The industry's convention wisdom tries to answer this question through the lens of recent natural gas pricing history. During the 1980's and 1990's, the U.S. petrochemical industry enjoyed the benefits of cost advantages Natural gas prices in the U.S. averaged $2.00-3.00 per MMBtu during 1993-1999. An eight-week period of colder-than-normal weather in December 2000 and January 2001 and an episode of panic buying pushed natural gas prices to $9-10 per MMBtu for a few weeks. However, Henry Hub cash spot prices fell from a from a January 2001 average of $9.13 per MMBtu to a fourth quarter average of $2.41 per MMBtu. Most industry analysts attempt to answer this key question by focusing exclusively on natural gas prices and the implications for NGL prices. However, this question and the more strategic question of the U.S. Petrochemical industry'disadvantage) require an evaluation of other important and related factors. These factors include trends in pricing and availability of all feedstocks, pricing and demand for coproducts, and demand for products derived from primary petrochemicals. This paper presents answers to these questions.
展开▼