With shale gas the United States has an abundant natural resource that wasn’t on the industrial or economic development radar screen a mere five years ago. In other words, “a competitive edge is coming back to America,” Dow Chemical Co.’s Brian Ames told a Houston audience last week.

“We believe the ‘shale gale’ can mean tremendous economic growth for this country,” said Ames, who is vice president of Dow’s olefins, aromatics and alternative technologies business. He equated the shale gas opportunity to the way technology drove the economy through the 1990s. The boom in domestic gas supply has already been lowering consumer energy bills and emissions of environmental pollutants.

And while it is re-energizing domestic manufacturing, the jury is still out on how far it will go and whether something might come along to impede the progress.

“I would say that for our business we’re most sensitive to global economic strength and GDP [gross domestic product] growth,” Ames told NGI on the sidelines of Platts 2nd Annual NGLs conference. “What we’re really watching is what’s happening with the slowdown in China, what’s happening with some of the dynamics in Europe and how we can really handle all that. We think that there’s a pause going on right now and the economy will recover more in 2013, 2014 and beyond.”

Another worry for Dow and companies like it that consume natural gas for energy and feedstock is the supply-demand balance for natural gas and ethane (see related story).

“I guess what I would be most concerned about is that somehow we choose to constrain supply while we stimulate demand on natural gas,” Ames said. “That’s what we saw happen in the decade beginning in the 1990s.” The tightening gas market drove manufacturing overseas to where feedstocks were cheaper, he said.

Ames is not a fan of stimulating the migration of power generation from coal to natural gas. “What we’ve seen in the past is the government encouraged switching from coal to gas while they limited supply in regions of the country, and that caused the market to get very tight and that became very difficult for manufacturers…”

But on the topic of exporting liquefied natural gas (LNG), he is a little more reserved. “For Dow, of course we’re completely aligned with free trade and global trade and all the things we do already with our products,” Ames said. “And in the case of LNG, I think we just need to be a little bit careful here because we’re using natural gas in the U.S. for many things, and the growth in U.S. gas demand is growing…It is growing and it is significant, but it takes time for these issues to kind of get into place.

“If we start stimulating a new demand, like exports to other areas, it has the potential to actually increase use beyond what we’re capable of really supplying, and it has the potential to raise prices, create the volatility again and then take away the opportunity for U.S. manufacturing.”

It’s not clear yet, Ames said, how much demand for natural gas will grow in the manufacturing sector. “We know it’s growing, and it’s getting better, but there still are a lot of things that are still happening. New plants and assets are are still being announced. We don’t know where that will stop.”

Over the last decade China has seen a lot of in-market growth built on naphtha supply available from new refineries, Ames said. “But then there was also growth from cost-advantaged regions like the Middle East. That area had a lot of feedstocks that needed to be developed, but what we’re finding now is the volume of new feedstocks [in the Middle East] is slowing down.

“Whereas here, we’ve developed a new capability to bring shale gas to the market, and that brings the feedstocks along with it. If we look at all of the new [petrochemical industry and manufacturing] assets that have been announced in the U.S., we think that is enough to sell out the available ethane. So it’s not unlimited, and obviously the growth in the feedstocks we think is something that can be variable depending upon how the producers choose to bring the resource to the market.”

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