• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 3 hours Theresa May to Step Down
  • 2 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 10 hours Old - New Kim: Nuclear Negotiations With U. S. Will Never Resume Unless Washington Changes Its Position
  • 6 hours IMO 2020 could create fierce competition for scarce water resources
  • 6 hours IMO2020 To scrub or not to scrub
  • 9 hours India After Elections: Economy And Hindu Are The First Modi’s Challenges
  • 6 hours Devastating Sanctions: Iran and Venezuela hurting
  • 5 hours Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 1 hour Total nonsense in climate debate
  • 15 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 4 hours Level-Headed Analysis of the Future of U.S. Shale Oil Industry
  • 8 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 8 hours Apple Boycott in China
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Trending Discussions

U.S. Shale Just Triggered A Chemical Industry Renaissance

The shale revolution in the U.S. has led to a boom in domestic natural gas production, to the point that America is expected to become a net exporter of natural gas on an average annual basis by 2018.

Abundant gas at home has also led to a renaissance in the petrochemical industry in the U.S., which had suffered a downturn in 2008 and 2009. But then came the shale revolution, and chemical companies in the U.S. now use the affordable ethane—a natural gas liquid derived from shale gas—as a feedstock.

Abundant and cheap, shale gas and ethane are now feeding the next U.S. chemical revolution, with 294 new projects in the chemical industry—due to shale gas—that were completed, started, or planned as of March 2017, according to the American Chemistry Council (ACC).

The U.S. chemical industry is outpacing total industrial output growth rate, and accounts for more than half of construction spending by the manufacturing sector, the ACC said in its year-end outlook in December 2016. Growth is expected to continue, and the industry is seen growing faster than the U.S. economy by 2020.

In an infographic from June 2016, ACC summed up some figures of the U.S. chemical industry—it’s a US$797-billion enterprise that provides more than 15 percent of the world’s chemicals and accounted for 14 percent of U.S. exports in 2015—the largest exporter in the U.S.

“Over the next five years, the most dynamic growth will occur in the Gulf Coast region, followed by the Ohio Valley and Southeast regions. In the long-term, the U.S. chemical industry will grow faster than the overall economy, and by 2020, U.S. chemical industry sales are expected to exceed $1 trillion,” ACC said in its outlook in December last year.

Taking advantage of the shale revolution, chemical companies and integrated oil supermajors are now announcing billions of investments in new petrochemicals plants and manufacturing ventures over the next few years.

Dow Chemical, which had cut 5,000 full-time jobs and closed 20 plants at the height of the 2008-2009 recession, announced in May this year additional projects and investments that extend its U.S. growth investments to more than US$12 billion over a 10-year period. Related: OPEC’s Crude Exports To The U.S. Near All-Time Lows

“The Company will pursue additional investments to benefit from shale gas economics, further enhancing feedstock flexibility and reducing volatility from these advantaged inputs,” Dow Chemical said in its statement.

A couple of months earlier, ExxonMobil had said that it had plans to expand its manufacturing capacity along the U.S. Gulf Coast through planned investments of US$20 billion over a 10-year period to take advantage of the American energy revolution. Exxon’s ‘Growing the Gulf’ expansion program consists of 11 major chemical, refining, lubricant and liquefied natural gas projects at proposed new and existing facilities along the Texas and Louisiana coasts. Most of Exxon’s planned new chemical capacity investment in the Gulf region is targeted toward export markets in Asia and elsewhere, the company said.

“We are using new, abundant domestic energy supplies to provide products to the world at a competitive advantage resulting from lower costs and abundant raw materials. In this way, an upstream technology breakthrough has led to a downstream manufacturing renaissance,” Exxon CEO Darren Woods said.

For one of those 11 projects, Exxon signed in May an agreement with Saudi Basic Industries Corporation (SABIC) to conduct a detailed study of a proposed petrochemical project in the Gulf Coast region and to begin planning for front-end engineering and design work. Related: Arab States Extend Deadline For Qatar Ultimatum

Royal Dutch Shell is also investing in expanding its chemicals business in the U.S. Shell Chemical is expanding its chemicals manufacturing site in Geismar, Louisiana, with a fourth linear alpha olefins (AO) unit, which, with its 425,000-ton-per-year capacity increase, will make Shell’s Geismar site the largest AO producer in the world.

Shell is also getting ready to begin main site construction of a petrochemicals complex in Pennsylvania in late 2017, with commercial production beginning early next decade.

“The petrochemicals complex will use ethane from shale-gas producers in the Marcellus and Utica basins to produce 1.6 million tonnes of polyethylene per year,” Shell said in April.

According to ACC, the Appalachian region could become a second center of U.S. petrochemical and plastic resin manufacturing, similar to the Gulf Coast.

“Proximity to a world-class supply of raw materials from the Marcellus/Utica and Rogersville shale formations and to the manufacturing markets of the Midwest and East Coast has already led several companies to announce investment projects, and there is potential for a great deal more,” ACC President and CEO Cal Dooley said in May this year.

The chemicals industry, which directly touches more than 96 percent of all manufactured goods, is taking full advantage of the American shale revolution.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Trending Discussions

Leave a comment
  • Bill Simpson on July 06 2017 said:
    It would seem easier to get chemicals to Asia and South America in big ships from the Gulf Coast through the Panama Canal, than from inland Appalachia. Those new locks are enormous.
  • sneha agarwal on February 02 2019 said:
    Vasthi Where So2 gas analyzer are calibrated, (LNG) sample conditioning systems are build, analytical shelters are manufactured, and systems are being

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News