Shale Gas Production Fuels U.S. Chemical Manufacturing Success

Abundant supplies give companies competitive edge


Monday, November 12, 2012 3:51 pm EST



Public Company Information:

"Looking back a couple of decades, chemicals were among our nation’s top exports"

HOUSTON--(BUSINESS WIRE)--Abundant, affordable domestic natural gas resources have provided the U.S. petrochemical industry with a substantial competitive advantage, a senior ExxonMobil Chemical Company executive said last week.

In a presentation at the Shale Petrochemical Manufacturing Summit at Philadelphia’s HUB Cira Centre, Lynne Lachenmyer, senior vice president, ExxonMobil Chemical Company, said that increased natural gas production is revitalizing the U.S. petrochemical industry.

“The ability to tap into vast shale resources right here in the U.S. is an opportunity that we have to develop. We are in the middle of an industry in transformation,” she said. Relatively low natural gas prices are providing U.S.-based chemical manufacturers with an advantage over competitors in other countries that rely on more expensive feedstocks and energy for their operations.

Lachenmyer said, “Natural gas from resources such as the Marcellus shale in Pennsylvania presents a unique opportunity to revitalize the U.S. economy, and the petrochemical industry is part of that. It is an opportunity to grow our economy, create new jobs, and capture early mover advantage to increase U.S. manufacturing competitiveness.”

Shale gas and associated liquids produced throughout the country can support all the major chemical-producing regions, including the U.S. Gulf Coast, which today serves as a major hub of production of key chemical building blocks, such as ethylene.

“Looking back a couple of decades, chemicals were among our nation’s top exports,” Lachenmyer said. “But the situation changed and we were on the verge of becoming a net importer. Now the industry is back on the path of competitively serving the growth markets of Asia and other locations through exports.”

With the additional lower-cost ethane available in North America, relative to naphtha and other liquid feeds, steam crackers in North America are running these lighter feed slates to produce ethylene at a significant cost advantage, Lachenmyer said.

“In the last decade, new integrated refining-chemical complexes, principally in Asia or the Middle East, have tapped into labor and logistical advantages,” she noted. “Today unconventional gas growth in North America is providing the next major source of advantage via affordable energy and feedstock from natural gas and ethane. For the first time in a decade, producers in North America have announced expansions in the form of debottlenecks and new steam crackers.”

ExxonMobil Chemical has filed permit applications for a petrochemical expansion at its Baytown Olefins Plant in Texas where it plans to add an ethane cracker. The company also plans to add premium polyethylene facilities at the nearby Mont Belvieu Plastics Plant. It will make a final investment decision following completion of these reviews and approvals.

If developed, it is estimated that the project would create about 10,000 construction jobs and about 350 permanent jobs would be added to the company’s workforce of 6,500 the Baytown area. The proposed project would also have a multiplier effect and create an additional 3,700 jobs in the local community.

“The proposed investment reflects ExxonMobil’s continued confidence in the natural-gas driven revitalization of the U.S. chemical industry,” Lachenmyer said. “The natural gas revolution in the U.S., driven by industry innovation, is enabling U.S. chemical manufacturers such as ExxonMobil to invest in North America, create thousands of U.S. jobs and increase sales to domestic and global markets.”

About ExxonMobil Chemical

ExxonMobil Chemical is one of the world’s premier petrochemical companies with manufacturing, technology, and marketing operations around the world. The company delivers a broad portfolio of products and solutions efficiently and responsibly, with a commitment to create outstanding customer and shareholder value. ExxonMobil Chemical endorses the principles of sustainable development, including the need to balance economic growth, social development and environmental considerations.

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Lynne Lachenmyer, senior vice president, ExxonMobil Chemical Company, said that increased natural gas production is revitalizing the U.S. petrochemical industry. (Photo: Business Wire)
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ExxonMobil Chemical
Margaret Ross, 281-870-6607