Shale gas boom leads to new investments in chemical business

Houston Chronicle:
Chevron Phillips Chemical Co. said its industry may spend $30 billion to build U.S. factories that convert natural gas into plastics because shale gas has made American production the cheapest outside the Middle East.
Output from shale formations will yield enough natural-gas liquids such as ethane to support about five new plants that produce ethylene and related plastics, said Mark Lashier, an executive vice president at Chevron Phillips. Each facility will cost $5 billion to $6 billion and will be built over more than a decade, he said today in an interview in Houston.
The company, a joint venture of Chevron Corp. (CVX) and ConocoPhillips (COP), is spending $5 billion to build a new ethylene plant in Baytown, Texas, by 2017 as well as two polyethylene plants and related infrastructure, Lashier said. Dow Chemical Co. (DOW), Sasol Ltd. (SOL), Formosa Plastics Corp. (1301) and Royal Dutch Shell Plc (RDSA) also are studying plans to build new plants, known as crackers, to use the relatively inexpensive gas.
“It’s tens of billions of dollars that the industry will have to invest to take advantage of that,” Lashier said at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates.
Cheap gas is doubly advantageous to chemical makers because it’s used as a raw material and to power factories. U.S. gas is at a record low relative to oil, which is used to make petrochemicals in Europe and Asia.
U.S. plastics exports may surge as new plants start, creating the need for new infrastructure to handle the increased shipments, Lashier said. Plastics producers need to be sure they have port, rail and trucking capacity in place to get their products to Europe and Asia by the most efficient means, he said.
...
This should mean more export business for the state of Texas and the Port of Houston.  It will also mean significant new jobs for manufacturing and construction.  It is another spin off of jobs from the energy business. It something that those who are trying to strangle domestic production of energy should consider.
 

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