Geology Reference
In-Depth Information
By the fall of 2012, however, natural gas prices had fallen dramatically, to about
$4 per thousand cubic feet, and chemical industry employment figures nudged up
for the first time in a decade, according to the Bureau of Labor Statistics. Dow
Chemical restarted its plant in St. Charles, Louisiana, and planned to build a new
complex in Freeport, Texas.
That same year, Methanex Corporation, the world's largest methanol produ-
cer—which had closed its last US chemical plant in 1999—paid over $500 million
to disassemble a methanol plant in Chile and move it to Ascension Parish in Louisi-
ana. “The proliferation of shale gas in North America … underpins the very at-
tractive economics for this project,” observed CEO Bruce Aitken. If gas prices re-
main steady, he added, the Chilean plant will be paid off by 2016, and the company
might move a second plant from Chile to Louisiana.
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Similarly, the Williams petrochemical company was spurred by low gas prices
to invest $400 million in expanding an ethylene plant. And CF Industries an-
nounced a $2.1 billion expansion of a nitrogen fertilizer plant. Gas prices account
for 70 percent of its manufacturing costs at its ammonia and urea units (urea is
the company is betting it can successfully compete against imported nitrogen fer-
tilizers, which represent over half of sales in the United States.
This kind of growth is already having a beneficial impact on numerous industries
associated with energy, from trucking to high tech, glass, sand, steel, and even
plastic toys.
U.S. Steel, for instance, has struggled in recent decades, undercut by Asian pro-
ducers and unable to respond creatively, and saw its stock price drop nearly 90
percent. But today it is in the midst of a Phoenix-like resurrection. Hydrofrack-
ing requires lots of steel products, from pipelines to drilling rigs and well casings,
and U.S. Steel recently invested $100 million on a facility to produce “tubular
product” specifically for the hydrofracking industry. The company may see even
bigger gains in coming years, as the shift from coal to cheaper natural gas reduces
its energy costs. In 2011, U.S. Steel used 100 billion cubic feet of natural gas: every
time the price dropped a dollar, the company saved $100 million. In a further cost-
saving measure, the company is retooling its blast furnaces to reduce the amount of
coke (a fuel derived from coal) used, and increase the amount of natural gas it can
