spinoff from shale

1. April 2016
SHALE GAS AND NEW U.S.
CHEMICAL INDUSTRY INVESTMENT:
$164 BILLION AND COUNTING

2. U.S. Chemical Industry Global CostAdvantage
Relative Position of U.S. (2005-2015)
(Petrochemical Production Costs)
2015PRODUCTIONCOSTS
Estimated*($/lb.)
GLOBAL SUPPLY
(billion lbs.) *Based on estimates from
best available data
HIGH
LOW
MIDDLE
EAST
UNITED
STATES
IN 2015
CHINA
WESTERN
EUROPE
OTHER
NORTHEAST
ASIA
RELATIVE
POSITION
OF UNITED
STATES
IN 2005

3. Increased production and robust
supplies of natural gas and
natural gas liquids (NGLs)
U.S. chemical industry benefits
from lower costs for energy and
feedstock
264 projects and $164 billion in
potential capital investment
announced as of April 2016
40% completed or underway,
55% in planning phase
61% is by firms based outside
the U.S.
ACC data
U.S. Shale GasChemical Investment

4.  Natural gas liquids, especially
ethane, are primary feedstock
for chemical-making in the U.S.
 Companies overseas mostly use
an oil-based feedstock
 Due to vast new NGL supplies,
U.S. ethane feedstock is selling
at historically low prices
 Huge NGL growth predicted;
sustained opportunity for U.S.
chemical industry
Natural Gas Liquids Key to U.S. CostAdvantage
NGL production to double by 2020
Ethane supplies to quadruple by 2025
IHS Report: “America’s New Energy Future: The
Unconventional Oil and Gas Revolution and the U.S. Economy
– Volume 3: A Manufacturing Renaissance,” Sept. 2013

6. Oil-to-Gas Ratio: A Proxy for
U.S. Petrochemicals Competitiveness
Oil price declines
have created some
economic uncertainty
Current ratio remains
very favorable for
U.S. competitiveness
Growth likely to slow,
but be offset by
stimulative consumer
effect
When the ratio is above 7, U.S. competitiveness is enhanced.
Sources: EIA, ICE, NYMEX
0
5
10
15
20
25
30
35
40
45
2005 2010 2015 2020
Oil-to-GasPriceRatio
Oil and Gas Ratio: A Proxy for U.S.
Petrochemicals Competitiveness

7. Cumulative Announced Chemical Industry
Investments from Shale Gas
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
0
25
50
75
100
125
150
175
200
225
250
275
300
Total Investment Number of Announced Projects
BillionsNumber of Projects
Source: ACC analysis, Dec. 2010 – March 2016

8. U.S. Chemical Industry Output from Shale Gas-
Related Investments
$0
$20
$40
$60
$80
$100
$120
10 11 12 13 14 15 16 17 18 19 20 21 22 23
Billions of 2015 Dollars
• By 2023, additional output from
$164 billion in capital investment
generates more than $106 billion per
year in new chemical industry
shipments
• This is an ongoing, permanent
upward shift in shipments

9. The Build-Out is Underway
(Chemical Industry Construction Spending)
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
94 96 98 00 02 04 06 08 10 12 14
Thousands
$ Billions, SAAR, 3MMA
Note: Data are presented as a 3 month moving average to smooth month-to-month variations.
Source: Census Bureau

10. $301 billion738,000
EconomicContributionsFromIncreasedChemical
IndustryInvestment
Permanent NEW jobs throughout the
U.S. economy by 2023 from $106 billion
in new chemical industry output
Permanent NEW U.S. economic output by
2023 from $106 billion in new chemical
industry output
Based on $164 billion in cumulative U.S. chemical industry
investment completed, underway, or planned as of April 2016

11. Unconventional Energy Benefits the U.S.
IHS Report: “America’s New Energy Future: The
Unconventional Oil and Gas Revolution and the U.S. Economy
– Volume 3: A Manufacturing Renaissance,” Sept. 2013
 Household income: $3,500 more in 2025
due to unconventional energy
 Jobs: Nearly 4 million jobs supported in
2025, up from 2.1 million in 2013
 U.S. GDP: Grows 3.2% by 2025, equal to
$500-600 billion
 IHS report measured economic
benefits of unconventional oil and
natural gas activity across value chain
Household Income

12. 50
60
70
80
90
100
110
120
130
140
150
1987 1992 1997 2002 2007 2012 2017 2022
United States Western Europe Japan
U.S. Is Capturing Market Share Away From
Western Europe
Chemistry Production (2012=100)
Sources: Eurostat, Federal Reserve, METI, ACC analysis

13. U.S. Outpacing Europe
“Natural gas prices in Europe are three times as high as in
America, and electricity prices are twice as high…It's very
hard to imagine how Europe can recover.”
- Paolo Scaroni, CEO, Eni
I think we’d be making a big mistake if we didn’t think hard
about how to encourage [natural gas production] right here
in the UK. We’re seeing businesses that have previously
gone off to Mexico and elsewhere come back to the U.S.”
- David Cameron, British Prime Minister
“Chemicals depend upon competitive energy and feedstock
costs…It could well be another European dinosaur.”
- Jim Ratcliffe, Chairman, INEOS
“When people choose whether to invest in Europe or the US,
what they think about most is the cost of energy. The loss of
competitiveness is frightening.”
Antonio Tajani, European Industry Commissioner

14. $14B
in NEW, PERMANENT
federal, state, and local
tax revenue from
increased chemical
industry output
(by 2020)
Nearly $30 Billion
Projected increase in
Net Exports of U.S.
chemicals
(2014-2030)
Rapid Growth in Net Exports of
Key Shale Gas-Advantaged Chemicals
Net exports of shale gas advantaged chemicals will grow
due to increased chemical industry investment in the U.S.
As of April 2016, $164 billion in U.S. chemical
investment is completed, underway, or planned.

15.  President Obama pledged to facilitate permitting of
new manufacturing plants
 Congress should enact “all of the above” energy policy
 Natural gas, energy efficiency, and energy recovery
are key parts of any national strategy
White House and Congress Must Help

16. Access & Infrastructure: Allow access to natural gas reserves on
government and private lands. Ensure reliable infrastructure to
transport supplies
State Regulations: Implement responsible, state-based regulations that
avoid undue restrictions on natural gas production
Permitting: Ensure timely approval of permits for manufacturing
projects and investments such as new chemical plants and expansions
Tax Treatment: Maintain accelerated depreciation in tax policy.
Minimize cost and reduce complexity for businesses
Policies Needed to Realize Potential