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Projected bulk chemicals output varies across alternative energy price scenarios

Hydrocarbon Engineering,

US Energy Information Administration (EIA) analysis suggests that project bulk chemicals production is sensitive to alternative assumptions regarding long term oil prices and domestic oil and natural gas resources.

Sensitivity reflects price changes for natural gas and hydrocarbon gas liquids (HGL), which bulk chemical producers use for heat, power and feedstock. Changes in prices also affect the bulk chemical industry because the industry’s international competitiveness relies on the price ratio of oil based feedstock to natural gas based feedstock.

Research conducted by the Commerce Department’s Bureau of Economic Analysis highlights that trade and consumer spending are the economic expenditure categories that are the most influential. Energy prices affect all economic expenditure categories, which in turn affect the entire industrial sector.

Bulk chemicals are specifically affected by natural gas prices due to the fact that it is a natural gas intensive industry. Bulk chemicals also show the largest output changes when natural gas prices change. 

Adapted from a press release by Emma McAleavey.

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