US Love Affair with Shale Gas Damaging Butadiene Production

NEW YORK (GBI Research), 30 October 2012 – The relatively recent and intense exploitation of US natural gas reserves is resulting in an increased dependence on butadiene imports, states a new report from energy analysts GBI Research.

The business intelligence company’s latest study * states that the disparity between butadiene production and demand will climb in the near future as the US moves away from crude oil and naphtha to the increasingly cheap natural gas.

The percentage of C4 hydrocarbons required for the production of butadiene is very low in natural gas compared to crude oil or naphtha. As a result, growing demand will necessarily require a boost in imports.

US butadiene demand last year stood at 1.9 million tons ‘ comparable to the 1.6 million tons the country produced. However, GBI Research predicts demand will hit 2.4 million tons by 2020, while butadiene yield will climb at a slower rate, reaching 1.9 million tons by the end of the decade.

The next four years in particular are expected to be relatively bleak in terms of butadiene production growth, but a number of on-purpose technologies which are currently in development are then expected to contribute to overall production ‘ although it will take some time for these to emerge as a viable alternative supply option.

Last year the US imported 329,118 tons of butadiene, with Canada, South Korea, Netherlands, China, the UK and Germany the leading suppliers. GBI Research expects rising demand to see this figure reach 524,916 tons by 2020.

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