Thursday, April 19, 2012

Cheap Shale Gas Revolutionising US Industry

The shale gas boom is injecting new life into US manufacturing. Several parts of the US are beginning to enjoy renewed economic activity, thanks to the fracking shale gas boom. Despite the improvement to the US economy, US President Obama is not altogether pleased at these developments, and has already taken steps to clamp down on the shale gas industry, once it is politically safe for him to do so. A good example of new production brought about by cheaper natural gas prices, is Dow Chemical's planned US expansion in ethane cracking to ethylene, and in new propylene supplies.
Dow plans to supply the required ethane and propane for these projects through a variety of supply arrangements, including: a possible joint venture fractionator in Texas, supply from existing fractionators, supply from future new fractionators to be built within the industry, and potential supply deals from various shale gas opportunities such as the Eagle Ford and Marcellus shale regions. Dow has signed ethane and propane supply contracts based on the Eagle Ford shale gas and is pursuing several more agreements from this area. In addition, Dow has signed a Memorandum of Understanding (MOU) with a wholly-owned subsidiary of Range Resources Corporation (NYSE: RRC), stating plans to enter into a long-term supply agreement for the delivery of ethane from the Marcellus Region in southwest Pennsylvania to Dow’s existing operations in Louisiana. “As the largest consumer of propylene in North America, Dow has a unique opportunity to invest aggressively for on-purpose propylene production from propane. Additionally, Dow is the largest producer of ethylene in North America, which provides capabilities to increase our use of ethane in existing ethylene production units – and to grow,” Fitterling said. “All of these investments, combined with Dow’s planned agreement with Range Resources, will dramatically increase our capability to consume ethane, while maintaining our industry-leading feedstock flexibility.” _Businesswire
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Illinois is beginning to enjoy some of the economic benefits of the fracking boom
H/T Carpe Diem
If US voters can eject their current energy starvationist government -- in the persons of Barack Obama, Ken Salazar, Lisa Jackson, John Holdren, etc etc -- they will be in a much better position to regrow a prosperous economy.

That is the only way the US will be able to dig its way out from under the mountain of debt its government has created -- by growing entire new industries and sectors of commerce.


Blogger Whirlwind22 said...

Too bad this drought here in PA has led them to suspend local water use for fracking. Climate Change maybe?

3:54 PM  

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