Numerous industries feel benefits of Ohio’s resources

As the foundation of America’s manufacturing sector, the business of chemistry has deep roots in the state of Ohio, the site of today’s “Energy Jobs Summit” in Columbus.   Chemical manufacturers and plastics producers both large and small call Ohio home because of the state’s well-educated workforce, central location, commitment to innovation and long tradition of hard work.  But even as we speak, Ohio is becoming an even more attractive place to do business because of the state’s potential to become a major energy producer. 

Ohio has been blessed with vast amounts of energy resources that are just now starting to be fully understood.  The potential of the Marcellus and Utica shale in Ohio to help transform the energy outlook and economic circumstances in the state and to contribute to a manufacturing renaissance that is emerging across the nation should not be underestimated.   

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While many people understand that energy production creates energy jobs, they may not understand that the benefits of energy from shale reach far beyond the wellhead.   Numerous industries - from chemicals to steel, from plastics to paper and pulp – are feeling the positive effect of affordable, abundant supplies of domestic natural gas from shale.  At today’s summit we’ll hear firsthand from companies that have seen their business environment transformed, their long term outlook for growth improve and their ability to hire new workers increase.  

As President of the American Chemistry Council, I represent chemical manufacturers and the nearly 800,000 industry employees around the country, 40,000 of which are in Ohio.  You may be wondering why shale gas is so important to chemical producers.      

Most people don’t realize that natural gas is the primary raw material used by American chemical companies to make the building blocks for countless consumer products that Americans rely on every day.   To put it simply, natural gas is to chemistry, as flour is to a bakery.  Specifically, chemical manufacturers use ethane, a natural gas liquid produced in large amounts from shale gas, to create the chemical products that make modern life possible including advanced fuels, medicines, and energy efficient building and construction products, just to name a few. 

Because domestic natural gas is so affordable today, American chemical manufacturers have a competitive advantage over foreign producers for the first time in at least a decade.  Many overseas chemical manufacturers rely on naptha, an oil-based feedstock, rather than ethane from natural gas as we primarily use here in the U.S.  With natural gas prices hovering around $2.00 a tcf and oil prices remaining above $100 a barrel, it’s not hard to tell who’s in a stronger position these days.   

Numerous chemical companies have announced that they are planning or considering expansions or new plants.  This means new jobs, economic growth and increased tax revenue for the states that are home to these investments.  ACC recently projected that the establishment of a new chemical plant to take advantage of shale gas here in Ohio could create 17,000 new permanent jobs and more than $1 billion in wages for Ohio workers.   Such a facility often brings with it the co-location of other manufacturing capacity to take advantage of the close proximity of a major supplier, meaning that major new industrial complexes could follow suit.    

So thanks to energy from shale, the future for Ohio is bright.  

In order to make the most of these valuable resources and realize Ohio’s full energy and economic potential, two things must happen. State lawmakers and regulators must craft wise policies and balanced regulations to encourage robust and responsible development that minimizes the impact on the environment; and the President and Congress must finally develop a national energy policy that prioritizes production from all energy sources, including oil, natural gas, renewable and energy efficiency.  Without this kind of truly comprehensive strategy, we run the risk that this natural gas boom doesn’t later become a bust as we’ve seen so many times before with various energy sources.  The American Chemistry Council and our members in Ohio and across the nation will be hard at work  fighting for both.  

The Honorable Cal Dooley is the president and CEO of the American Chemistry Council.