January 14, 2013

BOOM TIMES:

Shale Gas Will Fuel a U.S. Manufacturing Boom (Kevin Bullis, January 9, 2013, MIT Technology Review)

People predicting a manufacturing renaissance in the United States usually imagine whirring robots or advanced factories turning out wind turbines and solar panels. The real American edge might be in something entirely more mundane: cheap starting materials for plastic bottles and plastic bags.

The plummeting price of natural gas--which can be used to make a vast number of products, including tires, carpet, antifreeze, lubricants, cloth, and many types of plastic--is luring key industries to the United States. Just five years ago, natural-gas prices were so high that some chemical manufacturers were shutting down U.S. operations. Now the ability to access natural gas trapped in shale rock formations, using technologies such as hydraulic fracturing and horizontal drilling, has lowered American prices to a fraction of those in other countries (see "King Natural Gas").

Over the last 18 months, these low prices have prompted plans for the construction of new chemical plants to produce ethylene, ammonia for fertilizer, and diesel fuels. Dow Chemical, for example, plans to spend $4 billion to expand its U.S. chemicals production, including a new plant in Freeport, Texas, that's due to open in 2017. The plant will make ethylene from the ethane found in many sources of natural gas. (The last such plant to be built in the U.S. was completed in 2001.)

The impact of the resurgence is being felt most strongly in the $148 billion market for ethylene, the world's highest-volume chemical and the foundation for many other industries.
Posted by at January 14, 2013 8:42 PM
  
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