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The location of the petrochemical industry : a comparative study of three major world regions. Peet, John Richard

Abstract

The use of oil and natural gas for the production of chemicals is of recent origin, yet petrochemicals have already reached a position of major importance. Investment in the industry is growing at an extremely rapid rate, both in the developed and underdeveloped countries. In this study the distribution of petrochemical production is examined in Western Europe, Japan and the United States. There are two main aims, to explain the distribution of the industry and to demonstrate the application of four methods of geographic analysis. Three of these methods, the examination of the historical development of activity, the analysis of the factors influencing the location of activity and the description of the major regions of activity, have been widely used in economic geography. The fourth, the comparison of the costs of production and transport involved in locating activities in various regions, has not been used, yet merits greater attention. In Western Europe, a historical analysis of the petrochemical industry shows that the presence of an old established coal-chemicals industry has had a significant effect on subsequent developments. Three other factors, the influence of raw materials availability, the influence of markets, and governmental action have also affected the location of petrochemical plants. Japanese petrochemical plants are entirely located on the coasts, most of the raw materials for the industry being imported. The plants fall into a number of distinct groups, which are described regionally. The United States also has several major regions of petrochemical production around coastal refining ports, at inland "gateway" points, in coal-chemicals centres, and on the Gulf Coast oil and gas fields. Economic factors which have led to the concentration of production in the Gulf Coast region are analysed according to the comparative cost method, which is found to be effective. Comparative cost analysis provides a framework onto which empirical studies may be built. Thus it may be possible to construct a theory of location around this and similar methods.

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