By Joe Carroll
Dec. 27 (Bloomberg) — A surge in U.S. natural-gas production from shale rock is spurring states to compete for companies to produce chemicals from the fuel, the Wall Street Journal reported.
Pennsylvania, Ohio and West Virginia are vying to attract a plant that will turn gas into ethylene proposed by Royal Dutch Shell Plc, the Journal reported today. Shell intends to announce a site early next year, the newspaper said. Ethylene is a building block of plastics and other materials used to make pipes, paint and antifreeze.
Plentiful domestic gas supplies have depressed prices, attracting chemical, fertilizer and steel manufacturers to construct new U.S. plants and reopen shuttered mills in what was a high-priced market a few years ago, the newspaper said.
West Virginias legislature passed a bill this month establishing regulations for drilling into shale formations, a process known as hydraulic fracturing that involves pumping high-pressure water, sand and chemicals into the ground to shatter rocks and allow gas to flow, the Journal said, citing Keith Burdette, the states commerce secretary. The legislation should dispel any uncertainty about West Virginias ability to provide a reliable supply of gas, the paper quoted Burdette as saying.
Nucor Corp. is spending $750 million to build a steel mill in Louisiana, an investment that wouldnt have been feasible without the plunge in gas prices, the newspaper said, citing Nucor Chief Executive Officer Dan DiMicco.
CF Industries Holdings Inc., which makes fertilizer from gas-derived ingredients, plans to spend $1 billion to $1.5 billion over several years to expand its North American plants, the newspaper said. Low gas prices also have reduced electricity costs in some regions where generators burn gas, prompting Brazils Santana Textiles to build a $180 million denim plant in Edinburg, Texas, the Journal said.
–Editors: Jasmina Kelemen, Will Wade
To contact the reporter on this story: Joe Carroll in Chicago at [email protected]
To contact the editor responsible for this story: Susan Warren at [email protected]
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