American Plastic Pipe and Supply Seeing Benefits From Increased Shale Production
American Plastic Pipe and Supply in New Concord, Ohio has seen significant growth and expansion with the ongoing development of the Utica Shale here in Ohio. The company specializes in poly-ethylene pipes and fittings and many of their products are directly derived from ethylene, a by-product of natural gas production.
Many people believe shale development only benefits the energy market. But what they don’t know is that the natural gas and petroleum industry provides the feedstock from everything from vinyl siding to acetaminophen to plastics and fertilizers among many others.
American Plastic Pipe and Supply is a full service high density poly-ethylene (HDPE) plastic piping company. They supply their customers with high density poly ethylene pipe, valves, fittings, transitions, coil pipe, and ADS drainage pipe. Their clients include companies representing nuclear facilities, water treatment plants, landfills and irrigation systems all utilize the reliable pipe for their operations. Since it is cheaper than steel, HDPE pipe is the best alternative to more expensive steel.
But they have been seeing more business from the oil and gas side since shale development picked up in Ohio. Perry explained:
A lot of the oil and gas industry uses our piping to transfer their water from lakes, streams and ponds or wherever they get it for their wells
Not only do they service the industry with their piping, but their product is completely derived from natural gas and petroleum.
The product goes from the wellhead to the cracker to resins, said Perry Burt of American Pipe and Plastic Supply.
Poly-ethylene is made in a reactor at a cracker facility by opening the double bond of ethylene to form poly-ethylene. The resins are collected and processed to make large sheets of HDPE which make up the many different products American Plastic and Pipe Supply offer.
Before the development of natural gas from shale resources, poly-ethylene had been priced as high as $.80 a pound, in November this dropped to $0.61 a pound.
With recent increases in shale development, earlier this week Chevron Phillips announced that they are looking to invest over $30 billion in converting natural gas into plastics. The plants they are looking to build are what we know as cracker plants.
In the article Mark Lashier, Executive Vice President of Chevron Phillips said:
Output from shale formations will yield enough natural-gas liquids such as ethane to support about five new plants that produce ethylene and related plastics.
This announcement further shows the importance that shale has on our economy.
For years we have seen crackers being opened overseas and companies shipping plastic back to the United States. We have been a net importer of plastic for decades. Shale has the potential to increase plastic production in the United States significantly, potentially returning the nation to a status as a net exporter of this needed everyday material.
What is especially exciting is that many companies are now closely looking at Ohio, and other Appalachian states, for placement of multiple ethane cracker facilities. The location of these facilities will be extremely beneficial to all three states and will only build on the success of this company and continued jobs here in Ohio.