(BUSINESS WIRE) A recent announcement shows that U.S. merchant industrial gas demand could reach 4.3 trillion cubic feet by 2013. Total industrial gas demand in the U.S., including significant captive production of hydrogen by the petroleum refining industry and other captive gases, is forecast to increase 4.6 percent annually to 7.5 trillion cubic feet by 2013. This quantity carries an estimated value of $23.5 billion. If the merchant market in 2013 totals 3.2 trillion cubic feet, it would be valued at $16.2 billion.

Hydrogen, including captive demand, is the most consumed industrial gas, and massive quantities of it will be required to refine crude oil into clean-burning fuels. Additional prognostications include:

  • Nitrogen and oxygen will follow as volume leaders, with 15 percent and 10 percent shares in 2013, respectively. The chemical and metal processing industries account for most oxygen demand and, with the addition of the oil and gas sector, for most nitrogen.
  • Carbon dioxide demand, also a high-volume gas, will comprise 4 percent of total volume in 2013.
  • Argon, helium and acetylene are low-volume, high-value gases, and the demand for which will be dominated by the metal processing and chemical processing industries. The helium market has experienced some supply and demand imbalance because of production disruptions in certain regions of the world.
  • The petroleum and natural gas industry is by far the largest market for industrial gases in the U.S. and will account for 69 percent of total consumption by volume in 2013. Demand for hydrogen by the petroleum refining industry represents the largest growth opportunity for industrial gas suppliers in the U.S. for the coming decade. This stems, in part, from a refiners’ mandate to produce cleaner-burning fuels from increasingly impure crude oil – a process requiring massive amounts of hydrogen.
  • Future increases in hydrogen demand will come primarily from merchant suppliers, whose share of hydrogen demand will jump from 23 percent in 2008 to 1.7 trillion cubic feet in 2013.
  • The oil and gas production segment, representing 4 percent by volume of the entire oil and gas sector, will grow 4.3 percent annually through 2013 to 210 billion cubic feet, due primarily to the increased use of nitrogen and carbon dioxide for enhanced oil recovery projects.
  • The chemical processing industry is the second largest consumer of industrial gases in the U.S. and will account for 11 percent of the market in 2013, primarily for nitrogen, oxygen and hydrogen. Similarly, the metals processing industry is the third largest industrial gas consumer, and will require 8 percent of industrial gases consumed in 2013 – primarily oxygen and argon.