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Shale Gas Boom Damaging US Butadiene Production

10/30/2012 | Editor: Dominik Stephan

The US shale gas boom is about to take its toll on the country's butadiene industry.
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The US shale gas boom is about to take its toll on the country's butadiene industry. (Source: US Energy Information Administration)

One man's meat is another mans poison – The US' love affair with shale gas takes its toll on the country's butadiene industry, a new study shows. The country might well be caught up in the dependency of butadiene imports from foreign producers.

New York/USA – The relatively recent and intense exploitation of US natural gas reserves is resulting in an increased dependence on butadiene imports, states a new report from energy analysts GBI Research: The business intelligence company’s latest study states that the disparity between butadiene production and demand will climb in the near future as the US moves away from crude oil and naphtha to the increasingly cheap natural gas.

The percentage of C4 hydrocarbons required for the production of butadiene is very low in natural gas compared to crude oil or naphtha. As a result, growing demand will necessarily require a boost in imports. US butadiene demand last year stood at 1.9 million tons – comparable to the 1.6 million tons the country produced. However, GBI Research predicts demand will hit 2.4 million tons by 2020, while butadiene yield will climb at a slower rate, reaching 1.9 million tons by the end of the decade.

See also our gallery Top 10 Oil Producing Countries!

Butadiene Production from Shale Gas Insufficient

The next four years in particular are expected to be relatively bleak in terms of butadiene production growth, but a number of on-purpose technologies which are currently in development are then expected to contribute to overall production – although it will take some time for these to emerge as a viable alternative supply option.

Butadiene Imports from Europe and East–Asia to Rise

Last year the US imported 329,118 tons of butadiene, with Canada, South Korea, Netherlands, China, the UK and Germany the leading suppliers. GBI Research expects rising demand to see this figure reach 524,916 tons by 2020.

More about the shale gas boom in our topstory The New Gold Rush: Who Benefits from the Shale Gas Boom in the US?

Shale gas boom changes US power grid: The US will retire one sixth of its coal fired power plants until 2020, figures of the U.S. Energy Information Administration (EIA) show. The generation capacity will in part be replaced by cheap natural gas.

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