Shale gas prompts $72B in planned chemical investments

Construction at Chevron Phillips Chemical's Cedar Bayou 1-Hexene plant in Baytown will will be completed in early 2014. The expansion there and at other Chevron Phillips plants along the Gulf coast was prompted by low natural gas prices. (Chevron Phillips)

As many as 46,000 permanent jobs in the chemical industry will be created if all of the chemical and plastics projects that have been announced to take advantage of plentiful and low-cost supplies of natural gas are built, according to a study released Monday by the American Chemistry Council.

By 2020, the report found the projects 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.

“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,” Cal Dooley, president and CEO of the council said in a statement.

The report examined 97 announced chemical and plastics projects, totaling $71.7 billion in potential investment in the United States.

The report said about 1.2 million additional temporary jobs will be created during the capital investment phase between 2010 and 2020.

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Dooley said about half of the announced investments are from firms based outside the United States.

Many of the planned expansions are in Texas, including a $4 billion expansion in Freeport by Dow Chemical. That includes restarting an ethylene cracker, building a new ethylene cracker and other projects.

But Dow isn’t the only company growing in Texas.

Exxon Mobil Chemical has announced plans for an ethylene cracker and two polyethylene plants in Baytown, while Eastman Chemical has said it will build an ethylene cracker and a propylene unit in Longview. Other companies expanding or building new chemical plants include Chevron Phillips Chemical, LyondellBasell and Mitsui & Co.

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