Penn State Natural Gas Utilization Workshop Discussion
Posted: July 8, 2012
Industrial development is based on cheap and abundant energy. The industrial sector consumes about 50% of the world’s total delivered energy, with about two-thirds of this energy coming from liquid fuels and natural gas.
The top three energy-intensive industry sectors using 43% of all industry energy are:
Chemical (including fertilizer) – 22%
Iron and steel manufacturing – 15%
Nonmetallic minerals production (including cement) – 6%
Energy resources are used for both energy and feedstock in chemical and iron and steel manufacturing. Reports from the US Energy Information Administration indicate that with an increasing supply of natural gas and even a temporary lag in demand, there will be a corresponding need for new markets to help stabilize the price and provide a profitable removal of shale gas. Natural gas prices in the US are not as volatile as crude oil prices, thus, unless North America becomes a large gas exporter, we won’t see geopolitical influences on natural gas prices. This would be particularly important in the chemical industry, where natural gas is a feedstock as well as an energy source.
In wet natural gas areas, the natural gas liquids (NGLs) need to be stripped out of shale gas and can be used as feedstock for other products. Book reserves of NGLs have grown so the US is a net exporter of NGLs and propane, and this will likely continue until additional domestic capacity to use the products are built. Siting new facilities where fuel and feedstock are available will be important, as well as where labor, infrastructure, transportation costs, and proximity to markets are important. Determining critical pipelines to be developed in the northeast to maximize gas production and shipment to end use markets is very important. Workforce needs can change with what opportunities are made available.
Further information on the workshop regarding industrial use can be found at http://www.research.psu.edu/events/expired-events/naturalgas/working-groups/industrial-uses