There is no viable alternative to the petrochemical business

Jerry James:
Cell phones. Tires. Medical equipment. Food packaging. Clothes. Fertilizer. Detergents. Plastics. Can any of us live without these items? Perhaps some of us can sacrifice one or two, but it's safe to say these products play an integral role in our lives.

The common thread through all of these everyday products (and countless more) are petrochemicals. Beyond their role in creating the products we rely on, petrochemicals also provide critical components to renewable energy sources; they're used to manufacture wind turbine blades, solar panels, batteries, electric vehicle parts and more. This explains why petrochemicals are projected to surpass the transportation sector as the largest driver of crude oil demand worldwide.

This month, the International Energy Agency (IEA) examined the growing demand for plastics, highlighting the massive potential for future growth. Its report, "The Future of Petrochemicals," finds petrochemicals will comprise more than one-third of global oil demand growth by 2030, due to demand for plastics, and nearly half by 2050 – ahead of powerhouse industries like trucking, aviation and shipping. The report shows plastics demand has nearly doubled since 2000, outpacing every other bulk material, including cement, steel, and aluminum.

But despite all of this, as Dr. Fatih Birol, Executive Director of IEA notes, petrochemicals remain one of the "key 'blind spots' in the global energy debate" – an issue critical to the energy sector. While the trend of an increasing demand for their product is exciting for the industry, it brings a dilemma: How is the industry preparing to meet this growing demand?

The Gulf Coast continues to provide a natural primary hub for crude oil production and exports, as well as liquefied natural gas exports. With its proximity to the oil-rich Permian Basin and maritime access, it's a logical option for the petrochemical industry.

But the transformation of the U.S. energy landscape provides an opportunity to expand petrochemical manufacturing beyond the shoreline in order to meet the growing demand – both domestically and overseas. Over the past decade, the shale boom to the northeast, specifically the Shale Crescent USA region of West Virginia, Ohio and Pennsylvania, has skyrocketed natural gas and natural gas liquids (NGL) production.
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The keep it in the ground left has no alternative source for the products supplied by the petrochemical industry.  In fact, Tesla could not produce cars without it nor could any other manufacturer.  It was one of the major mistakes of the Obama administration when it tried to impose restrictions on the oil and gas industry.

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