#1 most loved electric vehicle, solar, & battery news & analysis site in the world. Support our work today!


Green Economy plastic petrochemicals Appalachia shale gas

Published on May 2nd, 2020 | by Tina Casey

0

In Midst Of Natural Gas Glut, Plastic Industry Bent, Not Broken (Yet)

May 2nd, 2020 by  


With energy demand dropping like a hot potato on the heels of the COVID-19 crisis, everyone is talking about the oil glut. People are starting to talk about the natural gas glut, too. That’s an interesting twist, considering that gas stakeholders have been expanding their petrochemical operations, anticipating an increase in the demand for plastic. However, it seems that the plastic hedge is also beginning to come apart at the seams — and not just because of the virus.

plastic petrochemicals Appalachia shale gas

The plastic industry is feeling COVID-19 heat as plans for an Appalachian ethane hub stall (screenshot via US DOE).

Dark Skies Over Appalachia Plastic Hub

Take a look at the situation in Appalachia, for example. All things being equal, Appalachia is an ideal spot for establishing a a string of new petrochemical plants featuring ethane crackers, which produce the building blocks for the plastic industry. As an epicenter of the US fracking boom, the region is awash in gas.

The US Department of Energy has been all over the idea. Ironically enough, the new petrochemical hub was to be built partly on the bones of the region’s dying coal industry.

Some of the work is already under way, but in recent months the clouds have been rolling in. Last March our friends over at the Institute for Energy Economics and Financial Analysis took a deep dive into the plans for a petrochemical buildout in the region, and came up with this observation:

“The petrochemical buildout in the United States has oversupplied the market. Operating rates of cracker plants and plastics manufacturer margins placed downward pressure on operating rates and expected sales prices and margins. Most are expected to decline in the United States and around the world. The supply/demand imbalances are likely to last through 2026.”

New Petrochemical Plant Up In The Air

The victim could be a massive new $5.7 billion petrochemical facility planned for Belmont County in Ohio, which appears to have hit the rocks after a period of site prep. The plant is a project of PTT Global Chemical of Thailand, in partnership with South Korea’s Daelim Chemical.

According to IEEFA, Moody’s has soured on the project. Adding more fuel to the petrochemical dumpster fire, the firm IHS Markit has also reportedly given it the thumbs down.  Interesting! According to IEEFA, the same firm once projected that the new plastic hub could support five new petrochemical facilities.

As of this writing, our friends over at Shale Daily are reporting that PTT and Daelim had previously set an end-of-June date for deciding whether or not to move forward. That ball of wax now seems to be up in the air, and the drop-dead date is now indefinite.

Shale Daily cites a company spokesperson who stated that “we are unable to promise a firm timeline for a final investment decision.”

Yikes!

More Trouble In Plastic Land

The partners may also be looking at the big picture. Royal Dutch Shell already has the jump on building a petrochemical complex of its own in nearby western Pennsylvania. That work has stalled on account of the state’s stay-at-home order, but it hasn’t ground to a halt, and hundreds of workers returned to the site last month.

So far Shell is indicating that it will finish construction when Pennsylvania eases its stay-at-home order, leaving the Ohio project behind in the dust.

That’s quite a conflict with Shell’s big plans for decarbonizing, but then again, other developments signal a long term bending of the line from fossil gas to plastic to waste.

For example, last November Shell announced a technology breakthrough in plastic waste recycling, leading to the prospect for reducing the share of virgin oil and gas in petrochemical production.

Other recent breakthroughs on the waste-to-chemical side include a new fungus-based recycling process.

Another area of competition is the green chemistry field. A major driver of that trend is the auto industry, where companies like Ford and GM are on the hunt for sustainable alternatives to fossil-sourced plastic and other petrochemical products.

Then there’s the thing about demographic shift. The millennial generation may be losing interest in recycling compared to the previous generation, as some research suggests, but they are paying more attention to reusing,  reclaiming, and using less. Japan’s Kao cottoned onto the consumer waste reduction idea years ago, and other companies are jumping on the reusable container train.

That leads to the whole brand reputation field. Millions of tons of plastic waste are already crammed into the ocean with no signs of let-up, and that has caught the eye of the public. Companies that help retrieve and recycle plastic waste are already leveraging those efforts in branding and advertising.

The COVID-19 crisis may have temporarily breathed new life into the single-use plastic sector, but it has also sharpened the eye of consumers on the hunt for a more safe and healthy environment. In the race to rise from the ashes of the virus, manufacturers with sustainable plans for plastic will have a head start.

Follow me on Twitter.

Image (screenshot, cropped): Ethane hub, US Department of Energy. 
 
Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica member, supporter, or ambassador — or a Patreon.

Have a tip for CleanTechnica? Send us an email: tips@cleantechnica.com
 
 


 

Latest Cleantech Talk Episodes


Latest CleanTechnica.TV Episode


Tags: , , , , , ,


About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.



Back to Top ↑