LNG Exports: A Petrochemical Manufacturer's View

Dow Chemical Co. supports exporting LNG to countries with which the United States has free trade deals in place, but the company advises caution on the issue in order to prevent natural gas price volatility, according to company spokesman Peter Gudritz.

Gudritz, public policy manager in Dow's Global Government Affairs and Public Policy unit, explained that price volatility threatens U.S. competitiveness and job creation.

See below for more from Rigzone's discussion with Dow's Gudritz.

Rigzone: What have new domestic natural gas supplies from shale plays meant specifically for Dow?

Gudritz: Affordable and stable U.S. natural gas prices, particularly compared to global oil and natural gas prices, have given the U.S. chemical industry – and manufacturing more broadly – a very significant competitive advantage. So basically that means that the chemicals industry is investing again. The manufacturing industry is investing again, and you have more reinvestment back in the United States that's creating jobs. We're increasing exports of chemicals, and so now we've announced some investments in line with that and you're seeing that across the country. So we need to be kind of careful in how we manage our natural gas policy. 

Rigzone: What are some major U.S. capital investments that Dow has announced that are directly linked to abundant domestic natural gas supplies?

Gudritz: In December, at one of our facilities in Louisiana we began producing on-spec ethylene. That was actually a segment of our overall investment plan along the Gulf Coast that aims to connect our operations with affordable natural gas and natural gas liquids through the increasing supplies from natural gas which we believe will improve our long-term competitive advantage for our businesses, our customers, our suppliers and generally the overall U.S. economy. We're anticipating those creating thousands of jobs during construction and even more indirect jobs from that, but beyond this [our investment] … we've compiled a list of over 120 manufacturing investments that have been publicly announced. In total that's roughly $110 billion worth of investments across manufacturing, so when you start looking at the exponential effect of the jobs created from those investments it's a significant and a massive opportunity for manufacturing in the U.S. economy.


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Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@downstreamtoday.com


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