AM-12-04 Impact of US Shale Gas and Liquids on the Refining Sector

Description:

Despite the increased attention on the shale sector, there is currently a dearth of publicly available information or analyses on its impact on US refining. However, the refining sector is already experiencing some of the impacts of the shale boom. For instance, low cost ethane recovered from shale gas is rapidly displacing refinery naphtha as a feedstock for US ethylene production. As producers increasingly target liquids rich shale plays, the impact on refining can be expected to increase. Additionally, as an oversupply of cheap shale gas begins to loom, industry stakeholders have started making long-term investments in infrastructure for natural gas-based transport fuels, which will compete with incumbent refined fuels. In this paper, we review the impact of shale gas on refining, and explore strategies by which the refining industry may proactively respond to the market shifts.