Shale gas is making U.S. plastic manufacturing competitive globally
The shale gas revolution is bringing plastic manufacturing back to the United States and making U.S. refiners more competitive globally, reports the American Chemistry Council (ACC). Due largely to plentiful and affordable natural gas and natural gas liquids from shale formations, U.S. jobs related to plastics manufacturing are expected to grow by 462,000 over the next decade – more than 20% – reaching more than 2.7 million.
Cheap and abundant shale gas has breathed new life into the U.S. plastics manufacturing sector, based on a new study titled “The Rising Competitive Advantage of U.S. Plastics.” The study points out, since U.S. producers predominantly use natural gas-based feedstocks, and European and Asian producers generally use oil-based feedstocks, the spread between feedstock prices has made U.S. producers more competitive, even after the recent oil price decline.
Increasing competitiveness is expected to bring more jobs back to the U.S. as new investment expands the industry. ACC’s report found that new investment could create hundreds of thousands of permanent jobs up and down the supply chain over the next decade. In addition to the anticipated 462,000 manufacturing jobs, the analysis project nearly 97,000 temporary jobs will be created during the peak of the construction phase.
Attracting new investment
“A decade ago, the U.S. was among the highest-cost plastics producers,” said Steve Russell, ACC’s vice president of plastics. “Today, America is one of the most attractive places in the world to invest in plastics manufacturing. Even after recent declines in oil prices, our nation has a decisive edge.”
Based on the ACC’s analysis, the combined output from the new investments in resin, compounding and ancillary chemistries (additives, colorants, ect.) and products will be $46.8 billion. Many of the new investments are export-oriented. Recent work by Nexant Consulting found that between 2014 and 2030, net plastic resin exports will more than triple, rising nearly $15 billion from $6.5 billion to $21.5 billion.
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