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

New Museum Really Adds Up

Institution debuting next year intends to inspire interest in mathematics.

05/11/2011

New president will grapple with greenhouse gases

All the leading potential nominees favor “cap and trade”

03/13/2008

Obama Tackles Safety Board Vacancies

President nominates new chair and member for Chemical Safety Board.

04/06/2010

Operations: How Are You Dealing with the Four Ds?

Dull, dirty, dangerous and distant operations pose complex challenges

02/14/2014

Partnership Aims to Bolster U.S. Industry

Federal initiative and free software focus on improving manufacturing .

07/14/2011

Prestigious Prize Gets First Winners

International panel of judges selects five engineers for honor.

07/02/2013

Process management: Raise an alarm about alarms

Sure, having more alarms is a plus if they contribute to better plant operation.  But nowadays, more and more plants have numerous alarms that are causing more trouble than they are worth.

01/19/2005

Product stewardship takes a grave turn

European Union mandates have impacted products produced and sold in the U.S., and will ultimately affect the chemical industry, according to Editor in Chief Mark Rosenzweig.

08/17/2006

Protect the perimeter and the process

A visit to Honeywell's Geismar plant reminded Editor in Chief Mark Rosenzweig how to integrate security and control.

04/12/2006

Publishing of Research Draws Government Attention

Academic journals face significant new editorial and financial pressures.

01/18/2012

Publishing suffers a deep loss

Longest-serving editor embodied the best of the profession. Mark Rosenzweig pays tribute to the late Nick Chopey.

04/12/2007

Rapacious Researchers Steal Secrets

Two recent court cases highlight the peril from within facing the chemical industry.

02/16/2012

Recognize the Wider Impact of Recognition

Professional society awards provide a positive message to the public.

04/11/2012

Repair your maintenance program

Take a fresh look at how to improve staff productivity and skills.

02/28/2006

Research & Development: Call This an Inventive Approach

The federal government and a graduate school have set up an innovative partnership.

10/31/2012

Rosenzweig's Ramblings April 2010: Sustainability Proves Its Worth

Chemical Processing's Editor-in-Chief discusses a study that points to considerable cash flow benefits from better performance. Effectiveness in using resources differs markedly among some major chemical companies and that difference has a significant financial dimension, according to a recent report "Sustainable Value Creation by Chemical Companies."

07/06/2010

Rosenzweig's Ramblings December 2009: Grasp All the Lessons of Bhopal

Chemical Processing's Editor-in-Chief is worried that industry still hasn't adequately addressed one factor behind the disaster.

07/19/2010

Rosenzweig's Ramblings February 2009: Convince A Child To Explore Engineering

American kids need more awareness of engineering careers -- and a better education.

04/09/2009

Rosenzweig's Ramblings February 2010: We Need Another A.C. Gilbert

Chemical Processing's Editor-in-Chief remembers when many engineers of his generation played with Erector Sets when they were growing up.

07/13/2010

Rosenzweig's Ramblings January 2009 : How Should Industry Tackle Threats?

New report promotes inherently safer technology for hazardous facilities.

04/09/2009