It is a story that bears repeating: The development of shale gas, coupled with an affordable abundance of natural gas and natural gas liquids, continues to stimulate incredible growth at the Port of Houston and elsewhere throughout Gulf Coast manufacturing facilities.
ExxonMobil Chemical Co. Senior Vice President of Global Operations Bruce March expects Texas particularly to be responsible for most of the growth in petrochemicals around the world for at least the coming five- or six-year period — growth that had previously come mainly from the Middle East.
“The growth that is being enabled by shale gas production in North America, particularly in the Texas area, gives us a very advantaged feedstock globally,” said March, addressing delegates attending the Gulf Coast Industry Forum presented by the Economic Alliance Houston Port Region held recently in Pasadena, Texas. “Regarding global petrochemical demands, it will be Texas and the United States that meet those needs for probably the next decade.
“This shale gas is a true game-changer. It is rejuvenating America’s petrochemical industry and benefitting all different aspects of manufacturing across the United States.”
New domestic supplies of natural gas and natural gas liquids have created a competitive advantage for U.S. manufacturers, March explained.
“That has led to greater investment and industry growth and — the most important thing — new jobs,” he said. “It is quite amazing to see the growth in U.S. petrochemical manufacturing. The state of Texas will soon be a much larger export hub for petrochemicals, and new production will be exported through the Port of Houston.”
March observed there are few business sectors in the world as optimistic about their future as the chemical industry.
“Over the next decade, ExxonMobil expects that global chemical demands are going to grow at about 4 percent a year,” he said. “That is a faster pace than energy demand and global economic growth.”
While most of the growth in chemicals production has occurred in Asia and the Middle East, not all places in the world are expected to grow at this very robust 4-percent per year rate.
“Almost all of the future growth will come from non-OECD (Organization for Economic Co-operation and Development) countries,” March said, adding about two-thirds of that growth will be centered in Asia.
The main factor driving the rise in increased chemical demands is population growth, March said.
“From now until the year 2040, the global population is expected to rise from a little over 7 billion people today to about 9 billion people,” he said. “But more important to the high growth of chemicals demands are what ExxonMobil calls the ‘mega-trends.’”
March identified the first mega-trend as urbanization.
“That is the movement of people from rural to urban settings,” he said. “When that occurs, it produces a net increase in households because typically city households have fewer people in them.”
More households translate to increased demand for energy and chemicals, March added.
The second mega-trend is rising incomes and a growing middle class.
“When people reach the middle class, their quality of life improves tremendously,” March explained. “That improvement in their living standards will drive a higher demand for products made from petrochemicals — everything from packaged goods to appliances to automobiles.”
The third mega-trend is sustainability.
“That is something in this industry that is important to all of us,” March said. “The chemical industry is not only essential to enabling human progress; it is also essential to reducing environmental impact to that human progress.”
March emphasized the importance of realizing growth is about more than gross domestic product statistics.
“This is about people improving their daily lives,” he said. “As it has played an important part in modern economies, energy and petrochemicals will play a big part in the developing world.”