EIA Report Shows Low Demand for NGLs in Marcellus/Utica Region
We spotted a blog post from our favorite government agency, the U.S. Energy Information Administration, that made us sit up and take notice. The EIA wrote about the consumption rates of what they call hydrocarbon gas liquids (HGLs). We call it natural gas liquids (NGLs). We typically define NGLs--the "other" hydrocarbons that come out of the hole along with oil and gas--as compounds like ethane, butane, propane, isobutane and pentane. All the "-anes." EIA goes one step further and includes the "-enes"--ethylene, propylene, butylene and isobutylene. The EIA post talks about what these compounds are used for. The thing that caught our attention was the chart showing "Top ten hydrocarbon gas liquids-consuming states, 2016." The chart lists which states "consume" or use the most NGLs (HGLs). Put another way, the chart shows where the best markets are for selling NGLs. And frankly, it ain't around here! Only one M-U state, Pennsylvania, even appears in the list of top 10 states. Both Iowa and Illinois use more NGLs than PA! Why is that? Simple answer: Both of those states, along with Texas, Louisiana, and Kentucky are the only states in the country that possess functioning ethane cracker plants. Cracker plants sop up a LOT of ethane, a lot of NGLs, and it shows in the numbers. PA will no doubt make its up the top 10 list when the Shell cracker goes online. Ohio, should PTT build a cracker there, will begin to appear in the list. And WV, if LyondellBasell buys Braskem and builds a cracker near Parkersburg, will also begin to appear in the list. Until that time, the brutal fact is that there just isn't much of a market in our region for the abundant volume of NGLs we produce--meaning drillers must export NGLs out of our region, or those NGLs become an expense, costing money to get rid of...
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