By: Dan Shingler
CRAIN'S CLEVELAND BUSINESS
April 9, 2014
CANTON, OHIO — Northeast Ohio, and especially its business community, needs to be thinking and talking more about how the region’s broad industrial base can capitalize on the shale-gas boom.
That was the message delivered April 7 by Team NEO’s Paul Boulier, at the Canton chamber’s “Plastics Products from Utica Energy” event. His goal was to “stimulate thinking, create ‘readiness,’ drive dialogue and hopefully spark ideas” about how shale drilling can boost area manufacturing.
Boulier was there largely because of his background in the plastics industry, including stints managing local companies such as A. Schulman, Core Molding Technologies, Avery Dennison and Nova Chemicals. Admittedly, he’s been at it a long time — about three decades.
But these days, he’s more of a salesman. As a business attraction vice president for Team NEO, he told an audience in Canton that his product — Northeast Ohio’s industrial landscape mostly — just got a lot more arable.
A supply of local feedstock will be a boon for plastic compound makers and the rest of the related food chain, right through to molders and their tool makers, Boulier said. At the same time, industry generally stands to enjoy relatively low electric rates, which is attractive to just about any manufacturer in any industry.
“They all need electricity,” Boulier said.
The various cost benefits resulting from increased domestic natural gas production are not lost on many in industry. Just a day after Boulier made his comments, Jacob Prak, CEO of the manufacturing and engineering firm Michigan Manufacturing International, also was touting the benefits of shale gas on the industrial sector.
In commenting on the outlook for manufacturing generally, Prak said in email correspondence that shale gas, in particular, was fueling a positive outlook.
“Cheaper natural gas feed stocks are making U.S.-produced plastics and other materials less expensive than in other parts of the world,” Prak wrote. “This in turn will mean that finished products which rely on these materials will be more competitive.”
As for ongoing investments directly related to shale gas, the writing is already on the wall — not to mention more than a few dotted lines, he said — as evidenced by a recent tally of $19 billion in Utica Shale infrastructure investments in Ohio to date, and related developments like Odebrecht’s announcement of a cracker plant to produce natural gas derivatives in Parkersburg, W. Va. That last one would be an investment of as much as $5 billion by the big Brazilian oil and gas services company.
The chances of getting $19 billion in in-state investments prior to shale drilling? “Four years ago? It was probably zero,” Boulier said.
Those Ohio investments go along with current investments across the United States of about $100 billion in 148 major projects, with 53 percent of that capital coming from foreign firms looking to take advantage of the U.S. business climate for plastics and chemicals, he said. In the United States, the Gulf Coast gulps down most of that — more than 75 percent — but the Ohio Valley gets about 13 percent.
“If we get 13 percent now, what about getting 20 percent,” is a mantra Boulier would like to hear others parrot.
“Use it or lose it,” he says, with regards to the vast amount of natural gas liquids and related raw materials about to come out of the ground in Ohio in the coming years.