Cheap U.S. Shale Gas Threatens European Chemical Industry

  • Date: 16/07/14
  • Rubber News

Dozens of industrial sites and thousands of jobs could be lost due to impact of the U.S. shale gas on the competitiveness of French chemical producers, according to the Union of Chemical Industries.

The French industry association is calling on its national government urgently to introduce a “gas strategy” to counter the two-to-three-fold advantage U.S.-based producers have in terms of energy and feedstock costs.

To back its case, the UIC commissioned research firm Carbone 4 to study the impact of the gas-price difference between France and the U.S. on chemical producers.

This found that the shale gas boom is attracting investments worth $117 million into the U.S., with the new capacity threatening many facilities elsewhere in Europe.

According to UIC, 32 industrial sites could close in France with the loss of 10,000 jobs as a result of availability of cheaper U.S. products and the decline in French competitiveness.

The Carbone 4 study covered four major value chains: ammonia, ethylene/polyethylene, chlor-alkali and polyamide 6.6. Of these, the ethylene chain was found under heaviest attack by increasing U.S. volumes—with an extra 11 million tons of ethylene, a third of current capacity—expected in 2017-18.

Overall, Carbone 4 estimated that the entire U.S.-based chemicals industry was at least twice as competitive in terms of the gas-price differential, electricity and raw materials used.

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