Celebrating America’s Natural Gas Advantage on National Manufacturing Day

The celebration of Manufacturing Day this week serves as an important reminder for communities across America of how manufacturing creates jobs, improves lives and provides opportunities for economic growth.

Nowhere are those realities more clear than in the Appalachian region, where abundant and affordable shale gas production is driving a manufacturing renaissance. Examples of new development and the potential for generational gains tied to greater production of clean-burning natural gas were on full display during the recent SHALE INSIGHT 2017 conference.

As MSC’s Dave Spigelmyer told KDKA-AM last week, the focus for jobs and development in the Marcellus and Utica Shale region is increasingly looking to downstream opportunities, including petrochemicals, plastics and related manufacturing:

“Let’s face it, we’ve talked for the last three decades about job losses in manufacturing. This is the opportunity for us to talk again about job growth in manufacturing and keeping our kids here to work in western Pennsylvania and across the state.”

Harnessing these opportunities and leveraging more natural gas end-use into investments in our future was a theme of countless presentations and keynote addresses during SHALE INSIGHT, which again was jointly presented by the MSC, West Virginia Oil & Natural Gas Association, and Ohio Oil and Gas Association.

More downstream opportunities are “emerging every day,” Spiglemyer said during the conference.

“You look at the region, and 25 percent of the nation’s demand for natural gas is coming from Pennsylvania, Ohio and West Virginia.”

Here’s what they’re saying about the crucial connection between shale gas, end-use and manufacturing opportunities that were highlighted during SHALE INSIGHT:

ETHANE CRACKER 

  • About 70% of the North American marketplace for polyethylene is within a 700-mile radius of the site along the Ohio River, said Shell Appalachia’s Business Integration Lead Michael Marr. Most of the market is primarily served by the Gulf Coast. “We’re definitely location-advantaged both from a supply standpoint to the Marcellus and Utica formations, as well as from the customer standpoint. That double location advantage is really what led us to the decision to invest here.” Chemical, mechanical and civil engineers are expected to comprise about a quarter of the facility’s 600 full-time workers. (Natural Gas Intelligence, 9/28/17)
  • As the Beaver Co. ethane cracker continues taking shape at the former Horsehead Corp. site, about 40 miles northeast of Weirton, officials in W.Va. and Ohio hope to gain spinoff economic development from the facility when it gets going. They also believe there is plenty of ethane in the Marcellus and Utica region to support more projects, such as the planned PTT Global Chemical facility at Dilles Bottom. “The expectation is that in the next two to three years, you will see plastics manufacturing,” Pittsburgh Regional Alliance President David Ruppersberger said in relation to the Shell ethane cracker and associated projects. (The Review, 9/30/17)
  • Construction continues on Shell’s $6 billion ethane cracker in Beaver Co., Pa., on the former Horsehead Zinc industrial site. “All of this investment by Shell is bringing jobs to the region,” said Michael Marr, business integration lead for Shell Appalachia. … At the height of construction, about 6,000 tradesmen will be employed on the project and the plant will employ 600 full-time once it is operational. The Monaca plant is Shell’s first new site since the late 1960s, (Shell’s Todd) Whittemore said. Shell’s cracker is likely to stimulate other jobs in the market as well, said David Ruppersberger, president of the Pittsburgh Regional Alliance. These are positions that would be geared toward providing maintenance services, supplies and engaged in some manufacturing or distribution activities related to the plant. (Business Journal Daily, 9/29/17)

FORGE THE FUTURE

  • Several speakers said there are “huge” opportunities to add petrochemicals and plastics manufacturing in the area – if a solid expansion strategy is followed. That strategy was already mapped out by two industry executives, Stacey Olson, president of Chevron Appalachia, and Morgan O’Brien, chief executive officer of Peoples Gas. Olson, who noted gas produced in Pa. is currently sold at a significant discount to the national price because of a lack of pipeline infrastructure, was the impetus behind the “Forge the Future” study she and O’Brien worked on. The plan is a strategy designed to create more demand for the natural gas being produced in Appalachia.The petrochemical and plastics industries are making billions of dollars of investment decisions and where to deploy them,” Olson said. The question to Olson going forward is, “Do we want to leave that opportunity to chance … or do we want to take control?” (Observer-Reporter, 9/27/17)
  • Chevron Appalachia and Peoples Natural Gas commissioned the “Forge the Future” study, which was unveiled by Chevron Appalachia President Stacey Olson and Peoples CEO Morgan O’Brien during the first day of the Shale Insight conference in downtown Pittsburgh. The companies hope to start a private sector-led effort to get natural gas- and manufacturing-friendly policies to unlock what they called a potential $60 billion economic windfall and 100,000 more jobs over the course of the next 10 years. “I think it paints an incredibly exciting picture of the region’s economic future and lays out simple and achievable strategies that should serve as a road map,” Olson said. “… That’s if and only if we can realize the full potential of a natural resource under our feet. And that’s not necessarily a given.” (Pittsburgh Business Times, 9/17/17)
  • Olson cited the new “PA Forge the Future” study, commissioned by Chevron and Peoples Gas, in outlining three “key development strategies” to improve the state’s situation. The study said Pa. needs to increase its gas-fired power and heating capacity in order to move 500,000 residential customers from oil to natural gas. One such power plant, the Tenaska Westmoreland Generating Station, is being built in South Huntingdon Township and is expected to come online later in 2018. The study also called for the creation of “competitive industry clusters” that enable growth in the petrochemical, manufacturing and data sectors. Finally, Pa. needs to expedite the expansion of the pipeline infrastructure, she said. Two pipelines — the Mariner East 2 and the Atlantic Sunrise — are under construction that will take Marcellus gas to domestic and international markets. Olson predicted a $60 billion increase in the state’s annual gross domestic product, the creation of 100,000 jobs and the development of three to five more ethane cracker plants if the study’s strategies are followed. (Tribune-Review, 9/27/17)

#NATGASWORKS 

  • Speaker after speaker at the Shale Insight Conference talked about the need to not take the region’s shale resources for granted and to do what’s needed to be done to draw more investment in the energy industry and manufacturing. “We have truly a regional opportunity to welcome a wave of manufacturing that we haven’t seen in generations,” said Shawn Bennett, executive vice president of the Ohio Oil and Gas Association. (Pittsburgh Business Times, 9/29/17)
  • The U.S. oil and gas industry — specifically the resources in Ohio, W.Va. and Pa. — will play a “critical role” in the world’s energy future, according to XTO Energy President Sara Ortwein, who also spoke at the conference Wednesday. She added future global energy demand will be shaped by three major forces: population growth, economic development and energy efficiency. … “Your ideas and insights have created economic development,” [Ohio Lt. Gov. Mary] Taylor told the industry leaders present. “As I like to point out, economic development is business spending money, and business spending money means jobs.” (Weirton Daily Times, 9/29/17)
  • The United States needs to “get the right mix of energy resources onto the nation’s energy grid,” [U.S. Deputy Secretary of Energy Dan] Brouillette said, pointing out that shale oil and gas “has been a game changer. Plunging natural gas prices and surging supplies is having a big impact on lowering electricity prices,” he said. “We need to be reliant and resilient.” … “We have to harness more, not less, of our resources,” Brouillette said. “We’re in the midst of an historic energy revolution that is leading us to energy dominance. … If we stay the course and embrace (the opportunities), we’ll surely achieve that dominance. It will benefit our security here at home and our allies abroad.” (State Journal (9/29/17)

Join the conversation on social media by following @MarcellusGas on Twitter, liking the MSC on Facebook, and visiting our blog. And join the Manufacturing Day 2017 conversation on Twitter using #MFGDay17.

Continue Reading: Marcellus Shale Coalition

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