Ethane Rising: Another Fossil Fuel Advances

“The impact of ethane is perhaps the most remarkable development in the remarkable story of the shale revolution. Less than three years ago, ethane was a largely unwanted byproduct of oil and gas drilling …. But today, ethane is feedstock for nearly half of U.S. plastics production and a valuable export to chemical companies around the world.”

 – Jordan Blum, “How the Ethane Molecule Changes the Gulf Coast — and the World,” Houston Chronicle,  September 15, 2018.

“Resources are highly dynamic functional concepts; they are not, they become, they evolve out of the triune interaction of nature, man, and culture, in which nature sets outer limits, but man and culture are largely responsible for the portion of physical totality that is made available for human use.”

– Erich Zimmermann, resource economist (1951) [1]

Methane. Natural gas. We know all about that. But in a fascinating new article, “How the Ethane Molecule Changes the Gulf Coast — and the World,” Jordan Blum of the Houston Chronicle documents yet another advance for the fossil-fuel age, indicating that the mineral resource age is still vibrant–and young.

Here are some excerpts from Blum’s feature that tell the story:

“But accompanying the natural gas particles [from the fracked well] was another, more complex molecule, containing two atoms of carbon each attached to three atoms of hydrogen. That molecule, described chemically as C2H6, is transforming the Gulf Coast economy and reshaping global markets, from Europe to the Middle East to Asia. Known as ethane, the molecule is the catalyst for the petrochemical boom that has attracted tens of billions of dollars of investment, created tens of thousands of construction and manufacturing jobs, expanded exports, and fed the growing demand for consumer goods in China, India and other developing nations.”

“The impact of ethane is perhaps the most remarkable development in the remarkable story of the shale revolution. Less than three years ago, ethane was a largely unwanted byproduct of oil and gas drilling, much of it burned away in the natural gas stream flowing to power plants, businesses and homes, or flared off at well sites.”

“But today, ethane is feedstock for nearly half of U.S. plastics production and a valuable export to chemical companies around the world. As ethane flows from Texas shale fields, chemical and energy companies are building and expanding plants to take advantage of the cheap, plentiful raw material, plowing more than $140 billion into the Gulf Coast alone.”

“U.S. ethane production is projected to reach 2 million barrels a day by 2020, double the output at the height of the last drilling boom in 2014. On the journey from wellhead to market, ethane molecules will change forms several times as they are separated from natural gas, heated to become ethylene, processed into polyethylene, and ultimately extruded and molded into packaging and products that will appear on shelves in stores from Houston to Mumbai and Ho Chi Minh City.”

“’It’s absolutely extraordinary this is happening in the United States,’ said Neil Chapman, Exxon Mobil senior vice president. ‘I can assure you nobody predicted this in 2000 or even 2005.’”

“U.S. ethane production is projected to reach 2 million barrels a day by 2020, double the output at the height of the last drilling boom in 2014. On the journey from wellhead to market, ethane molecules will change forms several times as they are separated from natural gas, heated to become ethylene, processed into polyethylene, and ultimately extruded and molded into packaging and products that will appear on shelves in stores from Houston to Mumbai and Ho Chi Minh City.”

The “Functional Theory of Resources”

Economist and resource specialist Erich Zimmermann was way ahead of his colleagues more than a half century ago when he rejected the dominant (but fallacious) fixity-depletion view of mineral resources in favor of a functional (real world) theory of resources. Resources are not, they become is one of the most profound statements in the history of resource economics.

May Professor Zimmermann have the last word:

“Nothing is more fatal to a realistic and usable understanding of resources than the failure to differentiate between the constants of natural science and the relatives of social science, between the totality of the universe or of the planet earth, legitimate domains of the natural scientist, and that small portion of these totalities which constitutes the ever changing resources of a given group of people at a given time and place, the bailiwick of the social scientist.” [2]

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[1] Zimmermann, World Resources and Industries (New York: Harper & Brothers, 1951), pp. 814–15.

[2] Zimmermann, “Resources—an Evolving Concept,” Proceedings and Transactions of the Texas Academy of Science, 1944 (Houston: Texas Academy of Science, 1945), p. 160.