By Ben DuBose
HOUSTON -- The "ethane
advantage" held by the US petrochemical industry is very
real, but it may not last that long.
Out of hundreds of votes cast by readers in a recent
industry poll, about 80% of professionals predict
North American ethane feedstocks will remain
cost-advantaged to the US for 10 years or fewer.
Relative to the rest of the world, 49% said the US would
hold its cost benefit for up to 10 years, while 31% predicted
the US to maintain its advantage for only up to 5 years.
Just 20% forecast the cost savings to last for a longer
period than the next decade.
Numerous new cracker projects are slated to come onstream in the second half
of this decade, as companies seek to capitalize on the surge of
shale-derived feedstocks. As many as 12 companies,
including Dow Chemical, have expressed
formal interest or plans to build new US ethylene
But if the latest poll is to believed, timing is a
significant issue. That is, companies need to
complete construction as soon as possible in
order to take advantage of short-term margins.
One obstacle to the US petrochemical industry's
advantage could come in the form of increased LNG exports. If more export projects are approved, it means more
of the shale gas will be sent to foreign buyers. That could, in
turn, raise demand and domestic ethane prices due to
Chemical companies such as Dow, however, say the US would be better served to export manufactured
goods rather than raw materials. The outcome of this
dispute could go a long way in determining the long-term
competitiveness of the US petrochemical industry.
To see more details on this poll as well as access prior
Hydrocarbon Processing poll results, click here.
(Editors note: Polls are where we
gather industry sentiment on significant issues of the day.
Visit the HP home page to weigh in on our latest poll
on crude oil transportation for North American