The New Gold Rush: Benefits and Risks of the US Shale Gas Boom?
Treasure from the Deep – Resources for Decades to Come
There really do seem to be unlimited reserves of shale gas. Production from resource plays which are of interest to ethylene producers is just now getting underway. It is important to keep in mind that not all shale gas is the same. Experts make a distinction between dry and wet shale gas. Dry gas contains almost pure methane with small amounts of longer-chain hydrocarbons. Once the water is removed, the gas can be fed directly into the gas grid or delivered to an ammonia plant. Production is currently ongoing in dry-gas formations. Names such as Marcellus, Barnett and Utica crop up in diverse media. In his presentation, Cella emphasized that wet-gas formations are a very attractive resource because they contain methane, LNG, ethane and crude oil.
Certain Drawbacks – Shale Gas to pose Risks for US Economy?
Given all the euphoria, there is a tendency to forget that the feedstock transition from straight-run gasoline or naphtha to ethane creates risks for the US economy. Naphtha, gas oil, butane and other heavy derivatives can be used as feedstock in steam crackers which break those substances down into C2, C3 and C4 or longer-chain hydrocarbons. Ethane crackers however have less feedstock flexibility because the main product is ethylene. According to a study just published by GBI Research, changing the feedstock can have far-reaching consequences, affecting for example the production of propylene and butadiene which are both co-products of naphtha cracking. The US already imports 300,000 MT of butadiene. If production declines further due to a change in feedstock, analysts warn that the country will become even more dependent on expensive imports.
An expected shortfall in propylene production can make techniques economically feasible which were uncompetitive in the past such as direct dehydrogenation of propane to form propylene. Dow Chemical for example has just obtained a license from Honeywell subsidiary UOP for Oleflex technology. Platinum catalysts promote dehydrogenation of propane extracted from the new shale gas formations to form propylene. The company claims that the catalysts can be continuously regenerated, lowering production costs. Starting in 2015, Dow Chemical plans to use this process to produce 750,000 MT of propylene a year for polymer production at a world-scale plant in Freeport in the US.
Import Dependency, Environmental Issues and Unsolved Problems
In the midst of all the excitement, some concerns are also being raised by senior executives in the European chemical industry. BASF, Bayer, Evonik and others see a risk of falling behind as cheap gas floods the US market and energy prices there plummet.Dr. Thomas Haeberle, member of the Executive Board at Evonik, is among those who see a downside. In his opening address at this year’s Processnet & Dechema Biotechnology Conference, he drew attention to a definite competitive disadvantage for the German chemical industry and predicted that shale gas will have a long-term impact on the industry. Is the US witnessing its re–industrialisation? More on page 4!
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