HOUSTON—The U.S. petrochemicals market is riding four waves of investment thanks to the feedstock advantage provided by North American shale gas, according to a top executive at Dow Chemical Co.
“The investment surge could be much bigger than we expected it to be,” said Jim Fitterling, Dow's executive vice president of feedstocks, performance plastics and supply chain, at the IHS World Petrochemical Conference in Houston.
He added that there are at least 120 energy-related chemical expansions currently announced for the U.S., with more than $100 billion being invested. The four waves of investment cited by Fitterling were:
• Upstream oil and gas producers who “have jumped in with both feet.”
• Makers of products “close to the base,” such as chemicals and steel. “Their bet on the recovery is real and sustainable,” he said.
Ten new U.S. ethane crackers have been announced by petrochemical firms, including one by Dow in Freeport, Texas. Fitterling estimated that six of these eventually will be built, but he added that the scope of the announcements “is indicative of what they think of the investment thesis.” Dow's Freeport project will include a large amount of new polyethylene capacity.
• Downstream users—including plastics processors and makers of such products as computers, appliances and furniture. These expansions could create as many as 3 million new U.S. jobs, Fitterling said.
“This validates everything we've been trying to say about the potential of energy resources to recharge the U.S. economy,” he added. “It's coming and it's real and it will have an impact.”
• Knowledge-based R&D and technology centers. Dow is taking part in this trend by building a new R&D center that's set to open in Lake Jackson, Texas, in 2016. “These investments will be a huge jolt to R&D and will help us protect intellectual property,” Fitterling said.