When IHS Global Insight expert Gary Adams raved just a couple of months ago that domestic supplies of relatively low-priced natural gas promised the U.S. chemical industry and manufacturers “the opportunities of multiple lifetimes,” a skeptic might have questioned the rosy outlook.
Instead, the latest batch of reports about natural gas reveals there is plenty of evidence to justify the optimistic projections.
First, a report just released by the U.S. Energy Information Administration found the amount of technically recoverable U.S. oil and gas reserves is 35 percent greater than was estimated in 2011. According to the report:
The use of horizontal drilling in conjunction with hydraulic fracturing has greatly expanded the ability of producers to profitably produce oil and natural gas from low permeability geologic formations, particularly shale formations.
More good news: A Navigant study also provided encouraging production data. In its recent North American Natural Gas Market Outlook, Navigant predicted U.S. shale gas production will double to 56 Bcf/d by 2035 and represent 61 percent of total U.S. natural gas production.
Finally, RealClear Energy reports that the amount of natural gas in the Utica Shale may be underestimated, noting that much of Utica Shale gas actually lies beneath the better known Marcellus Shale.
“When drillers in Pennsylvania finish fracking the Marcellus they will only have to drill a little deeper to begin tapping the Utica,” the report said.
The U.S. petrochemical industry, in trouble just a few years ago, is making a spectacular comeback thanks to the boom in shale gas, shaking up the industry worldwide and spreading some discomfort through Asia and Europe.
An American Chemistry Council report found that plentiful supplies of natural gas shale have transformed America’s chemical industry from the world’s high-cost producer five years ago to among the world’s lowest-cost producers today, giving the U.S. an enormous competitive advantage in the cost of producing basic petrochemicals.
Dozens of companies have announced plans to expand U.S-based production capacity, and half of the potential investments are from firms based outside the United States, ACC President and CEO Cal Dooley recently told Congress.
Patrick Pouyanne, president of the refining and chemicals division of Total, a French conglomerate, told Agence France-Presse:
If you look at the line ‘United States’ in the profits of the large petrochemical groups, you will see that it comprises often 80 percent of the total profits.