NPRA: Long-Term Growth Prospects Remain Intact
April 3, 2009 - San Antonio, TX
From Chemical Week, April 3, 2009
by Lindsey Bewley and Robert Westervelt
The economic downturn’s duration and severity are not clear, but the petrochemical industry’s long-term growth prospects remain intact, leading industry executives told attendees at a Chemical Heritage Foundation and National Petrochemical and Refiners Association (NPRA; Washington) symposium, held last week at NPRA’s International Petrochemical Conference in San Antonio, TX. “It is my belief that the chemical industry will snap back faster and more sharply than most believe,” Nova Chemicals CEO Jeffrey Lipton, told attendees.
Nova customers are so far this year consuming, but not yet purchasing, polyethylene (PE) at roughly the same rate as they were in 2008, Lipton says. However, current North American inventory levels are down about 5.5 billion lbs versus the average levels of 2006 and 2007, ACC data shows.
Another “golden era” could be ahead for North American petchem makers as natural gas liquid (NGL) feedstocks are again settling into a competitive position relative to heavier petchem feeds such as naphtha, Lipton says. Limits on NGL supply in the Mideast and global competition for naphtha as both a fuel and feedstock put North America back in a strong competitive position as advances in drilling technology and new reserves expand natural gas supply, he says. “I believe facility growth will move away from developing-world consumption points” where naphtha is used, he adds. “Drilling technology and North America’s geology are going to shift the global petrochemical industry back to where we left it a decade ago.”
The long-term outlook for the industry remains strong “because of the essential and critical role chemicals play in developing our society,” says Bruce Macklin, senior v.p./global operations at ExxonMobil Chemical. “Demand for chemicals is increasing because every society wants the benefits they can deliver,” Macklin says. Companies have a responsibility to meet the needs of the present without compromising the ability of future generations to meet their own needs through sustainable development, he says. “Sustainable development is balancing three things—economic growth, focused development, and environmental protection,” he adds...
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