The U.S.—and the Gulf Coast in particular—is due for another, albeit smaller, round of petrochemical expansions, experts tell 10/12 Industry Report in its new quarterly issue.
On the chemical side alone, about $185 billion in chemical manufacturing investment is either under construction or planned nationwide.
The U.S. is poised to become the most competitive global manufacturer of chemicals, said Cal Dooley, American Chemistry Council president and CEO, speaking at the Downstream Engineering, Construction & Maintenance Conference in New Orleans this summer.
“Fifteen years ago, we were one of the highest cost manufacturers in chemicals. Today, the U.S. is arguably one of the most competitive global manufacturers of chemicals, and it’s all because of hydraulic fracturing and the low cost of natural gas,” he said.
When the oil-to-gas price ratio is above 7, U.S. competitiveness is enhanced. While good for chemicals, it also positively impacts Louisiana’s natural gas market as it becomes the fuel of choice. Some owners feel this will contribute to the state becoming a major liquefied natural gas hub by 2020. More than $88 billion in LNG projects are currently planned, being built or in operation across the U.S.
Owners, designers and contractors along the Gulf Coast should prepare now, rather than later, for the potential of labor shortages and productivity woes should a second wave become reality, industry leaders say.
“We don’t think the second wave is going to be as large as the first,” says Manav Lahoti, commercial director for The Dow Chemical Company’s U.S. olefins market in Houston. “We think the second wave, for us at least, needs to be smaller. It will allow us to leverage some of the skills and lessons learned from the first wave. We feel productivity will be better as a result.”
Read the full story, and check out the third quarter issue of 10/12 Industry Report below. Be sure to sign up for a free subscription of the quarterly publication. Send your feedback, story ideas and company news to editor@1012industryreport.com.
