American Oil and Gas Reporter - October 2018 - 114

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Number of Projects

FIGURE 1
Cumulative Announced Chemical Industry Investments from Shale Gas

Total Investment

Number of Announced Projects

Source: ACC Analysis

into a stronger economy and new jobs."
According to ACC, the $202.4 billion
in capital spending could lead to $292
billion a year in new chemical and plastics
industry output, and support 786,000 jobs
across the economy by 2025. Those include 79,000 chemical industry jobs,
352,000 jobs in supplier industries and
355,000 jobs in communities where workers spend their wages.
From a global perspective, much of
the investment is geared toward markets
for chemistry and plastics products, which
ACC notes can improve the U.S. trade
balance.
Robust NGL supplies, especially
ethane, are key to the U.S. chemical industry's competitiveness, ACC points out.
NGLs are the main feedstock for basic

petrochemicals and plastics in the United
States, with overseas companies mostly
using oil-based naptha. Since feedstock
comprises 75 percent of the cost of ethylene production, the council says lower
prices favor U.S. chemical makers in
global markets.
Policy Decisions
The council says a number of key
policies will influence whether domestic
gas and NGL supplies remain robust, affordable and accessible and, in turn,
whether the U.S. manufacturing renaissance reaches its full potential. According
to the study, those include:
· Allowing access to oil and gas reserves on federal, state and private lands;
· Continuing responsible, state-based

regulations that avoid undue restrictions
on production;
· Expediting the building of infrastructure, such as pipelines, to transport
supplies;
· Ensuring a timely, transparent and
efficient regulatory permitting process
for manufacturing projects and investments; and
· Expanding access to foreign markets
for U.S. goods.
"A note of caution is in order," ACC
says. "U.S. manufacturers often rely on
inputs that are not available or made in
the United States to create products that
cost less, yet perform at the high level
our downstream customers have come to
expect from us. Protectionist trade policies
such as tariffs and quotas unnecessarily
raise the costs of those inputs, deter innovation and economic growth, and could
ultimately weaken our country's competitive advantage."
ACC says its analysis used the IMPLAN input-output methodology, an
economic model that quantifies interdependencies among industries or economic sectors.
This new analysis provides an update
to ACC's first report, Shale Gas, Competitiveness and New U.S. Chemical Industry Investment-An Analysis of Announced Project that it released in May
2013. That report examined 97 chemical
and plastics industry projects totaling
$72 billion in potential investment that
had been announced as of March 2013.
r

ESA Listing Adds Huge Costs, CEI Says
WASHINGTON-The economic impacts of the Endangered Species Act are
so large that states often impose regulations
and management regimes as part of their
efforts to prevent species from being
listed as threatened or endangered, the
Competitive Enterprise Institute says.
In its report, "Whatever the Cost of
the Endangered Species Act, It's Huge,"
CEI warns the actual costs of the ESA to
local and state governments, taxpayers,
and others are much greater than generally
acknowledged. It quotes one study that
predicts declaring only the greater sage
grouse as endangered would cost the
United States more than $5.6 billion in
annual economic output.
"This report makes it clear that over
the past 40 years of the Endangered
Species Act, costs have been obscured
and not even considered by policymakers,
Congress and the public," says Myron
Ebell, director of CEI's Center for Energy

and Environment. "When you consider
that the ultimate cost of this program
likely is tens, if not hundreds of billions
of dollars, at the same time species are
rarely recovered and taken off the federal
list, it's clear we are not getting what we
pay for."
The study, written by CEI Adjunct
Fellow Rob Gordon, shows government
estimates of its own costs to recover
species likely top $10 billion but there is
no systemic analysis of overall economic
impacts. Since writing the report, Gordon
has been hired as deputy assistant secretary
for policy, management and budget at
the U.S. Department of the Interior.
Gordon notes that ESA, enacted in
1973 to save animals facing extinction,
can severely restrict the way individuals
and businesses can use their properties if
a protected species may possibly or actually be found there. The institute adds
the law also requires complicated and

114 THE AMERICAN OIL & GAS REPORTER

potentially lengthy consultations with
regulators when a federal action, such as
issuing a permit, may affect a listed
species.
When these extra, obscured costs and
others are taken into account, Gordon
says they likely push the total cost of implementing ESA to hundreds of billions
of dollars.
In July, Interior unveiled proposed revisions to ESA enforcement that it projected would lessen the law's regulatory
burdens, he describes. Gordon says CEI
supports those reforms, but it encourages
the department to go further. "Whatever
the Cost" recommends several measures
he predicts will improve transparency
and accountability relating to estimating
costs, including:
· Improve expenditure reporting, with
the specific proposal that the U.S. Fish &
Wildlife Service encourage states to fully
report ESA annual expenditures, and that

American Oil and Gas Reporter - October 2018

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