Chemical industry reports shale driving investments - Beckley, Bluefield & Lewisburg News, Weather, Sports

Chemical industry reports shale driving investments

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A new report from the American Chemistry Council says expansion in shale gas plays are driving investments in chemical manufacturing to the tune of bout $71.7 billion in investments, including in West Virginia.

A number of major manufacturing projects are being directly tied to the development of the Marcellus Shale in West Virginia. The gas field is rich not only in methane but also in other chemicals.

Since the Marcellus Shale field was essentially "unlocked" by the combination of hydraulic fracturing and horizontal drilling techniques, officials have raced to capitalize on the downstream and midstream opportunities. Many of the chemicals that are captured during drilling are vital manufacturing feedstocks.

"The United States has become a magnet for chemical industry investment, a testament to the favorable environment created by America's shale gas as well as a vote of confidence in a bright natural gas outlook for decades to come," ACC President and CEO Cal Dooley said in a news release accompanying the report. "What's especially exciting is that half of the announced investments are from firms based outside the U.S., which means our country is poised to capture market share from the rest of the world."

In West Virginia, shale gas-related projects include ethylene crackers by Aither Chemicals and Bayer Material Science. Appalachian Resins and ICL Industrial Products are also linked to shale gas development.

"A new competitive advantage has emerged for chemical manufacturing in the United States as vast new supplies of natural gas from largely untapped shale gas resources, including the Marcellus along the Appalachian mountain chain, are leading to massive capital investment and expansion of the US chemical industry," the report states. "With the development of new shale gas resources, US industry is announcing expansions of capacity, reversing a decade-long decline and providing opportunities for new jobs at a time when the United States is facing persistent high unemployment."

According to the report, 97 chemical and plastic projects related to the shale industry totaled about $71 billion in new investments. The study also predicts creation of 46,000 chemical industry jobs and 264,000 supply industry jobs.

The report urges lawmakers to adopt or continue to maintain industry-friendly policy.

"Right now, the chemistry industry has the confidence needed to drive new U.S. investment," the report concluded. "Policymakers can help ensure that confidence continues for decades to come."

The report calls for increased access to oil and gas on public and private lands, continuation of primarily state-based regulation, improving siting and permitting aspects of manufacturing development, preserving coal's role as an energy source and expanding access to foreign markets.

One of the issues the report addresses is the possibility that increased electricity demand, and the use of natural gas for electricity, could cause the price of gas to rise. The ACC report suggests this could hurt the chemical manufacturing edge the U.S. has gained.

"With a growing and increasingly affluent population and economic growth, demand for electricity will rise in the US," the report states. "In addition, clean air regulations are promoting natural gas use in electricity generation.  This will increase natural gas demand and economic theory suggests that barring any increase in supply, market prices will rise."