ACC Study Finds Shale Driving U.S. Economic Growth
As EID has reported in the past, developing natural gas from shale is fueling America’s chemical industry and a rebirth of U.S. manufacturing. But as a new report from the American Chemical Council highlights, the impact is actually being felt throughout our entire economy.
The third in its series, this week’s ACC report explains how, thanks to shale, companies are relocating to the United States, bringing jobs and opportunities along with them. In the process, such relocation means more goods stamped “Made in America” and a dramatic improvement in the U.S. trade deficit.
Why, exactly? Well, as the report highlights, “no other country has as bright an outlook when it comes to natural gas.” Manufacturers use natural gas both as an energy source and a feedstock, and America’s sheer abundance means low-cost supplies and increased competitiveness.
Specifically, the study examined nearly 100 chemical investment projects that have been publicly announced through the end of March 2013. ACC examined the economic impact during the ten year initial capital investment phase of these projects, as well as the activity spurred as a result of ongoing and increased chemical output.
The results are, without question, great news for the U.S. economy: Those nearly 100 projects have a combined value of a staggering $71.7 billion.
As ACC’s work echoes, continued development of affordable, domestic natural gas is catalyzing a new era of American competitiveness and growth. From the report:
“Roughly half of the announced investments to date are from firms based outside the U.S. The fact that such large numbers of foreign-owned companies are choosing to source their chemistry in the United States is unprecedented in recent history, and a testament to the value and affordability of American’s shale gas and ethane supplies. The U.S. is poised to capture market share from the rest of the world, and no other country or continent has as bright an outlook when it comes to natural gas.”
This investment means more jobs and opportunities for Americans across the supply chain. According to the study, chemical projects by 2020 could lead to another 264,000 jobs in supplier industries and 226,000 additional jobs in communities where workers live and spend money, generating $200 billion in additional payroll. Along with jobs and payroll benefits, the projects would lead to $20 billion in new federal, state, and local tax revenue during the investment phase and $14 billion in permanent tax revenue by 2020 — revenues that fund vital public services from schools and hospitals to parks and fire departments.
In addition, the report indicates that in 2020, “output from shale-related chemical investments [will generate] $66.8 billion in additional chemical industry shipments” while fueling a wide array of homegrown manufacturing growth. According to ACC’s report:
“ACC found a tremendous opportunity for shale gas to strengthen US manufacturing, boost economic output and create jobs. One of the industries clearly benefiting is plastic and rubber products, and this industry will feature strong growth and absorb much of the incremental gains in chemical industry output arising from the shale gas induced renewed competitiveness.”
This is a tremendous opportunity, made possible by the safe and tightly-regulated use of hydraulic fracturing and horizontal drilling technologies. Yet, as the report stresses, for this development to continue and thrive, balanced policy must be in place that allows industry to gain access to our vast shale formations and natural gas reserves.
In other words, the quickest way toward hamstringing this manufacturing renaissance is through restricting access and, well … doing exactly what New York is doing.