IHS WPC 2014: US exports of key petrochemicals could double by 2025, ExxonMobil says

20:14 PM | March 27, 2014 | Robert Westervelt

US exports of polyethylene (PE), polypropylene, and para-xylene, three of the largest primary petrochemical products, could double by 2025 thanks to shale gas, ExxonMobil Chemical president Stephen Pryor told attendees in the keynote address at the IHS Chemical World Petrochemical Conference at Houston on Wednesday.

The US export increase reflects rapid globalization of chemical markets, Pryor says. “Ten years ago, the volume of chemicals traded between regions equaled about 5% of global production capacity,” he says. “Today, it has grown to about 10% and, by 2020, will be approaching 20%. This globalization comes at an opportune time for the United States, which is emerging as a significant net exporter of chemicals.”

Global demand for ethylene will grow by 150% from 2010–40, driven by rising prosperity and an expanding middle class in the developing world, Pryor says. “The United States can help meet global chemical demand thanks to shale energy and, in doing so, strengthen the economic prospects of our own middle class,” Pryor adds.

US investments include ExxonMobil's planned multibillion-dollar expansion of its Baytown, TX, complex, featuring a cracker that will produce 1.5-million m.t./year of ethylene. The company also plans related PE investments at its nearby Mont Belvieu, TX, site. “ExxonMobil was an early mover in response to the shale opportunity, and our start-up at Baytown is planned for 2017,” Pryor says. ExxonMobil has received required permits for the PE units at Mont Belvieu. EPA has approved permits for the Baytown cracker, but the Sierra Club has appealed the decision. ExxonMobil has requested an expedited review of the appeal and expects final approvals soon.

“While recognizing that not all announced capacity gets built, what we are seeing is a recapitalization of the US chemical industry,” Pryor says. “After three decades in which 75% of chemical capacity growth came from Asia and the Middle East, the United States is back in the game as a low-cost supplier of petrochemicals.”

One challenge to the buildup is a growing shortage of skilled labor, Pryor notes. “One manifestation of this shortage is a record escalation in US construction costs,” he says. “For example, the cost to build a chemical plant in the US Gulf Coast has nearly doubled over the past 10 years.”

Pryor notes that even with 18 million Americans out of work or underemployed, the National Association of Manufacturers reports that two-thirds of US manufacturers are experiencing moderate to severe worker shortages, with up to 600,000 jobs going unfilled.

“Skilled jobs like instrument technicians and machinists don’t require a four-year degree in most cases, but they do require math and science skills,” Pryor says. “That's why ExxonMobil recently partnered with nine Houston-area community colleges in a new program to expand vocational training.” The program will prepare high school graduates and returning military veterans for skilled jobs in the Texas chemical industry, where the average salary has risen to nearly $100,000/year, he adds.