Shale Gas Feedstock Drives Chemical Industry Success

"The U.S. chemicals market, as a whole, is doing well. The industry is solid now,” Dave Hankins says. “U.S. chemicals are the most competitive in decades,” Martha More says. Why? “Shale gas,” both agree.

C. Kenna Amos

July 6, 2012

2 min read

Shale gas is driving the chemical industry’s growth because it’s a feedstock and it isn’t derived from crude oil. Hankins, U.S. chemical industry director for Siemens Industry Inc. (www.usa.siemens.com/industry), Spring House, Pa. says, “Shale gas is changing investment plans. And these are investments not seen in years.” The sum is approximately $25 billion to $30 billion for new ethane crackers, to convert shale-gas-associated natural-gas liquids, he says.

Moore, senior director for policy analysis and economics at the American Chemistry Council (ACC, www.americanchemistry.com), Washington, D.C. says, “Shale gas continues to be strong and drive the chemical industry. We’re continuing to see new announcements of new petrochemical capacity in the U.S. That translates to a 25 to 30 percent increase in ethylene capacity through 2017.”

For example, in late September 2011, Tulsa, Okla.-based The Williams Companies (www.williams.com) announced expansion of its Geismar, La., olefins facility. The expansion will increase the facility’s annual ethylene production capacity by 600 million pounds to a new annual capacity of 1.95 billion pounds. The company expects it to be placed into service in the second half of 2013. The expected capital spending ranges from $350 million to $400 million in 2012-13.

“The shale gas revolution in the United States… has given U.S.-based ethylene manufacturing a tremendous cost advantage over many other supply regions,” said Rory Miller, president of Williams’ midstream business, in a Sept. 20, 2011 press release. “The results are a revitalized North American petrochemical business.