Correction: An earlier version of this article incorrectly stated an investment amount. It was $47 billion, not $130 billion. This version has been corrected.
Last June, Chevron Phillips Chemical broke ground on a pair of facilities in Texas. When they open in 2017, the company projects, those plants will produce a combined 1 million metric tons per year of plastic resin, which will find its way into plastic bags, piping and bottles. Along with a third plant, the facilities will create 400 new permanent jobs, along with 10,000 temporary ones while they’re being built.
Those jobs are part of a mini-resurgence of U.S. plastics manufacturing. The sector has added 60,000 jobs since mid-2009, a 12 percent increase. It has reversed a job-shedding trend that began in 2000, and it has nearly recouped all the jobs it lost in the Great Recession.
Industry advocates say more job growth is on the way: On Wednesday, the American Chemistry Council, a trade group, will release an economic analysis projecting that plastics makers will add 127,500 direct jobs over the next decade. That is thanks to $47 billion in investments that companies have announced since 2010.
The growth in the sector largely reflects the nation’s energy dynamics — and, in particular, the abundance of cheap natural gas being tapped in recent years.
Breakthroughs in hydraulic fracturing, or fracking, have sent U.S. gas production surging and pushed down electricity costs for consumers who rely on gas-fired power plants. Those lower prices have given many U.S. manufacturers, who are huge electricity users, a competitive boost in the global marketplace.
Industry groups have long said that that boost should spur more U.S. factory production and job creation; the country hemorrhaged manufacturing jobs in the 2000s. There isn’t widespread evidence that that has yet come to pass, at least not on the job front: Manufacturing as a whole remains more than 1 million jobs short of its pre-recession peak.
In plastics, the United States’ cost advantage in natural gas is particularly large, industry leaders say. Fossil fuels are not just a source of electricity for plastics manufacturing but are also an essential ingredient. Three-quarters of the raw materials, or feedstock, for American-made plastics are liquids distilled from natural gas. In Europe and China, those raw materials largely come from oil. Even with the recent drop in oil prices, the United States’ natural-gas-based feedstock is still dramatically cheaper than oil-based feedstock.
“Feedstocks in the U.S. have completely flipped our fortunes” compared with international competitors’, Steve Russell, vice president of the chemistry council’s plastics group, said in an interview. That advantage has fed through to an increase in U.S. plastics exports and projections for a tripling of those exports by 2030, said Martha Moore, the group’s senior director of policy analysis and economics.
The group’s analysis projects that investment and hiring will peak between 2018 and 2020, and that if hiring by suppliers and by service industries supported by factory jobs is factored in, the total jobs gain will reach 460,000.
Russell said he sees no reason to worry that the announced investments and projected hiring will not come through — largely because policymakers have shown no signs of slowing the projects. “We have not experienced permitting backlogs. We have not experienced other things that folks were afraid of,” he said. “It seems to be moving, to everyone’s surprise and appreciation.”