts and statisticians at ACC developed a “hypothetical, but realistic” scenario in which ethane supplies would increase by 25%. Under this scenario, ACC predicts a total of 17,000 new “knowledge-intensive” jobs would be created in the U.S. chemical industry, as well as an additional 395,000 jobs outside the chemical industry. The higher ethane supply would also mean a $32.8 billion increase in U.S. chemical production, $4.4 billion more in federal, state and local tax revenue annually, and $16.2 billion in capital investment by the chemical industry to build more petrochemical and derivatives capacity, ACC says.
Other recent economic data show a 0.9% rise in February in the U.S. Chemical Production Index, with gains in every geographic region. Data for home sales in the U.S. continue to disappoint. Other data cited in recent ACC analysis suggest retail sales were strong in February. Inflation data show the impact of higher energy and food costs, but “systemic inflation still has yet to show up in the data,” ACC states.
Overseas, ACC points out that many facilities in Northeast Japan shut down by power outages in the wake of the earthquake, tsunami and nuclear plant situation would begin coming back online during the next week.