Shale development could encourage growth in U.S. chemical companies

A June 16, 2011 article in Reuters recognizes the benefits that increased development in the Marcellus and Utica shale could have on the U.S. chemical industry.  The article notes that the low natural gas prices are giving U.S. chemical companies (e.g. Shell, Dow Chemicals and LyondellBasell) a competitive advantage over their international counterparts.  One of the primary reasons for the cost competitiveness is the increased production of ethane.   Ethane is a hydrocarbon derived from shale gas through a process known as “cracking,” or separating natural gas into its various components.  The ethane is then used as a raw material or feedstock to produce ethylene, which the article describes as the "most basic of commodity chemicals" that is "found in plastic, paint, glue and thousands of other products."  For more information on the potential benefits of increased shale production, take a look at the American Chemistry Council.

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