potential benefits of expanded chemical and plastics manufacturing in appalachia

15 Pages·2017·0.75 MB·English

by  Fathom Creative

POTENTIAL BENEFITS OF
EXPANDED CHEMICAL AND
PLASTICS MANUFACTURING IN
APPALACHIA
18 October 2017
Governor’s Energy Summit
Roanoke, West Virginia
Martha Gilchrist Moore
Sr. Director – Policy Analysis and Economics
$8.7B
At , is the
largest
manufacturing
industry in the state
Provides
9,132
direct jobs
and another
11,341
West related jobs
Generates
$790M
in
Virginia
payroll across
73
establishments Has an average wage of
chemistry… $86,490,
53% higher than
the average
manufacturing wage
$81M
Generates in
state & local taxes,
$169M
and in
federal taxes
Invests $279M
to build & update
equipment and
facilities
Ships $1.5B
in products to
customers around
the world
Generates an
additional
3,346 jobs
in plastics
& rubber products
americanchemistry.com
Chemical Manufacturing is Energy-Intensive
Fuel, Power and Feedstock Costs as a Percent of Total Costs
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Chlorine/Caustic Soda
Sodium Carbonate (Soda Ash)
Acrylonitrile
Adipic Acid
Aniline
Benzene
Butadiene (1,3-)
Cumene
Ethylbenzene
Ethylene
Ethylene Dichloride (EDC)
Ethylene Glycol
Ethylene Oxide
Methanol
Phenol
Propylene
Styrene
Terephthalic Acid
Vinyl Acetate
Polyethylene (LDPE)
Polyethylene (LLDPE)
Polyethylene (HDPE)
Polypropylene (PP)
Polystyrene (PS)
Polyvinyl Chloride (PVC)
Anhydrous Ammonia
Urea
Source: ACC analysis Energy Costs Other Costs
Feedstock Spread Drives Petrochemical Competitiveness
$/gallon
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
YTD
Spread between Naphtha and Ethane Ethane Naphtha
Sources: US Energy Information Administration, ACC analysis
Global Cost Advantage for U.S. Producers
Relative Position of U.S. (2005-2016)
(Petrochemical Production Costs)
HIGH
RELATIVE
POSITION
S OTHER OF UNITED
T NORTHEAST STATES
S ASIA IN 2005
O
C
WESTERN

EUROPE
N
O
I
T
C) CHINA
. UNITED
Ub
l STATES
D$/ IN 2016
O( MIDDLE

R * EAST
d
P
e
t
5a
1m
0ti
2s LOW
E
GLOBAL SUPPLY
(billion lbs.)
*Based on estimates from
best available data
Oil-to-Gas Ratio: A Proxy for
US Petrochemical Competitiveness
Divide Brent oil price ($ per barrel) by Henry Hub natural gas
45 price ($ per million BTUs). When the ratio is above 7, US
competitiveness is favorable vis-à-vis other major producing
40 regions. Above 10 and competitiveness is further enhanced.
The current ratio is very favorable for US competitiveness and
35 exports of petrochemicals, plastics and other derivatives.
30
25
20
15
10
5
0
70 75 80 85 90 95 00 05 10 15 20
Sources: EIA, ICE, NYMEX
Net Ethylene Capacity Additions by Region
Thousand metric tons
35,000
30,000
Other Asia-Pacific
25,000
Northeast Asia
20,000
Africa and Middle East
15,000 Eastern Europe
W. Europe
10,000
Latin America
5,000
North America
0
-5,000
2000-05 2005-10 2010-15 2015-20 2020-25 2025-30
Source: ICIS
New Chemical Industry Investment in the U.S.
• Building began in 2010 with small
Complete Under Construction
projects to increase ethane
Planned Delayed/ Uncertain
utilization
8%
• As of September 2017, ACC is 20%
tracking 318 projects valued at
$185B
• 62% of projects are foreign-owned or
44%
include a foreign partner
28%
• Additional projects in Canada and
Mexico
• In addition, ACC is tracking more
than 600 plastic processor projects
Cumulative Announced Chemical Industry
Investments from Shale Gas
Number of Projects Billions
350 $200
325
$180
300
$160
275
250
$140
225
$120
200
175 $100
150
$80
125
$60
100
75
$40
50
$20
25
0 $0
Total Investment Number of Announced Projects
Geography of Shale-Advantaged Chemical Investment
* Each green pin represents one or more announced chemical industry investments