Chemical trade group predicts 15,000 jobs in NC from natural gas

According to chemical trade group’s prediction

jmurawski@newsobserver.comAugust 27, 2012 

A state government study projects several hundred jobs would be created from fracking in North Carolina. But a recent report put out by the American Chemistry Council puts the potential number of jobs generated from natural gas exploration much higher: 15,000.

The Washington trade group said this month that thousands of jobs could be created by building a single production plant to process gas into petrochemical byproducts that are used to make plastics and fabrics. However, North Carolina does not have a single production complex such as the one touted by the American Chemistry Council – nor has one been proposed.

The jobs cited in the American Chemistry Council report would not be dependent on the gas being fracked here – the fuel being processed by a plant could be piped in from other states where fracking is already occurring.

“North Carolina does have some advantages,” said Kevin Swift, the council’s chief economist. Among them is the proximity to a major chemicals sector and to an international shipping port in Wilmington.

At more than 40,000 jobs, North Carolina’s chemicals sector, which includes pharmaceutical companies, is the nation’s fourth largest, according to the trade group. The group’s research also shows that more than a dozen gas processing plants are being built or expanded in West Virginia, Louisiana, Texas and Pennsylvania.

One of the skeptics of the council’s report is Vik Rao, a member of the state’s newly minted Energy & Mining Commission and a former chief technology officer of Halliburton, the energy conglomerate that has used fracking since the 1950s and developed some of the key technologies used in the process.

“I saw the thing they sent,” Rao said, expressing disbelief at their jobs projection. “I mean, come on.”

The production plants in question are known as ethane crackers, because they break down gas into molecular components to make ethylene and other byproducts that are used to make trash bags, insulation, food packaging, diapers, sealants and coatings.

Rao said North Carolina likely lacks sufficient natural gas resources to justify building an ethane cracker plant. He said the more likely economic benefit would be the use of those byproducts, which would be processed elsewhere, by this state’s manufacturing and textile industry.

Rao also said this state lacks adequate pipelines to move gas into the state for processing.

Rao is now executive director of the Research Triangle Energy Consortium, a collaboration between area universities and researchers. He stressed that he was speaking from his experience in the industry and not as a member of the Energy & Mining Commission.

The American Chemistry Council’s jobs forecast for North Carolina comes as the state’s contentious debate over fracking moves from the legislature to the agency level.

The Energy & Mining Commission is set to hold its first meeting next month as it embarks on the task of conducting three studies and writing regulations to govern fracking here, a process that is expected to take more than two years. Fracking is industry shorthand for hydraulic fracturing, the process of pumping millions of gallons of water and chemicals underground to break up shale rock formations and flush out the gas trapped inside

The N.C. Department of Environment and Natural Resources last spring projected that fracking could create an average of 387 jobs a year in this state. The state’s natural gas deposits are believed to be concentrated in Lee, Moore and Chatham counties.

The American Chemistry Council’s prediction of 15,000 jobs includes what economists call “multiplier effects.” The direct jobs at the hypothetical North Carolina ethane cracker would come to 2,600, Swift said.

The vast majority of jobs created would be suppliers of such things as motors and pipes, as well as car dealers and physicians and other services spawned by the economic boom from an ethane cracker.

Murawski: 919-829-8932

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