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America's Next Manufacturing Boom In One Word: Plastics

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CAMBRIDGE, Mass., January 11, 2013 — Rev up your MakerBots: Plastic is getting cheaper.

The price for domestically manufactured plastics has plummeted because of the natural gas boom, according to MIT Technology Review. In the United States, for example, it currently costs $300 to make a ton of ethylene from the ethane found in natural gas, down steeply from $1,000 a few years ago. The cost to make it in Asia is $1,717. Ethylene forms the basis for entire industries, everything from toys to clothes to packaging to shampoo.

As a result, companies are reopening plants that closed years, even decades ago.

Dow Chemical announced this week that it had reopened an ethylene manufacturing plant in Hahnville, La., that had been idle since 2009. The move is a first step in the company's strategy to increase investment in the Gulf Coast region by "cracking" ethane to make ethylene and another chemical, propylene. They plan to spend a total $4 billion to expand U.S. chemicals production, including a new ethylene plant, due to open in 2017, in Freeport, Texas. (The last such plant to be built in the United States was finished in 2001.)

Ed Morse, an energy analyst at Citigroup, argues that the natural gas industry will bring around 3 million new jobs directly to the United States by the end of this decade, which adds up to 3 percent to our GDP and trillions in additional tax revenue.

Everybody loves jobs. But the reverticalization of Dow's petrochemical industry won't be greeted with unadulterated happiness in Louisiana's Cancer Alley. Is this an example of the "resource curse" — lopsided economic development driven by a natural resource boom?

Source: fastcompany.com, © 2013 Mansueto Ventures LLC. All rights reserved.

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