US chemicals leader urges White House action on permitting

20 February 2014 17:03 Source:ICIS News

WASHINGTON (ICIS)--A top US chemicals industry leader on Thursday urged the Obama administration to follow through on promises to facilitate construction and production permitting, saying the sector is poised to make more than $100bn in investments.

Cal Dooley, president and CEO of the American Chemistry Council (ACC), said an analysis by the council shows that new investments in domestic US chemical and plastics manufacturing have topped $100bn.

“As of this month, 148 projects valued at $100.2bn have been announced,” Dooley said.

He said those projects  including new factories, expansions of existing facilities and process capacity improvements “could lead to $81bn per year in new chemical industry output and 637,000 permanent new jobs by 2023”.

He noted that those investments are tied to the newly abundant supplies of low-cost natural gas and natural gas liquids from shale formations.

Dooley said reaching and exceeding the $100bn investment level “is a historic milestone for America’s chemical industry and proof that shale gas is a powerful driver of manufacturing growth”.

“Thanks to the shale gas production boom, the United States is the most attractive place in the world to invest in chemical and plastics manufacturing,” he said, adding: “It’s an astonishing gain in competitiveness.”

But Dooley also indicated that realisation of the $100bn in industry investments with more than half of the total being from foreign firms  could be at risk because of permitting delays.

“Companies investing in large-scale manufacturing projects such as new factories and expansions face a complex permitting process that includes federal, state and local requirements,” he said.

Given the enormous growth potential represented in the new projects, Dooley said he was “encouraged by President Obama’s pledge to help make sure these projects happen”.

He noted that in his 28 January State of the Union speech, Obama promised to “cut red tape to help states get those factories built”.

“We’re glad the White House agrees that regulatory permitting issues must not be a roadblock to new US investment,” Dooley said, “and we are excited to get these projects approved and built.”

To realise those investments, Dooley said, “these companies need certainty as to the processes and timing for obtaining permits”.

“Other policies key to realising the shale gas opportunity include access to domestic natural gas resources, responsible, state-based regulation of production, and rapid development of infrastructure to transport supplies,” he said.

Many in the US chemicals industry and the upstream energy sector have been critical of Obama administration policies that have severely restricted access to natural gas resources on federal lands.

They also have opposed efforts by the Obama administration to impose federal regulations on hydraulic fracturing, the technique that along with horizontal drilling triggered the shale gas boom.

Industry prefers that state governments continue their decades-long record of energy development regulation without federal interference.

Energy industry and chemicals sector officials also have pressed the White House and federal agencies to move forward with approval for pipeline and other infrastructure permitting to take full advantage of the shale gas revolution and other North American energy resources.

The Obama administration has delayed for more than two years a final decision on its four-year study of the Keystone XL pipeline project that would bring more Canadian crude to US refiners.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By Joe Kamalick