The Chemical Industry’s 10 Most Significant Events Of 2021
This is the last episode of 2021. I’m excited to be here. It’s been a journey and with some great responses and from people across the industry, a number of amazing guests and more. I’m here to say we’re wrapping up 2021 and I’m looking forward to 2022 and seeing where the show goes. One of the things I’m looking forward to in 2022 is launching The Chemical Community. The Chemical Community is going to be an online community just for chemical industry professionals, where we can engage in dialogues on topics related to the show, have some live expert discussions and Q&As, get access to the show’s guests and much more.
From the feedback I’ve gotten from folks who have read this, people want more engagement. They want to have a chance to have more of a conversation about what’s going on in the industry in a pretty safe and protected environment and that’s what The Chemical Community will do. Head on over to TheChemicalCommunity.com to get signed up and be part of the chemical community as we roll forward.
US Gulf Coast Winter Freeze
I am going to be talking about the top ten events of 2021. We’re doing this a little bit David Letterman style, for those of you that have watched David Letterman. We’re going to be counting down 10 to 1. They are not necessarily in any particular order but it’s in order. Here we go. Number ten is the US Gulf Coast winter freeze, otherwise known as Winter Storm Uri that happened in February of 2021. It was unanticipated.
What we saw in the industry was a number of our US Gulf Coast facilities having to shut down in very short order in a less than ideal fashion and having their equipment and plants go through the tremendous freeze. Energy issues, freezing plants, unfortunately, caused some delays, slow start-ups, delays in the product. I put this US Gulf Coast winter freeze as one of my top ten events in 2021. People who commented or voted on a poll on LinkedIn thought of the same thing.
China’s Energy Policy And Shortages
The number nine item is China’s energy policy and the energy shortages. There are a lot of things going on there but what we’ve seen is rolling blackouts across the industry affecting many chemical producers that have been exporting products into the US. Some of it is related to growth. Some of it is potentially related to China’s policy as it goes into the Winter Olympics, which are being held in February 2022. I have the China energy policy and electricity policies as number nine.
Number eight, Hurricane Ida, which hit Louisiana in August 2021. Just as chemical companies in Louisiana and even Texas were recovering from the freeze in February 2021, it’s a long time for some companies to recover, along comes a hurricane. Deep in the heart of the US Gulf Coast, hurricanes are a fact of life. Hurricane Ida hits land in Louisiana as a Category 4. It caused tremendous damage not just to plants and equipment but also to the people that are working in those facilities.
It caused a tremendous shutdown on the chemical industry for those facilities. They had to go through and recover tremendous challenges on a logistics system that had already been challenged. I heard stories of washed-out railroad lines. The good news is people across the industry are creative. Through that creativity, they’ve managed to recover and find alternatives but Hurricane Ida hit the top ten.
UK Energy And Natural Gas Markets
Number seven is the UK energy and natural gas markets. What we saw in summer 2021 is not enough carbonation for fizzy drinks. What the heck is going on there? All of a sudden, people across the UK and Europe understood a little bit more about the interconnectedness of the chemical markets. A lot of this had to do with very high net gas prices, making it not affordable for the fertilizer plants and some other plants to produce and they shut down. That was a problem across the UK for their food in particular industries and others until the government had to step in and create some alternative solutions.
As we sit here in December 2021, we’re still in the early part of winter and the expectation is that net gas prices in Europe and North America aren’t going to be very high. That has an impact, not just on consumers but also on our chemical industry, profitability and ability to operate. It’s wind and natural gas and we didn’t even talk about the wind part of it.
The wind story is that in the UK wind farms in the North Sea, there was less wind. Therefore, less energy and had to fire up the old coal fire plants. There’s this whole interconnectedness that people understand and understand more. We have to have policies that understand the intent but also the unintended consequences of those actions.
Number six, I’m saying this is COP26, the gathering in Glasgow around sustainability as we look at greenhouse gases, carbon and other things. I identified that event as a milestone, although this is part of an ongoing topic that folks across the chemical industry are working on. The event in Glasgow manifests into something significant. On the surface, it did not appear to have great impacts and any great answers, direction or strategy coming out of it. As we know, in many cases, it may be a slow roll and we’re going to start seeing impacts from it over in 2022.