Bookmark 02-06-2014

Low U.S. Natural Gas Prices Increase Domestic Plastic Production

EIA, Manufacturing Energy Consumption Survey, and Bureau of Economic Analysis U.S. Trade in Goods (June 2013)

The U.S. Energy Information Administration (EIA) has published a new “Today in Energy” brief that looks at how low natural gas prices have contributed to higher U.S. plastic production.

According to "Today in Energy", low U.S. natural gas prices have helped increase domestic plastic production after a decline from the 2008 recession. Because many U.S. plastic manufacturers use natural gas as their primary fuel source and natural gas-sourced liquids as a feedstock, continued low prices for those resources could boost raw plastic exports, given higher foreign energy prices.

During the economic downturn in 2008 and 2009, U.S. production of plastic products declined further than raw plastic production, and has been slower to recover. Demand for raw plastic from other parts of the world, such as China, remained strong, keeping U.S. plastic resin production from falling further and enabling it to recover faster.

Plastic resin production is one of the largest energy consumers in the manufacturing sector, estimated to consume almost a quadrillion British thermal units (Btu) in 2010 for fuel and non-fuel uses, and providing nearly USD 84 billion of shipments in the U.S. economy in 2011. The energy required to make plastics has decreased markedly since 2002, suggesting some efficiency improvements in plastic production, along with structural changes, such as new products or technological advances.