Favorable oil-to-gas price ratios driven by the production of natural gas from shale will fuel a renewed US competitiveness that will boost exports, and fuel greater domestic investment, economic growth and job creation within the business of chemistry, according to research by the American Chemistry Council.
Though rising uncertainty over the fiscal cliff, debt ceiling negotiations and tax reform have hindered business confidence, what the ACC calls the “most important domestic energy development in the last fifty years” is poised to reshape American manufacturing, according to the ACC’s Year End 2012 Situation and Outlook. Access to vast, new supplies of natural gas from shale deposits creates a competitive advantage for US petrochemical manufacturers. Ethane, a natural gas liquid derived from shale gas, is used as a feedstock by American chemical companies, giving them an advantage over foreign competitors that rely on a more expensive oil-based feedstock, the report says.
Aided by a favorable oil-to-gas ratio, chemical exports grew 1.8 percent to $191 billion dollars in 2012, helping to turn a trade deficit into a modest surplus, the report shows. Exports should continue to grow 4.7 percent in 2013 and another 6.2 percent to $209 billion in 2014, according to the report.
ACC says the business of American chemistry has remained a bright spot despite slow growth overall in the US, and despite worldwide economic uncertainty driven by the euro zone crisis and a pronounced slowdown in China.
To see the EIA’s statistics on the average price for natural gas from 2006 to 2012 and forecasts for 2012-2013, click here.