The first time Plastics News mentioned the term “shale gas” was just about three years ago, in April 2009.
At the time, there was no hint of the significance.
Then the energy industry started to tap deposits in the Marcellus Shale Formation in New York, Pennsylvania and Ohio, and U.S. natural gas reserves increased almost 30 percent in just three years.
Now it's clear that the potential influence of shale gas on the North American plastics industry is amazing.
The full impact hasn't been felt yet. But if you've been paying attention, you can see it on the horizon.
Dow Chemical Co., Formosa Plastics Corp. USA and Chevron Phillips Chemical Co. LP already have announced North American expansion plans. ExxonMobil Corp. joined the party June 1, when it disclosed it is considering building two new polyethylene lines in Mont Belvieu, Texas, as well as a new ethane cracker in Baytown, Texas.
ExxonMobil's new PE lines alone will have combined annual capacity of almost 3 billion pounds.
Just five years ago, experts were predicting that North America was destined to be a net importer of PE. Resin manufacturers were chasing low-cost feedstocks in the Middle East and growing markets in Asia. No one was building new capacity in North America.
Now economists talk about how low-cost North American resin could help the economy, including plastics processors.
At a recent conference in Cleveland, Jim Meil, chief economist with Eaton Corp., predicted that using natural gas feedstocks, along with rising costs in China and supply-chain issues, could be enough to dictate more widespread reshoring of manufacturing to North American suppliers.
Will shale gas save the North American plastics industry? Probably, but first the chemical industry will have to avoid some potential roadblocks.
Some citizens are worried about the environmental impact of hydraulic fracturing. Among the concerns are what fracking will mean to clean water supplies.
The Sierra Club has weighed in, with President Robin Mann saying that fossil fuels including natural gas “have no part in America's energy future.” The group believes low-cost natural gas presents a threat to “clean energy” including wind and solar power.
In this election year, you'd think the pros and cons of fracking and shale gas would be front and center in the national debate.
But the North American economy has too much riding on the success of shale gas for anyone to take a serious stand against it.
At this point, it seems politically dangerous to even express concern about the environmental drawbacks of fracking. No one wants to put a harness on the goose that's laying the golden eggs.
The bottom line is the winner this year, because North American manufacturers have a lot riding on shale gas. It looks like the plastics industry will be a big beneficiary.