Bloomberg News

Ethane Declines to Almost a 5-Year Low, Benefiting Dow Chemical

November 28, 2012

Ethane, a component of natural gas, fell to the lowest price since at least January 2008 at a Texas distribution hub, benefiting companies such as Dow Chemical Co. (DOW:US) that use it to make ethylene and related plastics.

Ethane dropped 2.3 percent to $26.125 cents a gallon at Mont Belvieu as of 11:35 a.m. New York time, according to Liquidity Partners data. It has declined 68 percent this year.

Dow and other U.S. chemical producers have gained a “massive competitive advantage” from cheap gas as hydraulic fracturing boosts output from shale formations, George Biltz, the company’s vice president of energy and climate change, said today in an interview at Bloomberg headquarters in New York. Dow is “happy” about the current ethane cost, he said, declining to say whether the low price is sustainable.

Cheap gas has spurred more than $80 billion of announced U.S. manufacturing investments, including $4 billion by Dow, Biltz said.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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Companies Mentioned

  • DOW
    (Dow Chemical Co/The)
    • $53.08 USD
    • -0.41
    • -0.77%
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