American Chemistry Council president and CEO Cal Dooley released a new report today on the potential benefits of shale gas to the Louisiana petrochemical industry, and the US in general.
"Access to untapped supplies of natural gas is one of the most important domestic energy developments in 50 years,” he said. “One-third of US natural gas reserves are comprised of shale gas reserves almost impossible to extract just five years ago. Shale gas promises an industrial renaissance, here in Louisiana and in America."
The report suggests that abundant and affordable supplies of shale gas could produce more than 35,000 permanent, high-paying manufacturing jobs in Louisiana, reinvigorating the state's industrial base, boosting exports and sparking economic growth.
As the second largest chemical producing state, with 23,000 chemical industry employees, Louisiana is well-positioned to take advantage of the lower feedstock costs that arise from new supplies of domestic natural gas.
Thanks in part to reasonably-priced natural gas, chemical exports at the Port of New Orleans increased 34 percent last year. Nationwide, US exports of PVC plastic have tripled since 2006. More than 20 percent of plastics output was exported last year, double the level recorded before the recession. In 2010, US chemical exports increased 15 percent, turning the balance of trade from a $140 million deficit two years ago into a $4.6 billion surplus.
Growth in chemical industry exports, investment and jobs, thanks to shale gas, is in sharp contrast to the business environment the chemical industry faced just six years ago. Between 1999 and 2005, US natural gas prices quadrupled, and US manufacturers shed more than 5.5 million jobs. More than 140,000 of those jobs were in the domestic chemical industry.
The discovery of shale gas supplies reversed this downward trend and is encouraging US petrochemical investment and growth. As new supplies of shale gas surged, natural gas prices dropped by half from 2005-2009, and manufacturers benefited enormously.
"The availability of abundant, low-cost natural gas is helping to revitalize several industries, including petrochemicals, leading to several billions of dollars of new investment in domestic industrial operations that would not have been anticipated half a decade ago," the National Petroleum Council stated in a September 15 report.
