# OAR Box 1878

Prepped by Charmelle Mathews



# Document

Number: 

# .63 ) 11-1-4 2 Docket Number: 

# A-90-1 9

Printed 11/28/200811:47:27

AM 

# Sheet 63 of 68 P. 1

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# u th e pastii i yea n ethylen e rotrgmftlo n pe r

capitah u risen to d outpu tha aexceede d GNPI n thre e o f thos e si xyean . " I don' tthin k It' aaproduc

tthat' aquit

e dea d yet, " h e taya . Lookin g a tfeedstocks , Mr

. Lavie * uy i i t I s probable Hi tnatura

l f u supplies , an

d therefor e ga s liquid s feedstock s supplies , wil l declin e ove rtb e oex tte n yean . A s a result , be expect

al o se e agradua

l increas e i o th e us e o f heav y liquids a s olefin s feeds . B y 19M, it' s expecte d only M potes to f ethylen e in tb e US will b e produce d fro m natura l ga s liquids a s compare

d wit h 7 5 per cen tl aI S J7 . Worl d ethylen e deman

d ha s rise n sinc e oetfd sadeqtat e fornrnc

h o f the oer tdecade , supply wil l require more an d mor * cootlno ooj operatio n c f

availabl e dealkylatlo n ca pacity , whic

h ln tur n wil l hav e an'effec to

n -P-f-'nT-pflf f poCCJ L - i i f A s lon g a s deman d ca n b e supplie d fro m capacit y l n tb e l.eWiUUoo-to-l.M-bUlloo galjo arange , th e DR I analys tsty i pric e shoul d b e i n it s norma l relatio n t o gasolin e o r crud e oil . However , a s deman d require s ca pacit y a ttb e uppe rea d o f th e raise , pric e wil l mov e u p t o eventuall y brin g o o "pric e sensitive " dealkylatlo n units , currentl y amounting t

o abou tJ M millio n giQjns . ; Suppl y fro m bot h reformate an

d pyroiysi s 

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6. 6 percen tayea ran d currentl y stand s a t10 8 billio n pounds , Mr . Lavac h says , u p fro m 7 7 billio n pound s i n ISt rB y 1992 , deman d i s expecte d t o excee d 12 5 billio n pounds , averagin g 1. 2 percen ta yea rgrowth . Capacit y currentl y stand s a t12 0 billio n pounds , representin g a n overal l operatin g rat e o f 9 0 percen t"B y 199 2 w e wi n probabl y hav e exceede d plan tcapacit y unles s ne wfa cilitie s ar e brough to n stream, " Mr . Lavac h says , bu tvit h onl y hal f

th e addition s bein g planne d aroun d th e worl d h e feel s suppl y woul d b e In balanc e wit h demand . Mr . Lavac h say s b e expect s U S ethylen e deman d t o reac h 39. 3 blllio o pound s l n 199 1 Som e o f tb e factor s Impactin g tb e marke t includ e increase d competitio n fro m krwer eos tfeedstoc kproduce n i n developin g area s o f th e worl d an d areduce d leve l o f exporte d derivatives . H e point s ou ttha tl n 1979 , expor tequiva lent s o f severa l majo rethylen e derivative s represente d abou t1 2 percen to f U S ethylen e consumption . Tb e figur e droppe d t o 8 per cen ti n 195 5 an d Mr . Lavacf asay s i ti s possibl e tha twithi n th e nex tte n yea n th e figur e wil l represen tonl y abou t4 percen to f U S ethylen e consumption . Also , improvement s In productio n technol og y o raller-ut e technolog y fo rsom e deriva tive s wil l increas e yield s an d lowe rethylen e requirementa . Richar d O . Oodge, ' senio rconsaKir tfo r DRI/McCrsw-Hlll , Inc . tol d tb e CMR A member s b e expect s benzen e deman d t o gro wmoderatel y a ta n averag e annua l rat e o f 1. 5 percen tove rth e nex tdecade . Domesti c consumptio n o f

L 9 billio n galloe s thi s yea ri s projecte d t o gro wt o 13 6 billio n gallon s l n 1998 . Styren e t s expecte d t o continu e tigh tunti l a tleas tth e earl y 1990's , Mr . Dodg e says . Base d o o curren texpansions , a n additiona l 95 0 millio n pound s i s likel y t o b e mad e avail able . Whil e thi s tota l wil l b e adequat e t o mee t deman d ove rtb e nex tfiv e yeu-s , Mr . Dodg e say s export s o f

styren e an d derivative s ma y b e slo wa ttime s I

n orde rt o mee tdomesti c demand . Export s hav e bee n runnin g l n th e I*biIUon-to-1.3-billio->-poun d rang e an d thi s leve l coul d b e maintaine d throug h th e earl y 1990's . Fo rstyrene , Mr . Dodg e say s deman d fo r polystyren e i s tb e drivin g forc e an d h e doe s no tfet l li;' . ^lystyren e demaD d shoul d b e othe rtha n clos e t o a n averag e u i «J : —- i 1. 5 t o ] percen tpe ryear . I n fact , DR I i s forecast in g growt h fo rpoty-rtj-ren e worldwid e t o b e aroun d 3 percen to . t rth e nex tte n yean . "O n th e othe rhand , w e ar e forecastin g highe rgrowt h rate s fo rpolyolefln s world wid-!. " I * Mys , an d add s (ha t"wit h w-w-Mwid e iio.-u.£c ; o f

plastic s an d thei rt»» * lis teri aI s "au-nw tan y pl*5*J cI s i n demand. " ' gasolin e I s expecte d t o increas e b y a s muc h

. a s 15 0 millio n t o 20 0 millio n galloe s pe ryear , base d o n curren texpectations , Mr . Dodg e 

### «y« - I ) Th e lowe rcos tsupplie s ar e expecte d t o balanc e suppl y unti l 1993 , althoug h suppl y coul d b e tigh tthroug h 1990 . Certainly . Mr . Dodg e asserts , D O ne w swin g dealkylatlo n capacit y wil l b e required . A s tb e knld-1990' s approach , bowever , b e say s ther e appea n t o b e adefinit e nee d fo rmor e cootlnota s opera tio n o f curren tdealkylatlo n faculties . Pas t tha tperiod , th e forecas tindicate s tha tne w benxen e capacit y coul d b e required . A tth e sam e time , Mr . Dodg e caution s tha t i n tha tsam e timefram e ethylene'deman d I s expecte d t o requir e mor e heav y feedstocks , whic h wil l increas e benxen e suppl y fro m tha t sourc e an d pu tof

f th e nee d fo rhighe rcoa t dealkylatio n supplies . | . 

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