Report: Natural Gas Pivotal To the Energy Transition and a Lower Carbon Future

Natural gas is a critical component for maintaining American industrial competitiveness during the energy transition, according to an American Chemistry Council white paper published last month.

Natural Gas Supports Industry Growth and Competitiveness

Natural gas continues to be an economic lifeblood for variety of major industries due to its versatility, abundance and low cost. The resource provides a vital, reliable feedstock for U.S. industrial activity. As the ACC report explained:

“For many companies, access to affordable, industrial-scale supplies of natural gas is critical to the competitiveness of U.S. operations.”

Ohio is a notable example of how natural gas has been critical to the economic investments of the state. Last year, JobsOhio and Cleveland State University indicated that since the Shale Revolution began in the Buckeye State in 2011, the natural gas and oil industry has invested nearly $100 billion into the state, while also leading the nation in growth for the fourth consecutive year.

Beyond Ohio, natural gas has proven to be fundamental to American chemistry and the U.S. manufacturing supply chain. U.S. chemical manufacturers use natural gas to fuel and power facilities, while also using natural gas liquids (NGLs) as a primary feedstock.

As ACC President and CEO Chris Jahn explained in the report:

“U.S. chemical makers are transforming natural gas into a stronger economy and new jobs. Thanks to this versatile resource, American chemistry has experienced more than a decade of growth. Our new investment boosts output, employment, and payrolls nationally and in local communities.”

One key advantage for the U.S. chemical industry is that the nation’s natural gas attracts new investment from around the world. Per the report, natural gas directly and indirectly fuels the chemistry industry, including:

  • 537,000: Number of skilled American jobs in the chemistry industry
  • $11 billion: R&D investment by business of chemistry in 2021
  • $517 billion: Making chemistry one of America’s largest manufacturing industries

Similarly, Jahn explains how U.S. natural gas’ impacts go far beyond the chemistry and manufacturing industries:

Natural gas is used by every major sector of the U.S. economy – electric power, residential, transportation, industrial, and commercial. Natural gas accounted for 32 percent of total U.S. energy consumption in 2021, and will remain a key energy source going forward. Nearly every sector will increase natural gas use between now and midcentury, according to the U.S. Energy Information Administration. By 2050, natural gas will be the largest global energy source.” (emphasis added)

Natural Gas Creates Space for More Innovation

Natural gas has been proven to be a critical source in advancing the energy transition and achieving a lower emissions future. Likewise, according to the U.S. Energy Information Administration, over the last 15 years as the electric power and industrial sectors shifted to greater natural gas use, greenhouse gas (GHG) emissions dropped by 32 percent from 2005 to 2019.

In the report, ACC highlights several technologies that natural gas will be a vital source to enabling energy and climate solutions:

  • Lower-Emissions Electricity
  • Clean Hydrogen
  • Carbon Capture, Utilization, and Storage (CCUS)
  • Combined Heat and Power (CHP)

While chemistry and plastics are integral to creating solar panels, wind turbines, advanced battery storage, and more technologies; ultimately, these technologies at its foundation are directly fueled by natural gas as either an energy source or feedstock.

By using natural gas to drive innovation, the U.S. energy industry has positioned itself in the mix of supplying on-demand energy and emission reduction on the global stage.

ACC’s Jahn recognizes the role of natural gas in the chemical and manufacturing industry, including the role the industry will need to play to achieving a low-carbon future.

“While the chemical industry is energy intensive, ACC members are taking action to reduce the industrial GHG intensity of their operations, supply chains, and products and are deploying commercially available solutions to reduce emissions.”

The report makes a case for natural gas as a key driver of both economic growth and climate progress.  It also sends a clear message on the need of comprehensive U.S. policies to advance energy security, reliability, and resilience; energy and manufacturing innovation; infrastructure development; and free and open trade forward. As Jahn said:

Our nation needs policies that encourage secure and reliable energy and electricity, infrastructure development, timely and efficient permitting, and a diverse portfolio of energy sources and technologies.” (emphasis added)

Bottom Line: ACC’s spotlight on natural gas demonstrated it is critical to the U.S. economy as a versatile resource from supporting the U.S. chemical manufacturing industry and driving growth to ushering in a lower emissions future. More importantly, natural gas will continue to play a key role in the creation of climate solutions.

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