Feedstock And Fuel

A report from the Massachusetts Institute of Technology offers positive news to the chemical industry: The U.S. has an abundant supply of natural gas that can be developed at low cost—equal to 92 years at the current domestic consumption rates. Natural gas is a key feedstock for chemical producers.

But the interim report, which was released on June 25, also comes to a conclusion that the chemical industry may not like: Demands for that resource as a fuel are likely to grow substantially.

If required to reduce greenhouse gas emissions, U.S. electricity producers will increasingly rely on natural gas through mid-century, the report predicts. Electric utilities would replace inefficient coal-fired plants with combined-cycle natural gas facilities, the report says. When burned in a power plant, natural gas produces less carbon dioxide per unit of energy than does coal.

For example, CO₂ emissions from power production in a region in Texas could be reduced by as much as 22% with no additional capital investment and without impacting system reliability by favoring natural gas combined-cycle units over coal generation.

Any future expansion of the U.S. chemical production capacity due to the availability of reasonably priced natural gas will likely serve the domestic market rather than boost exports, the report adds. That's because as production has built up offshore over the past two decades, U.S. exports of basic petrochemicals have fallen.

The MIT interdisciplinary team that produced the report studied domestic natural gas reserves and the potential of the fuel to help curb greenhouse gas emissions. Natural gas producers provided part of the funding for the two-year study.