| Petchem & energy: a winning combo in the Northeast US
July 16, 2019 | By Rick Stouffer, Editor, Kallanish Energy
The U.S. petrochemical and energy industries seemingly were made for each other – certainly in the northeast part of the U.S., Kallanish Energy reports.
At last month’s Northeast Petrochemical Exhibition & Conference in Pittsburgh, (presented by Petrochemical Update) the relationship between petrochemicals and energy was brought home to attendees by American Chemistry Council CEO Cal Dooley.
Chemical industry dominates in region
Centering on four states, including Pennsylvania, Ohio, West Virginia and Kentucky, Dooley pointed out the chemical industry is the second-largest, second-largest, largest and fourth-largest manufacturing industry in those states, respectively.
And nothing goes with chemicals like energy. “The chemical industry is extremely energy-intensive, with consumption mostly as feedstock,” according to Dooley. “Over the last 10 years, there has been a renaissance in the U.S. chemical industry.”
It’s no coincidence the renaissance in the U.S. chemical industry corresponds with the huge growth in shale gas production in the country – again, with an emphasis on the Appalachian Basin, the Marcellus and Utica Shale plays.
Cheap and plentiful natural gas
Cheap and plentiful natural gas, including natural gas liquids, has led the chemical industry to announce 334 new-build and expansion projects worth $204 billion – all since 2010.
Of that total, 40% is planned, 32% is built, 21% is under construction, and 7% has been delayed, according to Dooley.
“In 2017, 49% of all manufacturing construction spending — $30 billion – was by the chemical industry,” according to Dooley. No other industry was even close.
One word: Plastics
Much of the petrochemical industry expansion is plastic processing capacity. Two-thirds of announced chemical industry investment is bulk petrochemicals and plastic resins, according to Dooley.
Plastics means ethylene, ethylene comes from ethane, the primary wet component of wet gas. Again, the conversation returns to the Appalachian Basin and the quartet of states including Pennsylvania, Ohio, West Virginia and Kentucky.
“The greatest growth in the U.S. through the year 2050 in natural gas liquids production will be in the Appalachian Basin,” Dooley told his audience.
Pipelines and storage
“There is the potential for $35.8 billion in new chemicals and plastics manufacturing investment in the quad-state region,” Dooley added.
To reach such lofty potential, the region needs sufficient pipeline capacity and NGL storage, two subjects which continue to get a lot of attention in the basin.
“Storage capacity is needed to create a regional trading hub, which could also support the Gulf (of Mexico) region,” according to Dooley. |
