Video: Lyn Tattum Discusses Shale Gas

Shale gas is becoming an important raw material source for the chemical industry as firms in the U.S. invest in these previously untapped resources. The revolution in the supply of feedstocks in North America is the most important development of industry's modern area, according to Dow Chemical CEO Andrew Liveris.

In the U.S., shale gas is “already flowing and available, investments have been made, and ethane is coming on tap, particularly around the Gulf Coast,” Tattum says. There is an expanding infrastructure and pipeline network able to bring the gas from its source directly to petrochemical companies. Due to these new resources, there has been a rush of petchem project announcements in the past year in North America. ExxonMobil Chemical earlier this month became the latest company to announce plans to build a U.S. cracker, citing the low cost feedstocks due to shale. Other producers who have announced new worldscale crackers include Chevron Phillips Chemical, Dow Chemical, Formosa, Ineos, and Shell Chemical. Many of the projects will not be onstream until 2016 or later, Tattum says.

Companies nevertheless remain cautious about the availability of the gas. There is some uncertainty about geological structures in the U.S., Tattum says. And heavy production of gas could create a surplus that needs to be exported.

Tattum says companies believe there needs to be a policy in place to make gas available at the right price, although overall the benefits of these new resources outweigh the potential setbacks.