The shale boom, in other words, has been a game-changer for the plastics industry. Just a few years ago, domestic gas prices were so high that U.S. companies were struggling to compete against producers in Asia and the Middle East, and were shutting down or shrinking their plants. Nowadays the United States is one of the cheapest places in the world to make plastic, according to Joseph Chang, global editor of ICIS Chemical Business. The petrochemical industry is ecstatic.
“This is the first time in more than a decade we’ve been able to talk about building facilities [and] increasing capacity,” says Steve Russell, vice president of the plastics department of the American Chemistry Council, which represents many of the world’s biggest producers of raw plastics and recently produced a report analyzing the impact of the shale gas boom. To date, companies under its aegis have announced plans to spend more than $100 billion by 2020 to build new facilities or expand existing ones.
Most of the proposed projects are focused on extracting ethylene from the ethane contained in natural gas. Ethylene is one of the most widely used chemicals in the world—a key raw material for ammonia, antifreeze, vinyl, and rubber. But more than anything else it’s used to make polyethylene: the plastic found in toys and diapers, plastic bags and bubble wrap, milk jugs and squeeze bottles. It’s the chief plastic found in most consumer packaging. Not surprisingly, it’s also the type of plastic most often found floating in ocean garbage patches, thousands of miles from land.
It takes gigantic furnaces known as crackers to break down ethane molecules into ethylene. The last time a new cracker was built in the U.S. was 2001. Now at least ten new crackers are slated for construction over the next several years—including a $6 billion plant that Chevron Phillips began building in Baytown, Texas, earlier this month. The building boom extends from the industry’s traditional home, along Texas’s and Louisiana’s Gulf coast, to parts of Appalachia and western Pennsylvania that sit atop the ethane-rich Marcellus Shale. Royal Dutch Shell, just to cite one example, has proposed locating an ethane cracker in Monaca, Pennsylvania, not far from Pittsburgh.