An energy crisis is coming, likely to be triggered by oil - Oil company Hess

(ICIS) -- Investment in oil supply is not keeping pace with the global demand growth of around 1m bbl/day, setting up a shortfall that puts the energy balance in peril, said the head of independent US oil company Hess on Tuesday. "An energy crisis is coming, likely to be triggered by oil," said John Hess, who serves as the company's CEO and chairman.

"Supply will then have to ration demand and prices will skyrocket - with the likely outcome of bringing the world economy to its knees," Hess told the Cambridge Energy Research Associates (CERA) conference in Houston. "The $140/bbl oil price of three years ago was not an aberration, it was a warning," Hess contended.

The problem is not one of a lack of oil resources, but a lack of new investment in accessing those deposits, Hess said. The US in particular needs to maintain existing tax incentives for drilling, and also encourage more upstream activity in the Gulf of Mexico.

On the demand front, oil represents 37% of US energy demand, of which 71% is used for transportation, he noted. The US should hike the vehicle performance standard to 50 miles/gal, much higher than the 35 miles/gal target set for 2016, Hess said.

That greater efficiency could be achieved through a mix of engine downsizing, using more diesel engines, reducing vehicle mass and pursuing advanced technologies such as hybrid cars.

It would take 15 years to replace the US fleet of 230m cars and light-duty trucks with more economical vehicles, but the change could save 3m bbl/day of oil, for an annual savings of more than $100bn (┬72bn) at current oil prices, Hess said.

MRC

(ICIS) -- PCK has cut propylene capacity at its refinery fluid catalytic cracker (FCC) in Schwedt, Germany, as a consequence of reducing gasoline production in order to manage burgeoning stocks, market sources said on Tuesday.

The introduction of 10% bioethanol-blended gasoline (E10) in Germany has proved unpopular with motorists and demand has been very low, forcing refineries to adjust output accordingly. Production rates were cut last week at the Schwedt FCC, which produces propylene as a by-product of gasoline production.

Propylene supply in Europe is being described as ⌠tricky having been affected by planned and unplanned production issues since the start of the year, and the shutdown of the Libyan cracker at Ras Lanuf during a period of relatively healthy demand.

Shortness of supply had contributed to contract prices reaching their third consecutive record high in March - ┬1,185/tonne ($1,646/tonne) FD (free delivered) NWE (northwest Europe). Spot prices were also at record high levels. Two US cargoes were recently reported sold into Europe at ┬1,240-1,250/tonne CIF (cost, insurance and freight) NWE.

MRC

(Plastemart) -- VISTA Performance Technologies (IPT) and China Prosperity (Jiangyin) Petrochemical Co., Ltd (China Prosperity) have successfully started up China Prosperity's 600,000 tpa PTA plant. The PTA plant utilizes INVISTA's market-leading PTA process technology, provided to China Prosperity under a license agreement.

⌠This plant has already exceeded its design flowsheet rate just a few days after its first initiation, continuing INVISTA's reputation for PTA plants that start-up reliably and continue to operate at high efficiency ⌠This plant has already exceeded its design flowsheet rate just a few days after its first initiation, continuing INVISTA's reputation for PTA plants that start-up reliably and continue to operate at high efficiency, said Mike Pickens, IPT general manager.

MRC

(Arkema) -- Arkema will implement a price increase for its Kynar fluoropolymers products, effective on April 1st 2011 or as soon as practicable under the contracts. Prices will increase by 10 to 15% depending on the type of grades and on the regions. This increase is necessary to partially compensate the continuous raw material and energy cost increases.

With its outstanding resistance to chemicals, UV radiation, and high temperatures, Kynar fluoropolymers products are widely used in the chemical processing industry, high performance coatings, offshore production and in newer applications such as Li-ion batteries and photovoltaic solar panels.
MRC

(Plastemart) -- T Chandra Asri Petrochemical plans to invest USD$500 mln between 2011 and 2014 for expansion to meet growing demands for polyolefin products. USD$100 mln will be allocated towards a 100,000 tpa butadiene plant in Cilegon, Banten. The plant is expected to commence operations in Q3-2013. The company has also allocated funds to enhance the capacity of its existing plants through de-bottlenecking processes.

US$362.5 mln will be allocated to increase capacity of its existing plants -US$2.5 mln to increase capacity of its polyethylene plant from 320,000 tons to 336,000 tons in 2011, and another US$60 mln to increase the capacity again to 536,000 tons in 2014. US$300 mln outlay is being planned to increase the capacity of its naphtha plant from 600,000 tons to 1 mln tons in 2014.

MRC