Exports, Innovation, Shale Gas Boost Business of Chemistry

“The business of chemistry is at the heart of U.S. manufacturing, and access to shale gas has the potential to dramatically boost America’s competitiveness,” says Cal Dooley, president and CEO of the Washington, D.C.-based American Chemistry Council (ACC, www.americanchemistry.com).

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“Right now, the business of chemistry accounts for 12 percent of all U.S. exports.” That makes chemicals the largest exporting sector in the U.S., he adds.

Globally, though, Western Europe remains the largest exporting block, according to ACC’s “2012 Guide to the Business of Chemistry,” released this past summer. Notably, from 2001-2011, “world trade in chemicals grew faster than global output,” ACC says. And in the past few years, excepting 2010, U.S. imports have grown faster than U.S. exports, especially from Western Europe, ACC adds.

One positive aspect of chemicals is innovation, which ACC calls a key driver of competitiveness and economic growth. 2011 saw upticks in chemicals’ spending for both basic research and development, both up 2 percent. However, funding committed to applied research slipped about 5 percent from 2010 levels.

What hasn’t slipped, however, is the impact of shale natural gas on chemicals. “As natural gas prices quadrupled in December 2000 and January 2001, about 50 percent of U.S. methanol capacity, 40 percent of ammonia capacity and 15 percent of ethylene capacity, which depend on natural gas or natural gas derivatives as feedstocks, were idled or permanently shut down,” ACC reports. But with the advent of abundant supplies of shale gas, the situation has reversed, ACC notes.

For what it’s worth, the U.S. Department of Energy’s Energy Information Administration (www.eia.doe.gov) reports that, for the week ending Sept. 12, 2012, natural gas spot prices, measured at Henry Hub in Louisiana, were approximately $2.50-$3.00 per million British Thermal Units

C. Kenna Amos, ckamosjr@earthlink.net, is anAutomation World Contributing Editor.

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