Total industrial gas demand in the United States, including some captive consumption, is forecast to increase 4.9% annually to 7.5 trillion cubic feet in 2013, valued at $23.5 billion. Two factors nurture demand and growth in industrial gas markets: the steady and ongoing development of new products and technologies that increase demand for industrial gases; and a high degree of stability in markets such as food and beverage processing and healthcare. Industrial gases are essential to the markets they serve, and although their demand is subject to the cyclical nature of individual markets, the diversity of industrial gas applications mitigates the effects of cyclicality in any single business sector.
Hydrogen Enjoys Best Growth Opportunity
The petroleum and natural gas industry is by far the largest market for industrial gases in the U.S., accounting for 65% of total gas demand by volume and 60% by value in 2008, including huge quantities of captive hydrogen.
Demand for hydrogen in the petroleum refining industry represents the largest growth opportunity for industrial gas suppliers in the U.S. for the coming decade. Refiners are mandated to produce cleaner-burning fuels from increasingly impure crude oil, a process requiring massive amounts of hydrogen.
| Ongoing development of new products and stable markets such as food and beverage processing and healthcare will increase demand for industrial gases. |
Captive hydrogen production accounted for 77% of refiners’ needs in 2008, but future increases in hydrogen demand will come primarily from merchant suppliers. Demand for industrial gas in the petroleum and natural gas production segment will grow 4.3% annually through 2013 due to the increased use of nitrogen and carbon dioxide for enhanced oil recovery projects.
Hydrogen is the most-consumed industrial gas in the U.S., followed by nitrogen and oxygen. These three gases combine for 95% of industrial gas demand by volume. The petroleum and natural gas industry dominates hydrogen and nitrogen consumption. The chemical and metal processing industries account for most oxygen demand and are both significant consumers of nitrogen as well. Carbon dioxide demand is dominated by the food and beverage processing industries.
Argon, helium and acetylene are low volume, high value gases, demand for which is dominated by the metal processing and chemical processing industries. The electronics, food and beverage processing, and healthcare industries together accounted for 6% of total gas demand by volume in 2008. Though relatively small, the healthcare market will experience the most rapid growth of these three markets—the result of growing oxygen demand for respiratory therapies.
The above was excerpted from the “Industrial Gas Report” produced by the Freedonia Group, located in Cleveland, Ohio, and on the Web at www.freedoniagroup.com. For information on world industrial gases, visit www.WeldingandGasesToday.org.
