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ACC Lauds Findings in IHS Study Projecting Dramatic Growth in Natural Gas Production and Petrochemical Feedstock


Contact: Warren Robinson (202) 249-6516  
Email: Warren_Robinson@americanchemistry.com 

WASHINGTON, D.C. (October 23, 2012) – The American Chemistry Council (ACC) today welcomed a study by IHS Global Insight that foresees significant growth in domestically-produced supplies of natural gas and attractively-priced natural gas liquids essential to chemical manufacturers.

“This study delivers plenty of good news for the chemical industry and other American manufacturers. Abundant and affordable supplies of natural gas are revitalizing the chemical industry and providing a competitive edge for manufacturers in the global marketplace. This study confirms that these benefits from natural gas liquids are not a short-term phenomenon but an ongoing trend expected to last for decades,” said ACC President and CEO Cal Dooley.

According to the IHS study, U.S. natural gas production has risen dramatically in the last five years, from 52 billion cubic feet (BCF) per day to 65 BCF per day. By 2020, natural gas production will soar to 80 BCF per day and then to 100 BCF per day by 2035. Nearly all of the growth in supply will come from unconventional sources such as shale gas, the study said.

The production of natural gas liquids (NGLS) from unconventional sources such as shale gas and others will grow from 1.8 million barrels of oil equivalent a day in 2012 to 4.8 million barrels of oil a day in 2035, or potentially more than 2.5 million barrels a day oil equivalent of new petrochemical feedstocks supply, the study projected. The chemical industry now uses a slightly more than one million barrels a day equivalent.

“These production numbers are encouraging and herald a bright future not just for the oil and natural gas industry but also chemical manufacturers. The IHS projections for increased gas production underscore the importance of sound regulatory policies at the state level that will determine whether natural gas from shale remains a ‘game changer’ in manufacturing or a sorely missed opportunity to generate economic growth and jobs,” Dooley said.   

Demand for natural gas is also expected to soar, increasing from almost 70 BCF per day in 2012 to 96 BCF per day in 2035, the study said, with utilities leading the way, followed by the petrochemical industry and other energy-intensive manufacturers. The study said the demand growth in the United States can be met almost entirely from North American sources. “This is an extraordinary development virtually unthinkable as recently as five years ago and underscores the importance of mobilizing all of our domestic sources of energy production,” Dooley said. 

Industrial sector demand for natural gas has growth potential, the study noted, because unconventional supplies of natural gas are “dramatically increasing the availability and potential supply of attractively priced natural gas liquids (NGLS).” The petrochemical industry, which uses natural gas not only for heat and power but also as a feedstock, “represents the single most important end-use sector for NGLS in North America, accounting for more than one-half of total demand for NGLS.”

Chemical manufacturers have already announced 50 new chemical projects to take advantage of new supplies of natural gas and expand their production. A recent ACC study found that the expected increase in natural gas production is not just revitalizing the chemical industry but could create 1.2 million new jobs across a broad sector of America’s manufacturing base.

Learn more about shale gas.

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