The U.S. domestic natural gas production has experienced an unprecedented increase during the past 10 years. This was mainly attributable to ongoing advancements in drilling and producing technologies, such as hydraulic fracturing and horizontal drilling, coupled with access to prolific shale plays. In just a decade, production grew to more than 26.4 tcf (trillion cubic feet) in 2016 from 18.5 tcf in 2006, a growth of about 42 per cent (figures from the Energy Information Administration [EIA], U.S. Dry Natural Gas Production, May 31, 2017 and its November 2016 Short Term Energy Outlook).
Natural gas is mostly methane (70 to 90 per cent) and contains hydrocarbons (remaining 10 to 30 per cent) – ethane, propane, butane, isobutane, and pentane. These are removed in gas processing plants and refineries as the condensate and liquids are removed from the vaporous natural gas stream.
It should come as no surprise that natural gas and liquids production increased about 100 per cent in the same decade (2006-2016), from 634 million barrels to 1.27 billion barrels (figures from EIA U.S. NGL Liquids Production, n.d.). This has been a boon to the American petrochemical and manufacturing industries, as well as benefiting consumers.
Ethane, propane, butane, isobutane, and pentane have been underappreciated yet play an essential role serving as feedstocks for thousands of consumer goods – from a pair of track shoes likely contains at least three different NGL-derived petrochemicals. According to Running Shoes: How Products Are Made, the outer sole and the mid-sole are probably made from durable polyurethane foam, which comes from petrochemical propylene. The insole is usually made from ethylene vinyl acetate, a derivative of petrochemical ethylene. The exterior top and sides are often made from nylon (a derivative of petrochemical benzene).
The process of separating the various NGLs is called fractionation, says the Natural Gas Association’s Processing Natural Gas. This is when each molecule – ethane, propane, butane, isobutane, and pentane – goes through multiple fractionators, each with a different boiling point to remove a different hydrocarbon at each step. They start with the lightest molecules, typically ethane first, then propane, butane, and isobutane, as the heavier ones.
According to the EIA paper, entitled Data: Natural Gas Field Production (published January 2017), of the approximately 1.2 million barrels of NGLs the U.S. produced in 2015, about 34 per cent was propane, 34 per cent ethane, 13 per cent pentane, 10 per cent butane, and the rest isobutane.
The EIA’s paper, Today in Energy: What are Natural Gas Liquids and How are They Used? (published April 2012), says NGLs are necessary for many purposes in almost every sector of the American economy:
• Ethane – production of ethylene, which the raw ingredient of plastics;
• Propane – mostly used in heating and as a petrochemical feedstock;
• Butane and isobutane – typically blended into petroleum products to create various fuels;
• Propylene and its derivatives – used for injection-molded plastics, fiberglass, and disposable diapers;
• Benzene and its derivatives – make styrene and polystyrene plastics to create phenol (used in pharmaceuticals such as aspirin, detergents, and pesticides;)
• Methanol and its derivatives – make wood alcohol and using in making gasoline additives, insulation, latex paint and particle board; and
• Butadiene and its derivatives – make articial rubber for tires, hoses, conveyor bels, and shoes.
The American Fuel & Petrochemical Manufacturers Association estimates that feedstocks account for 60 to 70 per cent of the total cost of petrochemicals. “Even a small drop of these feedstocks is a major benefit to U.S. manufacturers,” it says. “Since natural gas prices in the U.S. fell by 75 per cent (between 2005 and 2013), while remaining flat or rising at most in the rest of the world, American chemical manufacturers that use natural gas as a feedstock or energy source have seen a major competitive advantage compared to other parts of the world.”
U.S. petrochemical manufacturers have naturally expanded their businesses, upgrading and building new facilities (up 12 per cent in 2014 and 18 per cent in 2015). The American Chemistry Council expects this to continue, as it noted in its paper, U.S. Chemical Investment Linked to Shale Gas: $164.0 Billion and Counting (published 2016).
Since American is unable to use all the NGLs it processes, more are being shipped abroad – some by pipeline to Canada and the rest using NGL tankers abroad. The EIA reports the U.S. capacity to ship propane and butane abroad is projected to increase by more than 550 per cent – from 0.2 million bbls/day in 2013 to 1.32 million bbl/d by year-end 2017.
The United States has benefited from its increased shale production. Consumers have paid less for home heating and electricity, power plants have reduced emissions, and there’s been a dramatic reduction in the country’s reliance on foreign countries for energy.
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