Emerging Shale Gas Downstream Impact to U.S. Industrial Economy

Emerging Impact

The U.S. shale gas revolution has evolved steadily over the past 20 years and the positive impact is just now becoming evident in the Downstream phase of the petroleum and natural gas industries. Over the next 20+ years the impact will have significant implications to the U.S. industrial landscape as well as the international gas and petrochemical markets. It’s important to note the significant implications will be realized in and among industry challenges including oversupply, shifting feedstocks, shifting well production targets, crude oil price implications, and strong international competition for market share.

The shale gas development of the last 20 years is represented in Figure 1 as a time line having 5 phases; Exploration, Production, Midstream, Downstream, and Manufacturing. The first two phases actually comprise the Upstream processes of the petroleum and natural gas industries, but have been separated in this model.

The model shows the sequential transition to each phase by time frame, and the time horizon between each phase’s starting point indicates the primary growth period for each phase. For this model the Exploration phase began in the mid-90s with the start of horizontal drilling combined with fracking. The Production phase started near 2005 when the shale gas production showed distinct growth increases. The Midstream phase began near 2011 when wet gas processing and Natural Gas Liquid (NGL) production increased significantly and combined with the transport of oil production volumes. The Downstream phase is shown to start in 2015 with the ramp up of new petrochemical production facilities.

Magazine Issue 4 Cover
The full article, by Taylor Robinson, PLG Consulting, is available in Issue 4 of Shale Gas International Magazine and can be found on page 19.