Robust and affordable supplies of natural gas from shale are a key requirement for the successful implementation of nearly 100 US chemical industry projects, which in turn would create 46,000 jobs in that sector, according to a report by the American Chemistry Council.
ACC’s report, titled Shale Gas, Competitiveness, and New U.S. Chemical Industry Investment—An Analysis of Announced Projects, examined 97 announced chemical and plastics projects totaling $71.7 billion in potential new US investment. By 2020, the projects can lead to the creation of 46,000 chemical industry jobs, another 264,000 jobs in supplier industries and 226,000 “payroll induced” jobs in communities where workers spend their wages, generating $20 billion in federal, state and local tax revenue. Nearly 1.2 million additional, temporary jobs will be created during the capital investment phase that occurs between 2010 and 2020, the report says.
However, these jobs are reliant on government policies surrounding shale gas extraction.
ACC says needed policies include access to natural gas reserves on government and private lands, reliable infrastructure to transport supplies, timely permitting of new construction or expansion projects, and implementation of responsible, state-based regulations for natural gas production.
The ACC report echos findings from analysis by RBC Capital Markets and Economist Intelligence Unit. The shale gas boom and associated record-low natural gas prices are affecting different industries differently, but will be especially beneficial to those including petrochemicals and fertilizers, where feedstock or energy inputs can account for up to 90 percent of total production costs, according to the analysis.
However, the Post Carbon Institute published research in February finding that the net energy, or “energy returned on energy invested,” of unconventional sources such as shale gas is generally much lower than for conventional resources. The average net energy or rate of return for conventional oil is about 25:1, meaning that it takes one unit of oil to extract every 25 units of oil from the earth. With minable tar sands this figure falls drastically to 5:1 and for “in situ” tar sands retrieved from deeper in the earth the ratio is 3:1, according to the report.
From a net energy point of view, moving to progressively lower-quality energy resources diverts more and more resources “to the act of acquisition as opposed to doing useful work,” the report says. This raises prices and increases negative environmental impacts.
Do you work in the chemical industry? How do you balance economic benefits of shale gas extraction with environmental costs? Please let us know in the comments section below.