Monday, June 17, 2013

Will shale gas create #chemjobs, or just engineering/construction jobs?

Also in this week's C&EN, an interesting set of comments reported by Michael McCoy from the annual meeting of the American Chemistry Council (the chemical industry's trade group) (emphasis mine):
Through the end of March, nearly 100 chemical investment projects that capitalize on shale gas had been announced, the report found. Valued at $71.7 billion, the new plants are expected to generate $66.8 billion in annual chemical output and create some 500,000 jobs in chemical plants and surrounding communities by 2020. 
“There’s been a dramatic change in the past five years,” Calvin M. Dooley, ACC’s chief executive officer, told reporters during a press conference at the event. 
Dooley was particularly proud that more than half of the announced spending is from companies based outside the U.S. In the decade prior to 2010, he said, investment left the U.S. at a prodigious rate, causing a 20–25% decline in the chemical industry’s employee ranks. 
Yet ACC’s top officers acknowledged that the full impact of shale gas is yet to be seen and that it can’t offset the effects of a weak overall U.S. economy, stagnation in Europe, or even production woes. On the first day of the meeting, ACC released statistics showing that U.S. chemical production this year through April is up only 0.6%.
 This comment about manpower was especially interesting:
And the blossoming of multiple new plants after many fallow years will strain the engineering and construction industries, executives acknowledged. As it is, companies that scheduled plant maintenance in the spring had trouble finding qualified welders and pipe fitters, Gallogly said, and the problem will only worsen when big ethylene facilities start getting built. 
“There should be significant manpower shortages,” he said. The ethylene crackers that have been announced won’t all be built, Gallogly predicted, and some of those that are built will be delayed for reasons of manpower and permitting.
It seems like there are always shortages of experienced welders.

One hopes that, after a while, there will be a boom in the hiring of research chemists in the chemical and polymer industries to take advantage of relatively inexpensive and plentiful natural gas. We've really yet to see evidence of that, though, just a lot of promised jobs. (FWIW, I think there will be.) 


  1. Natural gas production has been flat since early 2012, and prices have doubled since their lows around the same time. Coal bottomed out in terms of market share then as well, and has since been regaining share as gas prices have drifted back upwards. It looks like the fracking boomlet is already running out of steam, and the Red queen drillers are barely keeping their heads above water due to the attrocious decline rates of individual fracked wells.

    A lot of these crackers are never going to be built, regardless of how many pipe welders they can or cannot find.

  2. I have first-hand knowledge on Jim Gallogly. His skill set is to cut pay, and lay off employees. He has two reasons to comment on the lack of qualified workers. The first reason is to justify his decision not to invest in new plants, and instead to give special dividends to the shareholders. Secondly, when the competitions new ethylene and polyethylene plants come on line, Gallogly’s company will need to declare bankruptcy again, because their old plants will not be competitive. Suggesting bankruptcy is a long way off is just his personal payroll extension program.

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