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TheStreet Open House

Petrochemical Manufacturing And LNG Exports Key To U.S. Economic Growth

Stocks in this article: XOM

Investments in petrochemical manufacturing and liquefied natural gas facilities must move ahead to make the most of U.S. shale resources, Steve Pryor, president of ExxonMobil Chemical Company, told attendees of the Shale Insight 2013 Conference today.

In his remarks, Pryor noted that permit approval times are the leading indicators of how quickly the United States is capturing the benefits of shale energy.

“Delays could add billions to project costs, restrain job creation, and erode America's competitive advantage,” said Pryor. “As a nation eager for economic growth, the United States should be monitoring these approval times the same way it monitors other key economic indicators.”

Pryor explained that global demand for ethylene, a key petrochemical, is growing more than 50 percent faster than natural gas. The market for LNG is growing even faster. “Since most of this demand growth is outside the United States, this presents an outstanding opportunity to boost America's exports,” he stated.

ExxonMobil plans a multi-billion-dollar chemical expansion at its Baytown, Texas facility, already the nation’s largest integrated refining and chemical complex. The company is also part of a joint venture planning to build an LNG export facility in Texas. ExxonMobil estimates that its investments in these facilities will create 55,000 new direct and indirect jobs nationwide during construction and more than 12,000 permanent jobs once they become operational.

Capital spending by U.S. chemical manufacturers has risen more than 40 percent over the last five years, and more is planned. The American Chemistry Council estimates that some 125 U.S. chemical capacity expansion projects that have been announced will contribute as much as $84 billion to the economy.

Chemical manufacturing and other industrial sectors account for nearly 30 percent of U.S. natural gas demand, Pryor said. “Shale development has given the U.S. petrochemical industry a double benefit. In addition to using natural gas as an energy source, the industry uses ethane and other liquids from natural gas as a key raw material to make plastics and other essential products. This cost advantage has reversed the fortunes of the U.S. chemical industry,” said Pryor.

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