Ethylene Supply in a Fluid Context: Implications of Shale Gas and Climate Change

• Main Author: Gillian Foster
• Format: Article
• Language: English
• Published: MDPI AG 2018-11-01
• Series: Energies
• Subjects: ethylene supply; shale gas; non-energy uses of fossil fuels; socio-economic scenarios; climate change
• Online Access: https://www.mdpi.com/1996-1073/11/11/2967

The recent advent of shale gas in the U.S. has redefined the economics of ethylene manufacturing globally, causing a shift towards low-cost U.S. production due to natural gas feedstock, while reinforcing the industry’s reliance on fossil fuels. At the same time, the global climate change crisis compels a transition to a low-carbon economy. These two influencing factors are complex, contested, and uncertain. This paper projects the United States’ (U.S.) future ethylene supply in the context of two megatrends: the natural gas surge and global climate change. The analysis models the future U.S. supply of ethylene in 2050 based on plausible socio-economic scenarios in response to climate change mitigation and adaptation pathways as well as a range of natural gas feedstock prices. This Vector Error Correction Model explores the relationships between these variables. The results show that ethylene supply increased in nearly all modeled scenarios. A combination of lower population growth, lower consumption, and higher natural gas prices reduced ethylene supply by 2050. In most cases, forecasted CO₂ emissions from ethylene production rose. This is the first study to project future ethylene supply to go beyond the price of feedstocks and include socio-economic variables relevant to climate change mitigation and adaptation.