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Job Boom From Shale Gale

Employment: Trade group says shale gas will add more than 500,000 permanent positions

by Alexander H. Tullo
May 27, 2013 | A version of this story appeared in Volume 91, Issue 21

Shale gas has given the U.S. an edge over many countries for chemical production. SOURCE: American Chemistry Council
A bar graph shows the prices of natural gas in 15 countries.
Shale gas has given the U.S. an edge over many countries for chemical production. SOURCE: American Chemistry Council

Inexpensive natural gas from shale will not only bring big profits to U.S. chemical makers but will also be a boon to local communities where future chemical plant workers will live and shop, creating more than a half-million new jobs overall. That’s the conclusion of a new study by the American Chemistry Council, a trade association of chemical companies.

The job numbers seem reasonable, says Terry L. Clower, director of the Center for Economic Development & Research at the University of North Texas, who reviewed the study for C&EN.

Natural gas companies have learned to exploit shale by using sometimes controversial techniques such as horizontal drilling and hydraulic fracturing. The new gas has rejuvenated the U.S. chemical industry with cheap feedstocks, making the U.S. one of the world’s most economically advantageous places to build petrochemical and polymer chemical plants.

To quantify the impact of new investment on the broader economy, ACC economists compiled a list of 97 chemical projects that are taking advantage of shale gas. The new plants are expected to add $66.8 billion in annual production of chemicals such as ethylene and polyvinyl chloride by 2020, a 9% increase over the baseline case of a world without shale.

Chemical plant construction will require an additional 1.2 million work years’ worth of temporary jobs in construction, equipment, and building supplies, according to ACC.

In the longer term, the chemical companies responsible for the plants will directly employ 46,000 more workers than baseline. The economists also used models to project that additional raw materials and services for the plants will lead to 264,000 indirect new jobs. They say the annual payroll of these employees will total $23.8 billion, a sum that should support yet another 226,000 new jobs.

North Texas’ Clower notes that big plants have economic ripple effects. “Because of all the spending that goes along with them, the indirect jobs are pretty big oftentimes,” he says. The plants “don’t create lots of jobs themselves because they are largely automated facilities.” He adds that high indirect jobs multipliers are normal for chemical plants and refineries.



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