AFPM '12: Next step for shale gas: US manufacturing renaissance

01 April 2012 01:30  [Source: ICIS news]

Charles DrevnaSAN ANTONIO, Texas (ICIS)--The advent of shale gas in the US has the potential to give the nation's manufacturing industry a cost advantage not just in energy but also in materials, executives for the American Fuel & Petrochemical Manufacturers (AFPM) said on Saturday.

In addition to methane, shale gas also contains natural gas liquids (NGLs), which US crackers use as feedstock to produce ethylene. Ethylene, in turn, is used to make polyethylene (PE).

The nation's cost advantage in polyolefins can extend down to manufacturers and finished goods, said Charles Drevna, president of AFPM. He made his comments on the sidelines of the International Petrochemical Conference (IPC).

"From the cracker on down to the finished goods, we've got an opportunity in this country and in specific regions in this country to have, in our opinion, a manufacturing renaissance, which is long overdue," he said.

"If we can make them here in this country, what an economic boon," Drevna said.

Much of the discussion about the nation's shale gas has concentrated on lower costs for natural gas and ethylene, said James Cooper, AFPM vice president of petrochemicals.

"What we want to do is take it to the next step," he said. "It doesn't stop at ethylene."

The key is to target value-added products, which typically create more money for each dollar invested, the so-called multiplier effect.

"If we're going to export things, let's export value-added products and see how much value-added we can get," Cooper said.

Earlier this month, Dow Chemical chief executive Andrew Liveris made a similar comment during the IHS CERAWeek energy conference in Houston. However, his comment was in the context of exporting liquefied natural gas (LNG).

"If we take that gas and turn it into higher value products, we can export those at a much higher profit, one that is felt through the entire economy," he said.

"We are all for exporting natural gas," Liveris said. "We just want to see it exported in solid form versus liquid form."

For its part, the AFPM is planning an outreach programme in the summer to discuss shale gas, regulations and policy.

The IPC lasts through Tuesday.

By: Al Greenwood
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