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Job Growth Expected From Cheap Natural Gas

Natural Gas
Natural Gas

The nation's fast-growing supply of cheap natural gas is setting off a manufacturing revival that's expected to create hundreds of thousands of jobs as companies build or expand plants to take advantage of the low prices.

Royal Dutch Shellannounced this month that it chose a site near Pittsburgh for a facility to convert ethane from locally produced natural gas into ethylene and polyethylene. They're used to make plastics that go into packaging, pipes and other products. The planned ethane cracker would employ a few hundred workers.

It's among nearly 30 chemical plants proposed in the U.S. in the next five years, according to the American Chemistry Council. The projects would expand U.S. petrochemical capacity by 27 percent and employ 200,000 workers at the factories and related suppliers, says Council President Cal Dooley, a major turnaround.

As U.S. natural gas prices soared in the late 1990s, chemical makers moved overseas, laying off 140,000 employees, Dooley says. But the U.S. has seen a natural gas boomin recent years, with producers using new drilling techniquesto extract fuel from shale formations in Texas, Pennsylvania and other regions. U.S. natural gas prices, at slightly more than $2 per million British thermal units, are about 75 percent below Western Europe rates.

PricewaterhouseCoopers' partner Robert Mc-Cutcheon estimates inexpensive natural gas could help U.S. manufacturers save $11.6 billion a year and create more than 500,000 jobs by 2025. Among industries affected:

Chemical.Dow Chemical plans to spend $4 billion to build two chemical plants near the Gulf Coast and restart another in the next five years as it adds 500 employees. "The affordability of U.S. natural gasallowed us to choose to build these assets near home," says Brian Ames, a Dow global vice president.

Canada-based Methanex plans to move a methanol operation from Chile to Geismar, La., by 2014 as it hires 130 workers. Methanol is in windshield-washer fluid, paint and plastic bottles.

Steel.Nucor is building a $750 million plant that will use natural gas — instead of more traditional coking coal — and iron ore to make iron in St. James Parish, La.

Agriculture. Potash is restarting a nitrogen fertilizer plant in Geismar that will employ 46, and Rentech Nitrogen plans to expand a similar facility in East Dubuque, Ill.

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