American Chemistry Council: New Gas Supplies Could Create Thousands of Manufacturing Jobs

Abundant and affordable supplies of natural gas from shale could produce more than 19,000 permanent, high-paying chemical manufacturing jobs in Michigan, revitalizing the state’s industrial base, driving economic growth and boosting exports while  generating tens of million of dollars in much-needed state revenue, according to a report issued by the American Chemistry Council. 

“Natural gas is a game changer for chemical manufacturers — and Michigan. Reliable and inexpensive sources of domestic natural gas will safeguard Michigan’s energy future and jump start its economy,” ACC President and CEO Cal Dooley said.

“Access to untapped sources of domestically-produced natural gas is one of the most important domestic energy developments in 50 years and provides unparalleled opportunities for the chemical industry and other manufacturers in Michigan. One-third of U.S natural gas reserves are comprised of shale gas reserves that were almost impossible to extract just five years ago,” Dooley stated.

Job growth and Michigan’s budget deficit were addressed by Gov. Rick Snyder during his State of the State speech last week. Natural gas helps provide one solution. “Stable supplies of reasonably priced natural gas can breathe new life into Michigan industry and produce the investment needed for new jobs, higher wages and major increases in state revenue,” said Cynthia G. Schulz, the CEO of the Michigan Chemistry Council. “Natural gas is a win-win-win result for Michigan.”

The surge in natural gas production from shale gas could drive down costs as lower natural gas prices translate into lower electricity bills for Michigan manufacturers and businesses. In addition, Michigan’s chemical industry relies on natural gas not just for heat and electricity, but also as the primary feedstock, or raw material, used to create ethane. Ethane is a critical ingredient needed to make thousands of products, from paint and pipes to solar cells, wind turbines and plastic used to produce energy-efficient vehicles.

Michigan’s chemical industry is especially well-positioned to benefit from “the shale gale,” given its ready access to a pipeline delivering natural gas from the Marcellus Shale to Sarnia, Ontario, its access to the Great Lakes and its proximity to the U.S. industrial heartland, the ACC report said.

The chemical industry in Michigan, the nation’s fourteenth-largest chemical-producing state, directly employs approximately 26,000 people, with an average annual salary of more than $77,000 a year.

Plentiful supplies of shale gas could result in a $3.2 billion investment in a major chemical facility in the state, creating a ripple effect in Michigan’s economy, starting with the downstream chemical industry and its suppliers and spreading to other manufacturers, including the automobile industry.

In addition to producing 19,000 jobs, this initial investment would put $1.2 billion in the pockets of Michigan workers, generate $8.2 billion in chemical industry output and produce $162 million in state tax revenue, the ACC study found. Click here to access more Michigan state-specific data.

U.S. economic growth is connected to the surge in shale gas production. The price of natural gas plunged 50 percent from 2005-2009, giving chemical industry and other manufacturers a competitive edge in global markets. The ACC’s national report released last year found that a reasonable 25 percent increase in ethane production would result in 400,000 new jobs for the business of chemistry and supplier industries while adding more than $132 billion to U.S. economic output and generating nearly $4.4 billion in federal, state and local tax revenue annually.

A White House jobs report issued in early January credited the boom in low-cost natural gas from shale for helping to revive the nation’s manufacturing sector and fueling America’s economic rebound. ACC cheered the White House report’s conclusions.

“We are heartened by the growing consensus that bountiful supplies of domestically-produced natural gas are inextricably linked to economic prosperity, U.S. competitiveness and job creation,” Dooley said.

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LNG World News Staff, January 25, 2012