In 2005, BusinessWeek sent it off to hospice care. But after all these years, chemical manufacturing isn’t dead. Quite the opposite.
The U.S. Energy Information Administration reports that in 2022, American “ethane demand increased by approximately 9%, or almost 0.2 million barrels per day.”
A “simple hydrocarbon with 2 carbons and 6 hydrogens,” ethane is “produced from natural gas wells” and, when separated, “is a major feedstock to steam crackers for the production of ethylene and its derivatives.” According to American Fuel & Petrochemical Manufacturers, ethylene is the “World’s Most Important Chemical,” and when processed into “four different compounds,” is used to make everything from food packaging to textiles, antifreeze to medical devices, insulation to tires.
Michael Arndt is now director of communications for The Harris Poll, so he is unlikely to revisit “No Longer the Lab of the World,” his article in the May 2, 2005 edition of BusinessWeek. Let’s do it for him.
“Chemical production … is becoming a has-been industry,” Arndt claimed. The U.S., once dominant in the field, was falling behind, as “[n]ew facilities in the developing world are often as sophisticated and productive as those in America, if not more so.” The “likely results” for the home team were “less investment, fewer jobs, and fewer scientific discoveries.”
The key suspect in the murder of U.S. chemical manufacturing, Arndt asserted, was the loss of “a natural advantage.” Natural gas, “a building block for plastics, fertilizers, and even pharmaceuticals,” was no longer cheap, and “neither imports nor new domestic supplies” would provide relief “anytime soon.” (In their cover story for the July 2, 2003 edition of TIME, Donald L. Barlett and James B. Steele, two liberal activists who pretend to be an “investigative reporting team,” tut-tutted about a “potentially chronic natural gas shortage.” The “journalists” approvingly quoted Alan Greenspan: “We are not apt to return to earlier periods of relative abundance and low prices anytime soon.”)
You know the rest. Yoko Ono, Mark Ruffalo, and Anne Hathaway fought bravely, but they couldn’t stop the fracking revolution. Between the year Arndt’s article ran and 2021, marketed production of natural gas from Pennsylvania wells rose by a factor of 45. The comparable number for Ohio was 27. For North Dakota, 19; for West Virginia, 12. Even the old-timers boosted their numbers. Texas posted an uptick of 87 percent and Louisiana more than doubled its production.
The boom made natural gas plentiful and affordable. Deliveries to power plants more than doubled. Natural gas began to steal market share from heating oil in the Northeast. And America went from a nonentity in LNG exports to a planetary player.
In 2011, the Houston Chronicle reported that “chemical companies are on the rebound,” sparked by “cheap natural gas prices.” A few months later, The Wall Street Journal wrote of “a glut of cheap natural gas.”
Chemicals’ recovery was legit, and sustainable. Not only did the industry hold its own, it grew — bigtime. Adjusted for inflation, chemical manufacturing’s contribution to GDP increased from $311.5 billion in 2005 to $439.6 billion in 2021. That’s an expansion of 41.1 percent. And jobs rebounded, too. When Arndt indulged his ain’t-it-awful scenario, chemical manufacturing employed 875,300 Americans. By January 2011, staffing bottomed out at 780,400. In December 2019, the pre-COVID-19 peak was attained: 856,300. Lockdown lunacy reduced the number of jobs, of course. But layoffs didn’t last. In February, employment was 917,200 — 4.9 percent higher than when “No Longer the Lab of the World” averred that “the U.S. industry is adapting abroad while withering at home.”
No investment better illustrates the rally better than Shell Polymers Monaca. It’s not located on the Gulf Coast, but in Beaver County, Pennsylvania. “Appalachia’s first ethane cracker” will have a huge impact on the region. It went online, officially, in mid-November, and an analysis by Robert Morris University found that over the next four decades, the facility will “produce $81.7 billion in economic activity statewide, with the commonwealth taking in an additional $515.4 million in income tax receipts.” (Yes, it got corporate welfare — sadly, any project of its size, anywhere in the country, benefits from “incentives.”)
The “America doesn’t make anything anymore” mantra gets clicks, viewers, and votes for economic ignoramuses — e.g., Tucker Carlson, Bernie Sanders, Peter Navarro, Joe Biden. But chemical manufacturing’s comeback should wholly humble its batty believers. Economic outcomes are rarely commanded from above. Customers, investors, technology, and public policy aren’t static. And their complex interactions have a pesky habit of reversing trends that appear, even to big-shot members of the media, unstoppable.
The supposedly smartest people in the room believed in the Hubbert peak oil theory - and they were all wrong. Same belief regarding other hydrocarbon extraction.
Despite the ignorance of the Democrat Party, Energy Is King! Being WOKE does not work against proven resources and the World depends on American Oil & Natural Gas. These Petroleum moguls are laughing all the way to the BANK! Biden only made them richer and the WOKE that invested in Windmills and Solar Panels poorer! To Joe Biden and the other idiots of the Democrat Party.....It's The Economy Stupid!! That's the only thing that Bill Clinton ever said that still rings true today!! Petroleum is KING and WOKE morons will never beat the Petroleum Industry! We need them today, tomorrow and forever!! If you learn nothing else in your lifetime, learn that Energy rules everything!! Are you listening Joe Biden......you idiot!!