WSJ: Shale Boom Shines Light on Natural-Gas Liquids

An unsung byproduct of oil and natural-gas production is getting more attention from hedge funds and investors as they seek new ways to bet on the U.S. shale boom.

Natural-gas liquids, which include ethane, propane, butane, isobutane and natural gasoline, are separated out from crude oil and natural gas. They are known as the fuels in propane grills and butane lighters and as feedstocks to make plastics and chemicals. Until recently, they attracted little investor consideration.

But that has begun to change amid a swift increase in both supply and demand. U.S. production of NGLs topped 3 million barrels a day this year. Production volume has grown 60% in the past decade to become on par with the amount of oil produced in Texas or Iraq. Petrochemical manufacturers world-wide are expanding to take advantage of the new supply.
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