1. State of the Chemical Industry & Legislative Priorities
Hector L. Rivero, President & CEO
“Clear the Air” Transportation in the Port Region Summit
March 2, 2017 11

2. Texas Chemical Council
70 Member Companies
200 Manufacturing & Research Facilities
$100 Billion in Physical Assets in Texas
Over 75,000 Employees
Over $1.5 Billion in State and Local Taxes
#1 State Non-Energy Export ($47 Billion Annually)
The Texas Chemical Industry is important to Texas, the region, the U.S. and even the world!
This industry is undergoing a renaissance, mostly due to available, accessible and affordable natural gas – a clean fuel and feedstock for the industry.

3. Association of Chemical Industry of Texas
450 Member Companies
Contractors, Suppliers, Service Providers
Over 400,000 Texas jobs
Beyond the $100 billion in member assets in Texas, the industry has greater reach into our communities with more than 400,000 Texas jobs in associated industry companies.
These are chemical industry suppliers, vendors, and those that build and maintain our facilities.

4. US Chemical Industry Overview
$800 Billion Annual US Chemical Output
Over 70,000 chemical products
96% of all manufacturing goods are touched by chemistry
804,000 American jobs created by the chemical industry
7x Job Multiplier
Avg. Salary - $93,000
$191 Billion in exports
14% of US exports
> 850 million tons shipped safely annually
Chemical exports have doubled in 10 years
Here is a quick national perspective regarding the Chemical Industry.
Avg. Salary of $93,000 ($30,000 higher than manufacturing industry average)
Despite the slowdown in the broader manufacturing industry, we have seen U.S. chemistry volume gains.
Even with the fall in oil prices, the U.S. chemical industry still has a favorable competitive position with regard to feedstock costs as natural gas prices have remained low.

5. US Chemical Industry Investment
Here is a quick look at the national Chemical Industry investment.
Source: American Chemistry Council

6. Texas Chemical Industry Investment
$45.8 Billion
Announced Investment 84
153,000
Texas Jobs
$1.8 Billion
State Tax Revenue
Here is a focus on new capital investment in the Chemical Industry in Texas.
The majority of this capital investment is along the Texas Gulf Coast.
Source: American Chemistry Council

7. Texas Chemical Industry Impact
Here is a look at the chemical industry’s economic impact.
Largest chemical producing state
$165 Billion in revenue
$5 Billion annually in capital improvements
#1 non-energy State export (over $47 Billion annually)
Over 75,000 Texas jobs / over 500,000 indirect jobs
$8.1 Billion in payroll
Average wage - $104,000 - (46% higher than avg. manufacturing wage & higher than the U.S. Chemical industry average $93K)
$2.9 Billion in state & local taxes
$5.5 Billion in federal taxes
Strategic infrastructure
(feedstocks, pipeline, deep water ports, rail, trucking, workforce)
Source: American Chemistry Council

8. Industry State Legislative Priorities
State Budget
Fair & Balanced Tax Policy
Protecting Economic Incentives (Ch. 313)
Workforce Development
Coastal Spine Initiative
Transportation Infrastructure
Defending Funding for TERP
(Texas Emissions Reduction Plan)
I highlighted Transportation Infrastructure and
Texas Emissions Reduction Plan because these will help me segue to the next slides about important issues.

9. Industry Air Quality Improvement
TERP: an important element of emissions reduction
Technology in new plants reduces emissions
Continuing progress to reduce emissions
~50% reduction in ambient NOx concentrations since ’85
~60% reduction in Highly Reactive VOCs since 2004
Transposed emissions pie chart – mobile source issue
Air quality improvement has been achieved while increasing production, creating jobs, growing the region’s population, & adding vehicles to roadways
The story of Houston’s air quality is positive:
Houston’s Air Quality improvement has been dramatic & continues to improve!
Plans are in place to continue Houston’s Air Quality improvement.
Air quality has improved while increasing production and building new plants, as well as increasing population and the annual vehicle miles driven in our region.
Houston’s Air Quality is comparable to and better than other large U.S. cities
2014 was our cleanest year on record. That year, Houston met EPA standards.
In 2015, a hot, dry and wild-fire plagued year, we saw increased ozone in the region.  The levels of ozone were slightly higher, and the number of days we exceeded the standard was higher as well.  We know that weather is a key factor that drives ozone formation.  Some years have more days with hot, dry, stagnant weather that can contribute to more days with high ozone.  Wildfires and agricultural burning, both nearby and far away, can also contribute to high background levels of ozone entering the area.  We know from the National Interagency Fire Center data that 2015 was a particularly bad wildfire season in the U.S.
In 2016, we had far fewer days that exceeded the 70ppb standard than in 2015, and overall levels have been lower even on exceedance days. 

10. Region’s Transportation Needs
Greater Houston Partnership: $22.7 billion in new capital projects coming on-line in 2017
Economic Alliance Houston Port Region identified $1.6 billion in priority transportation projects
Worker commutes increased
Product transportation increased
Rail, road & water
Primary transportation concerns
Safety, health & efficiency
Reference to Chad Burke’s earlier comments about 27 priority transportation projects – working with TxDOT, Harris County, local mayors and other partners.

11. Hector L. Rivero President & CEO
Chemical Manufacturers and Suppliers working together for the future of Texas!
Hector L. Rivero
President & CEO