CEO says cheap natural gas drives chemical industry

OREANDA-NEWS. September 16, 2016. Growth in chemical manufacturing in the US has been driven largely by hydraulic fracturing for natural gas, a trade association head said at a conference yesterday in Washington.

Cal Dooley, CEO of the American Chemistry Council, said that inexpensive gas has prompted \\$170bn of new investment in the US in the sector. More than \\$100bn of that amount was foreign direct investment.

One example is Shell‘s planned 1.6mn t/yr ethylene cracker and polyethylene plant in Beaver County, Pennsylvania, which sits in the Marcellus and Utica shales, near many pipelines for natural gas and natural gas liquids.

Dooley spoke at a conference held by Indiana University to recommend ways the next US president could help the manufacturing sector.

US natural gas priced at \\$3/mmBtu makes the US the lowest cost location for chemical manufacturing in the world, he said. The fuel is 85pc of chemical industry feedstock.

Low feedstock costs will lead to a positive trade balance in chemicals for the US, Dooley said. But the decline in natural gas prices could be temporary, he said.

"We need a Congress and an administration that wants to maximize the production of natural gas in the US," Dooley said. "That would send a strong message for a second wave of investments in the industry."

Meanwhile, local bans on hydraulic fracturing have had little impact on gas production. "I hope over time we can demonstrate how fugitive methane emissions and wastewater emissions are benign," Dooley said.

Donald Elliott, co-chair of the environmental practice group at law firm Covington & Burling, said at the conference that almost no Pennsylvania localities have chosen to use their power to ban the drilling technique.