The United States is on the verge of an economic “renaissance” thanks to abundant shale gas — and that demands a smart energy policy, Dow Chemical CEO Andrew Liveris said Thursday.
“The discovery of shale gas is an American manufacturing renaissance if handled well,” he said on CNBC’s “The Kudlow Report.” “It makes America a low-cost jurisdiction for any energy-intensive manufacturing of the value-add kind. One dollar of gas can create $8 to $9 of the value-add kind.”
Earlier, Dow announced it was building a $1.7 billion ethylene production plant in Freeport, Texas, scheduled to open in 2017.
The facility is part of Dow Chemical’s $4 billion plan to expand production of ethylene and propylene, products of shale gas extracted via fracking methods.
The company estimated the Texas project would employ up to 4,800 construction workers. Liveris also said that the plant would create 3,000 to 4,000 new jobs, as well as 35,000 indirect jobs.
“We’re still short of being the America we can be,” he said. “But we’re on our way, thankfully, due to the American oil and gas industry giving us cheap and abundant energy.”
Natural gas is so abundant, in fact, that the United States now has a 100-year supply, Liveris noted.
Commodity prices have seen a steady decline over the past year, falling from the $5 MBTU levels to below $2.
Natural gas prices dipped 2.5 percent for the day, trading at $1.90 per million BTUs for May delivery — a level Liveris called “artificially low” and suggested they would trend back to the $4 to $5 range.
“The United States could become an investment economy quickly here if we handle our policy environment — especially around natural gas — smartly,” Liveris said.
Energy, regulatory, tax and education policies, he argued, would help the industry and manufacturing on a broader scale.
Liveris praised the Obama administration for its regulatory climate but said more could be done.
“The administration’s made good progress on that. These are all forward looking,” he said. “We need to go back on some of the regulations that are outdated and do reform around those regulations, especially in the EPA, FDA context.”
But one policy area was most important to him.
“Energy policy, and what we do with our natural gas, in my mind, trumps those four in the here and now,” he said. “It could bring about an American job renaissance in next several years. It’s short-term, and we can do it.”
"The Kudlow Report" airs weeknights at 7 p.m. ET.
Questions? Comments, send your emails to: firstname.lastname@example.org