Perspectives: From the Editor

Chemical Industry: The Good News Grows

U.S. chemicals output should outpace previous estimates.

By Mark Rosenzweig, Editor in Chief

Prospects are even brighter for the U.S. chemical industry than they appeared six months ago, reports the American Chemistry Council (ACC), Washington, D.C. In late June, ACC released a report entitled “Mid-Year 2014 Chemical Industry Situation and Outlook” that points to a stronger upswing than it previously predicted: “The consensus is that U.S. chemical output will improve during 2014 and into 2015. Indeed, our current expectations for 2014 are 0.5 percentage points higher than our year-end 2013 outlook.” [That outlook was summarized in “U.S. Chemical Industry Gets into Better Tune."] “During the second half of the decade, U.S. chemistry growth is expected to expand at a pace (over 4% per year on average) exceeding that of the overall U.S. economy,” the report adds. Moreover, it continues: “With the development of shale gas and the surge in natural gas liquids supply, the U.S. has moved from being a high-cost producer of key petrochemicals and resins to among the lowest-cost producers globally. This shift in competitiveness is boosting export demand and driving significant flows of new capital investment toward the U.S…. In a stark reversal to the trends of a decade ago, American chemistry is poised for a dynamic period of growth.”

Announcements made by chemical producers in June certainly underscore the upbeat forecast.

For instance, Chevron Phillips Chemical, The Woodlands, Texas, held a groundbreaking at Old Ocean, Texas, for the second of two new polyethylene plants, each of which will have a nameplate capacity of 550,000 t/y. The press release about the event boasts: “With this groundbreaking, Chevron Phillips Chemical maintains its first mover position within the petrochemicals industry to engineer and build world-scale ethylene and derivative facilities in the U.S. based on the successful development of shale resources.” The company also announced in June that it had started up the world’s largest on-purpose 1-hexene plant, a 275,000-t/y unit at LaPorte, Texas.

Also that month, ExxonMobil Chemical, Houston, announced the start of construction of a multi-billion-dollar ethane cracker at its Baytown, Texas, complex. The steam cracker will be able to process up to 1.5 million t/y; it will supply ethylene feedstock to downstream units, including two new 650,000-t/y-polyethylene lines at the firm’s Mont Belvieu, Texas, plant. “The project is made possible in large part by abundant, affordable supplies of U.S. natural gas,” notes Steve Pryor, the company’s president.

In addition, Dow Chemical, Midland, Mich., announced in June that it would begin construction of a 1.5-million-t/y-capacity ethylene plant at Freeport, Texas. “This world-scale ethylene facility is a foundational element in Dow’s strategy to utilize low-cost and advantaged shale gas feedstocks to enable growth in key value-added market-driven businesses,” says Andrew Liveris, CEO. The facility is part of a multi-billion-dollar investment on the Gulf Coast that includes 200,000-t/y “next generation” Nordel ethylene-propylene-diene monomer, 320,000-t/y high-melt-index specialty elastomers, 400,000-t/y Elite polyethylene, and 350,000-t/y specialty low-density polyethylene facilities.

Meanwhile, also in June, INEOS Olefins & Polymers USA, Houston, and Sasol Chemicals North America, Houston, announced a decision to form a 50/50 joint venture to build a 470,000-t/y bimodal high-density polyethylene plant in LaPorte.

This testifies to the attractiveness to non-U.S.-based companies of investing in Gulf Coast facilities. INEOS is headquartered in Rolle, Switzerland, and Sasol is based in Johannesburg, South Africa.

Further pointing up the allure to foreign firms, Brazil’s Braskem also revealed in late June that it would build a new polyethylene plant at its complex in LaPorte. The unit will make ultra-high-molecular-weight polyethylene, and will mark the first time the company will produce the product outside of Brazil.


rosenzweigweb.jpgMARK ROSENZWEIG, Editor in Chief of Chemical Processing, can be e-mailed at mrosenzweig@putman.net.

More from this perspective...

Title

How To Book Targets Chemical Substitution

Guide aims to help companies switch to safer chemicals.

12/20/2012

How Will The U.S. Economy Fare?

A new leading indicator promises to identify emerging trends earlier.

08/14/2012

Improve Your Plant's Performance

Heed some useful pointers to achieve and sustain better operations.

02/04/2014

Industry Safety Initiative Deserves Applause

The American Chemistry Council is moving proactively to influence legislation.

09/14/2009

Is Starting in Production a Wise Career Move?

The first job a newly minted engineer takes may have long-term impact.

09/16/2010

Is Water The New Carbon?

Companies face increasing pressure to disclose, as well as optimize, water use.

02/09/2011

It's time to untangle the Web

Our new site goes well beyond the magazine and provides focused, actionable information

11/05/2004

Italian Trial Covers Some Shaky Ground

Case about advising public on earthquake risk has broader implications.

10/18/2011

Just call it alchemical engineering

Technology really can transform worthless materials into gold.

02/05/2008

Let's close some glaring gaps

We need effective collaborative efforts to address technical and professional issues

12/06/2004

Let's honor real gold-medal performances

07/01/2004

Let’s cut through barbed wireless

Divergent standards could snag efficient deployment of devices.

06/16/2006

Let’s heat up efforts to save energy

Ample opportunities to boost efficiency certainly exist at most plants.

12/21/2005

Look on the Positive Side Of The Oil Spill

The Gulf of Mexico disaster may prompt some welcome developments.

07/12/2010

Make the most of control system migration

The right strategy may lead to significant improvements in plant performance

06/17/2008

Make the Most of Your Summer Reading

Two new books provide important insights and guidance about plant safety.

07/16/2009

Marshalltown Really Builds Upon a Legacy

State-of-the-art valve testing facility occupies site of historic factory

06/03/2010

Mississippi plants show their grit

As the first anniversary of Hurricane Katrina approaches, life remains far from normal in many areas of the Gulf Coast. Amid the destruction, though, some hard-hit chemical plants provide proof of what can be accomplished.

06/28/2006

NeSSI’s success should be a lock

The New Sampling/Sensor Initiative or NeSSI that replaces tubing, fittings and other hardware in a sampling system with miniature modular components makes sense. Enhancements now in the works should assure its success.

11/29/2006

New edition of pre-eminent handbook released

For more than 70 years, if one reference has epitomized what chemical engineering is all about it’s been "Perry’s Chemical Engineers' Handbook." Now, a new edition — the first in a decade — has just come out.

12/10/2007