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Study: US Shale Energy to Increase Plastics Production

Plastics Business

A new IHS study projects US shale energy development to be responsible for a 10 percent increase in production for the plastics industry by 2020. That number rises to nearly 13 percent in 2025. The report, America's New Energy Future: The Unconventional Oil and Gas Revolution and the Economy - Volume 3: A Manufacturing Renaissance, is the last of a three-part series that offers an independent assessment of the importance of shale energy development to the US economy.

The report also finds that over the next decade the US plastics industry will realize significant increases directly attributable to shale energy development in employment, value added to GDP and labor income. By 2020, the shale boom will be responsible for adding close to 15,000 jobs, nearly $1.3 billion in value added to GDP and $868 million in labor income.

The US trade position will continue to improve, owing to the significant reduction in energy imports and the increased global competiveness of US-based energy-intensive industries, the IHS study says. Driven by a rise in domestic production and manufacturing that will displace imports, as well as a favorable export position for these industries, the trade deficit will be reduced by more than $164 billion in 2020-equivalent to one-third of the current US trade deficit.

The new study builds on previous IHS research that focused solely on upstream shale energy activity and found that that sector of the energy value chain currently supports more than 1.7 million jobs and will grow to nearly 3 million by the end of the decade. It widens the breadth of the research to include the entire range of economic activity that begins with the development of oil and gas production and ends with the overall macroeconomic contributions on the manufacturing sector and broader US economy.

The transportation of these shale resources, their transformation into products, and then into industrial uses, such as the production of petrochemicals, currently support nearly 377,000 jobs throughout the economy. Combined with upstream activity (oil and gas production), the entire shale energy development value chain currently supports more than 2.1 million jobs. Total jobs supported by this value chain will rise to more than 3.3 million in 2020 and reach nearly 3.9 million by 2025, the study says.

Click here to download the complete report and methodology. For more information on the report, contact Jeff Marn at 202.463.8213 or Jeff.marn@ihs.com.