America’s shale boom is boosting our petrochemicals industry, and that boost is coming at the expense of European firms. Natural gas liquids are used as a feedstock for many chemicals, and thanks to fracking, the US is flush with the stuff. The FT reports:
European petrochemical makers risk being squeezed between low-cost producers in the Middle East and a resurgent chemicals industry in the US, where feedstock and energy prices have plummeted following shale gas discoveries.After a decade of almost zero capacity expansion in US petrochemicals, shale gas has prompted the likes of Dow Chemical, LyondellBasell, Chevron Phillips and ExxonMobil Chemical to invest billions of dollars in ethane cracker capacity on the US Gulf Coast.
Of course, it’s not just the petrochemical industry that’s finding market conditions more favorable in the US. A combination of expensive green policy missteps and a hesitance to explore its own shale reserves have sent Europe’s electricity prices spiraling upward in recent years. That’s hurting households and businesses alike, and has many European companies eying the greener grass of shale-rich America.This shift in the global petrochemicals industry is just one of many knock-on effects of America’s success in fracking. The United States’ economic position, especially relative to Europe’s, has strengthened significantly thanks to the shale boom.