Unlikely That the Northeast Will Replace Texas As a Polyethylene Source

EIN News says, "Natural Gas Discoveries Mean Growth Ahead in the Northeast Cheap and abundant natural gas has revitalized the Gulf Coast's petrochemical industry, after demand for its plastic products took a beating in the recession. But some of the chemical comeback isn't coming back to Texas. Discussions about the industry's growth are increasingly focused a thousand miles northeast, in the booming Marcellus Shale region. The natural gas cocktail buried in that Appalachian rock is rich in ethane, the raw material used to create the ethylene that produces many types of plastics. While the Eagle Ford Shale in South Texas offers the same bounty, some industry analysts say the Northeast holds a strategic advantage in its proximity to manufacturers who mold plastic consumer goods. (chron.com)".


That's good news on availability of natural gas from Marcella Shale in the Northeast, but will it come to development? We will grant that there is a market for polyethylene consumer-products from many Northeast molders, but there can always to be a "slip twixt the cup and the lip".

The other favorable aspect is that the Marcella Shale gas as a higher ethane content, which is amenable to cracking to produce ethylene. However, one needs to first separate the ethane from the methane. That takes equipment. Then we need to crack it to ethylene. More equipment. Then we need to polymerize it to polyethylene chips to supply the molders. More equipment. This equipment is not presently available in the Northeast. It is available in Texas in the Houston area. We call it a petrochemical complex. The molding granules are easily shipped by rail car to the Northeast plastic molders, and anywhere else in the US where there are plastic molders.

Could equipment be installed in the Northeast to do the same job that is being done now in Texas. Yes, if could, but why build more than one needs? In addition, there is a high concentration of environmentalists in the Northeast. They will do their best to stop construction of any major petrochemical complex. They will also have the support of the present Federal Administration, which has demonstrated antagonism to the development of any new energy sources, unless it's wind and solar. With pressure from subversive environmental organizations, the Department of the Interior (Salazar) will stall the development of this newly discovered natural resource.