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Shale Gas: Reshaping the US Chemicals Industry

Shale Gas: Reshaping the US Chemicals Industry

Full Title: Shale Gas: Reshaping the US Chemicals Industry
Author(s): PwC
Publisher(s): PwC
Publication Date: October 1, 2012
Full Text: Download Resource
Description (excerpt):

In a recent PwC report on the potential impact of shale gas on US manufacturing, it was stated that by 2025, shale gas could add more than 1 million workers to the US manufacturing industry and allow US manufacturers to lower their raw materials and energy costs by as much as $11.6 billion annually. This potential is based on the United States’ abundant supply of shale and the country’s technological innovations in mining, which could enable the production of an inexpensive source of energy for the foreseeable future. While shale gas reserves are being explored in many parts of the world, on the United States has been able to commercialize production on a large scale.

For chemical companies, the impact of shale gas has been to decrease the costs of both raw materials and energy. The price of US natural gas has declined from $12.50/MBTU in 2008 to approximately $3.00/MBTU in 2012, and prices are expected to decline further, at least in the short term, as a result of excess inventory. Based on industry reports, we estimate that the US chemicals industry has invested $15 billion in ethylene production, increasing capacity by 33%. As these investments take hold, yielding more supply, the United States could become a major, global, low-cost provider of energy and feedstocks to the chemicals industry.

 

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