Impact of Natural Gas and Natural Gas Liquids Supplies on the United States Chemical Manufacturing Industry: Production Cost Effects and Identification of Bottleneck Intermediates

Abstract

A model of the United States petrochemical industry was constructed to explore the chemical manufacturing supply chains that will be impacted by changes in the price and availability of natural gas and natural gas liquids. Production costs of intermediate and end products (polymers, fertilizers, etc.) are impacted, for example, as shale gas production provides expanded primary feedstocks to the chemical industry at a lower cost than petroleum processing. The predicted impact of changes in natural gas and natural gas liquids prices on the production cost and energy intensity of intermediate and final end products is reported. In moving from a 2012 base level group of processes to a variety of long-term projected configurations of chemical manufacturing, acetaldehyde is identified as a potential bottleneck intermediate. Predicted production cost changes in intermediates, such as butadiene, and end products, such as polystyrene, are explored.