...Until 2005, shale deposits—which lie beneath a wide swath of the country—were an eccentric source of natural gas. That was about the time that exploration companies perfected horizontal drilling and hydraulic fracturing techniques to liberate gas that was tightly locked into shale. Shale has since become the source of more than one-quarter of the natural gas produced in the U.S.
The new output has driven U.S. natural gas prices below $3.00 per million Btu for the first time in more than a decade. At more than $100 per barrel, oil is more than five times as expensive as natural gas on an energy content basis.
The main feedstock for North American petrochemical facilities is natural gas liquids, a mixture of ethane, propane, butane, and other hydrocarbons that is extracted from natural gas and then usually separated into its components. The remaining “dry” natural gas, primarily methane, is then piped to the industrial and home heating market. Cheap natural gas liquids put U.S. producers at a big advantage over European and Asian chemical producers that primarily use petroleum-derived feedstocks such as naphtha.
This advantage of natural gas liquids over naphtha is enormous. According to Carlo Barrasa, director of natural gas liquids and cracker economics at the consulting group IHS Chemical, the cash cost of making ethylene from ethane is 18 cents per lb. The cash cost of using light naphtha as a feedstock, in contrast, is about 46.5 cents per lb. Ethylene sells for about 68.5 cents per lb, IHS says.I'm not a petrochemicals guy, so I approach this subject with a great deal of humility. It seems to me that the shale gas boom will last as long as the shale gas keeps coming and as long as the natural gas producers can keep using whatever techniques they're using to get at that gas (i.e. hydraulic fracturing, etc.) It will be incumbent on them to be smart about their public relations regarding the water table pollution problems that seem to come with the technique (or to innovate better techniques in general.)
Also, I'm terribly curious as to the new chemistry jobs that must be cropping up around shale gas. Doubtless there are chemists needed to formulate the fracturing fluids, track the water purity and help run the ethane cracking plants. Here's hoping there are plenty of jobs for them all.