Friday, December 12, 2014

Petro-Chemical, Fertilizer, Refinery Industries

For archival purposes.

It will be interesting to follow the petro-chemical, fertilizer, refinery industry with the current slump in oil prices and a suggestion that based on supply and demand (not geo-political realities), the slump in oil prices could last a long, long time.

Note, I have tags for "fertilizer" and "refinery" at the bottom of the blog. I will add "Petro_Chemical."

For the archives.

Note how this story dovetails with the proposed Grand Forks fertilizer facility (Don caught this); original estimates of $1.7 billion were recently raised to $1.85 billion. Also note the cost overrun in a fertilizer factory under construction in Iowa.

Bloomberg is reporting on $100/hour welders and the construction of petro-chemical facilities:
A growing surplus of cheap natural gas from shale drilling is driving a boom in the U.S. chemical industry, which uses the fuel as a raw material for plastics, fertilizer and paints.
Plans by chemical companies to build or expand 215 plants worth $133 billion in the U.S., however, are overwhelming the construction work force in the primarily rural areas where they would be located, boosting costs and causing delays.
“We’re all competing for the same limited workforce,” Floren said in an interview. “The only way to address that is train people, which takes time, or bring in foreign workers, which is not allowed.”
Other chemical companies are facing the same issues, Nassef Sawiris, the CEO of OCI NV, said in a joint interview at Bloomberg’s New York headquarters with Floren and Charlie Yao, chief of the Chinese methanol producer Yuhuang Chemical Inc.
“It’s a shocker,” Sawiris said.
OCI, based in Geleen, Netherlands, is already over budget because of labor costs at a nitrogen fertilizer plant under construction in Iowa, according to Sawiris, and he’s having difficulty finding trained construction workers at a methanol facility in Texas that’s expected to open in 2016.
I keep coming back to two things with regard to all this:
  • the US is formidable when it comes to energy -- no one else even comes close
  • the US has the least expensive coal, natural gas, oil, wind, solar, hydro in the entire world -- and most of it is not subsidized by the government; subject to free-market realities; this will trickle through the entire economy
I track the "Big Stories" here. 


  1. The politicians and TV talkers think education is at Universities. period.

    We need welders.

    In one year, ND boom will be in Jamestown and bust will be in Watford City.

    Does University of Jamestown teach welding?

    Typing comments on an iPad is an adventure.

    Welder becomes elder. Then it becomes two words - wel something.

    Has Apple heard of welders?

    When you hear "education" think "welders."

    Wahpeton has the welding school. the best education in ND, perhaps.

    Anon 1

    1. The "auto-correct" on the iPad is a real pain.

      The Bakken operators will circle their wagons in Williston and Watford City; how this plays out is anyone's guess.