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Shale Gas

Why Europe's Chemical Industry Needs new Technologies

| Editor: Anke Geipel-Kern

Benefiting from the shale gas bonanza, the American chemical industry is ready to fly like Superman.
Benefiting from the shale gas bonanza, the American chemical industry is ready to fly like Superman. (Illustration: Fotolia © ianrward)

No end in sight to the shale gas bonanza–Energy is now available in the US at bargain-basement prices. Moreover, there is strong demand for ethane as a cracker feedstock because at current prices it is virtually unbeatable. What affect does all of this have on value chains in the chemical industry? Are we looking at a catastrophe or an opportunity? That depends on whether you are a pessimist or an optimist.

The American petrochemical industry is going from strength to strength, and the reason for that is shale gas. The presentation by self-made entrepreneur Katherine Richard at the German Handelsblatt chemical industry conference in Cologne removed any remaining doubts.

Young, attractive and full of self-confidence and drive, the Harvard graduate and CEO of shale gas company Warwick Energy which started up just four years ago is the living personification of the consummate American business leader.

The message is as emphatic as the figures and forecasts themselves. Richard claimed that shale gas has set in motion an unanticipated renaissance in the American chemical industry, citing investment projects valued at more than $100 billion.

Companies which produce basic chemicals and fertilizers are the main beneficiaries at the moment, and all of them (with one exception) are US-based: Dow Chemical, Eastman Chemical, Lyondell Basell, Westlake Chemical, CF Industrie and Formosa Plastic. They are all planning a mind-boggling expansion of cracker and ammonia capacity on the American East Coast, which could eventually trigger an earthquake.

In contrast to Europe, the cracker feedstock is ethane which is essentially a waste by-product of “wet” shale gas extracted from the depths by fracking, and at this point it is virtually impossible to foresee the consequences. “The entire cracker industry in the US has now converted to ethane,” reported Roland Merger (BASF) at a VCW conference, adding that only Total and BASF continue to operate naphtha crackers.

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