The Plastics Blog
By Don Loepp | About The Plastics Blog

How many crackers will the shale revolution really spawn?

By Don Loepp | March 18, 2014 04:01 pm ET

Image By: Caroline SeidelLoepp

For the past few years, we've been reporting on all the new ethylene crackers that have been proposed to take advantage of the U.S. shale gas revolution. You know, the one that's supposed to bring stability (and maybe even lower prices — although that's a controversial topic) to the polyethylene market?

But what's often underemphasized in all the of new-cracker hype is the fact that some of these projects will never happen. Many companies can issue press releases about big petrochemical projects, but not everyone will follow through.

Which projects are pie-in-the-sky, and which ones will actually start cracking out ethylene in the next few years? For guidance, check out Alex Tullo's post yesterday in The Chemical Notebook blog, titled "The U.S. Cracker Leader Board."

Tullo ranks 10 major cracker projects in order, starting with Chevron Phillips' cracker in Baytown, Texas, and its PE plants in Sweeny, Texas ("Probability: nearly 100 percent. Only meteors or aliens could stop this one.")

Of the 10, Tullo gives four of them a probability of 80 percent or more of happening. Three more are above 50 percent. So that's not bad — a better than 50/50 chance that we'll have seven companies moving ahead with big new cracker projects.

Tullo isn't sold on new crackers in the Midwest, which have gotten a lot of press in Pennsylvania, Ohio and West Virginia. When the projects were announced, the thinking was that they could work because of the combination of ample supplies of low-cost natural gas and large numbers of plastics processors in the region.

But Tullo guesstimates that Shell only has a 30 percent chance of building an ethylene cracker and PE plant in Monaco, Pa. ("This project is not on the Gulf Coast, so lack of connectivity with the rest of the chemical world is a big disadvantage.") And Odebrecht's plans for a cracker and PE plant in Parkersburg, W.Va., is just behind that, at 29 percent. ("Just slightly less likely than the Shell project.")

Interesting analysis, and a good reminder that there are still plenty of questions to be answered as we enter the shale era.


Recent Blog Posts

How's the media treating plastics these days?   August 27, 2014 10:49 am ET
A peek behind our 2014 ranking of rotational molders   August 25, 2014 2:00 pm ET
More reshoring success stories with Wal-Mart connections   August 21, 2014 6:11 pm ET
Small country introducing plastic coins   August 20, 2014 10:48 am ET
Plastics company CEO speaks out on immigration reform   August 11, 2014 12:15 pm ET
Toyota cutting its fabled 'andon' cord   August 6, 2014 10:04 am ET

Comments

How many crackers will the shale revolution really spawn?

By Don Loepp

Published: March 18, 2014 4:01 pm ET
Updated: March 18, 2014 4:56 pm ET

Post Your Comments


Back to story

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events