Ethylene Production – A Tale of Explosive Growth and Air Quality Compliance

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Courtesy of Courtesy of All4 Inc.

ALL4’s Oil and Gas Sector Initiative was conceived in response to the renewal of the domestic oil and gas industry, associated primarily with the use of hydraulic fracturing (or fracking) and horizontal drilling in shale formations (e.g., Marcellus, Haynesville, Bakken, Eagle Ford) and the impact of greatly expanded oil and gas production on gathering/midstream operations, gas transmission/distribution systems, and domestic oil refining operations. With the United States now the largest producer of natural gas in the world , it is logical that the availability of natural gas liquids (NGL) associated with the processing of all of that natural gas is very high. The extraction of ethane, an NGL, from natural gas creates a feedstock for the production of ethylene (or ethene), which is the world’s highest volume produced chemical and the basis for bottles, toys, clothes, windows, pipes, carpet, tires, and many other products. In the U.S., it currently costs about $300 to make one (1) ton of ethylene, down steeply from $1,000 only a few years ago.

According to an analysis by PricewaterhouseCoopers, it currently costs $1,717 to make ethylene in Asia, where plants depend on high-priced oil instead of natural gas, and $455 per ton to make ethylene in Saudi Arabia, using a combination of ethane and butane. Ethylene plants are also being built in Qatar, which, like the U.S., has an abundance of low cost natural gas. The U.S. Energy Information Administration (U.S. EIA) states that current expansion projects at existing facilities will increase U.S. ethylene production by 40% by 2018.

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