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Chemical Industry Expansion Plans To Create New, High-Paying American Jobs

Stocks in this article: XOM

The United States can help meet rising global chemical demand and, in the process, create new, high-paying American jobs, Steve Pryor, president of ExxonMobil Chemical Company, said in a keynote speech today at the IHS World Petrochemical Conference.

ExxonMobil forecasts that global demand for ethylene, the largest petrochemical building block, will grow by 150 percent from 2010 to 2040, driven by rising prosperity and an expanding middle class in the developing world.

With an abundance of chemical feedstock coming from natural gas produced from shale, North America could double its exports of polyethylene, polypropylene and paraxylene by 2025. “The United States can help meet global chemical demand thanks to shale energy, and, in doing so, strengthen the economic prospects of our own middle class,” Pryor said.

“Ten years ago, the volume of chemicals traded between regions equaled about 5 percent of global production capacity. Today, it has grown to about 10 percent, and by 2020 will be approaching 20 percent. This globalization comes at an opportune time for the United States, which is emerging as a significant net exporter of chemicals,” Pryor said.

Potential U.S. chemical industry investment linked to plentiful and affordable natural gas and natural gas liquids from shale formations has topped $100 billion. This includes ExxonMobil's planned multi-billion-dollar expansion of its Baytown manufacturing complex. “ExxonMobil was an early mover in response to the shale opportunity, and our start-up at Baytown is planned for 2017,” said Pryor.

“While recognizing that not all announced capacity gets built, what we are seeing is a recapitalization of the U.S. chemical industry.”

Pryor issued a warning about the challenge of a growing shortage of skilled labor. “One manifestation of this shortage is a record escalation in U.S. construction costs. For example, the cost to build a chemical plant in the U.S. Gulf Coast has nearly doubled over the past 10 years,” said Pryor.

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