We’ve written about the virtues of natural gas as a replacement fuel for diesel in this blog for some time now. It’s much cleaner and cheaper than diesel and as reported from the High Horsepower Summit 2012, natural gas may eventually replace as much as 25 to 40 percent of the diesel consumption in the world.
But ethylene, derived from natural gas, is also used widely in manufacturing chemicals and a whole host of plastics and synthetic materials and products. And as this report notes, the lower cost and greater availablity of natural gas should boost ethylene stocks and could help lower manufacturing and raw material prices in this country by as much as $11.6 billion a year. Already, Texas petrochemical manufacturers have invested $15-billion in improvements and upgrades to petrochemical plants to take advantage of this natural gas boom.
Some even speculate that the economic advantage these lower costs give us will help move a lot of material manufacturing back to the United States.
And lest any environmentalists get too out of sorts about the fracking that creates this natural gas bonanza, I should add that at least half if not three quarters of all the material used to create the outdoor gear one uses in surfing, boating, skiing, kayaking, and mountaineering is derived from petrochemical manufacturing. You don’t climb Everest in wool and silk. You don’t surf Peahi on a balsa wood board.