Dean Cordle, President and CEO of AC&S Incorporated, testified on behalf of the American Chemistry Council (ACC) this morning at a joint hearing of the House Subcommittee on Energy and Power and the House Subcommittee on Commerce, Manufacturing, and Trade. The hearing was entitled, “U.S. Energy Abundance: Manufacturing Competitiveness and America’s Energy Advantage.” ACC released the following statement:
Today’s hearing provided further evidence that abundant and affordable natural gas is revitalizing America’s chemical industry. The shale gas boom is directly benefiting companies like AC&S Inc., which relies on natural gas for fuel and manufactures oil field chemicals used for upstream production in the Appalachian Basin. And it has transformed the U.S. chemical industry from the world’s high-cost producer five years ago to among its lowest-cost producers today.
“The U.S. is emerging as the place to manufacture chemicals now, as European and Asian companies, as well as U.S. firms, make plans to source production here,” Mr. Cordle says. “In a few short years, the U.S. chemical industry has moved from an industry in contraction to an industry facing an era of unprecedented expansion.” Dozens of chemical companies have announced plans to invest in U.S.-based capacity. An ACC report identified nearly 100 such projects, valued at $72 billion. Half of the investments are from firms based outside the U.S.
The U.S. now enjoys a decisive competitive advantage in basic petrochemicals production, primarily because 75 percent of production costs are tied to energy-derived materials. For example, it costs less than $400 a ton to produce ethylene, a building block chemical derived from natural gas liquids. That compares to more than $1,000 per ton in Europe and even more in Japan.
Government policies will play an important role in ensuring the U.S. optimizes our competitive advantage. Key policies include implementing a true all-of-the-above energy policy that enables all energy sources, including energy efficiency, to fairly compete in the market; keeping oversight of unconventional oil and gas production in the hands of the states; and expediting permitting and construction of infrastructure needed to move natural gas and natural gas liquids to market.
