- February 4, 2011
- Posted by: Ted Bullen
- Category: Alternative Energy, Chemicals, Energy, News
This week, The Dow Chemical Company announced that its 4th quarter earnings, for 2010, had nearly tripled. As reported in the Wall Street Journal, volume was up 12%, and earnings were at 37 cents per share as compared to 8 cents per share last year. (Dow Chemical Profit Nearly Triples – WSJ.com, February 3, 2011) Volume gains of 12% were also seen by Dow rival DuPont.
Dow chairman and CEO, Andrew Liveris, attributed this year’s results to the availability of cheap energy, mostly natural gas, and, specifically, cited the increase in shale gas production along with the diversion of cheap natural gas in the Middle East to power production. “They need power more than they need petrochemicals…” he added.
Liveris, further, said that the U.S. can become the low cost leader in the global chemical industry as this new source of cheap natural gas compensates for shipping costs to fast-growing Asian markets.
Shale gas is produced by drilling down and horizontally into the oil shale formations, then pumping water, sand, and chemicals into the hole to crack the shale to allow gas to flow up. Not only is natural gas freed from these formations, but oil is also recovered.
Oil executives and analysts say, that by 2015, new fields could yield as much as 2 million barrels of oil a day, which is more than the entire Gulf of Mexico currently produces. This new drilling is expected to raise domestic U.S. production by at least 20 percent over the next five years. Within 10 years, it could help reduce oil imports by more than half. At today’s oil prices of roughly $90 per barrel, slashing imports by half would save the U.S. $175 billion a year and sharply reduce the trade deficit.
Three cheers for American ingenuity!