Natural gas itself is a feedstock for production of methanol but little else. The petrochemical industry gets much of its feedstock from the ethane, propane and natural-gas liquids (NGL), which are stripped from "wet" gas, usually near the wellhead. These are heated and cracked to produce ethylene and other distillates that are the building blocks of plastics and the products derived from plastics.
"We're seeing a lot of activity in gas processing—separating liquids and gas," says Moreno. "Of all the markets that are strong now, that's probably the strongest." The midstream market—pipelines, storage and compression stations—also is strong, he adds.
Downstream is where the really large projects are. In April 2011, Dow Chemical Co., Midland, Mich., announced plans, with a $4-billion investment, to increase the company's ethylene and propylene production and integrate its U.S. operations with feedstocks from shale gas and NGL. Dow projectsinclude ethylene crackers in Louisiana and Texas and at least one propylene plant in Texas.
Chevron Phillips Chemical Co., ExxonMobil and other chemical manufacturers also are planning major projects. Thumb of Energy Ventures Analysis knows of 18 petrochemical projects being planned today, mostly on the U.S. Gulf Coast. Gary Donovan, Fluor vice president of sales for North American energy and chemicals, says $14 billion in projects related to the gas industry are in the FEED stage.
Far from the Gulf Coast, the Marcellus shale formation, which underlies five U.S. eastern states and is the largest source of unconventional gas, is becoming a new regional hub of plant and infrastructure investment. Aither Chemicals LLC, Charleston, W.Va., is trying to develop a $300-million ethane cracker in Institute, W.Va., and Shell Chemical LP is evaluating a site near Monaca, Pa., for construction of a world-scale petrochemical complex to upgrade locally produced ethane from shale-gas production.
If these and other proposed projects take root in Appalachia, they will compete with coal for labor, land and energy market share, bolstering the assessment of shale gas as a game changer for the energy industry.