Senators see Appalachian shale as 'a real field of dreams'

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Office of Sen. Shelley Moore Capito Capito

Government and industry officials see big things ahead in plastics and petrochemicals for the Appalachian region of the United States.

U.S. Senators Shelley Moore Capito and Joe Manchin and U.S. Representative David McKinley — all from West Virginia — met with reporters on May 18 in Washington to mark the release of a new report about Appalachia's potential from the American Chemistry Council. ACC President and CEO Cal Dooley also took part in the event.

"Energy and manufacturing are critical to growth in our state," Capito said. "With the Marcellus, Utica and Rogersville shale deposits, we have plenty of resources, and we want to keep the value of those resources in our region."

"This is a game changer for us," Manchin added. "It's a real field of dreams — build it and they shall come."

Capito, Manchin and U.S. Sen. Rob Portman of Ohio have introduced an act to assess the benefits of building an underground ethane storage and distribution hub in central Appalachia. Ethane is derived from natural gas and can be converted into plastics feedstock ethylene.

Manchin and Capito also have sent a letter to Gary Cohn, director of the National Economic Council, encouraging him to examine the benefits of the storage hub.

Office of U.S. Sen. Joe Manchin Manchin

"We began three years ago with the idea of storing ethane in the Northeast instead of on the Gulf Coast," McKinley said. "If we can engage more states and get [the ethane hub] in the infrastructure bill, I have a lot of confidence that we can get it done."

ACC's report describes a scenario with a storage hub for natural gas liquids and for chemicals such as ethylene and propylene, as well as a 500-mile pipeline network for the four-state area of Ohio, West Virginia, Pennsylvania and Kentucky. Appalachia generally is considered to cover parts of those four states.

By 2025, this scenario could create 100,000 permanent new jobs in the region, according to the 28-page report. The ACC analysis also projects a $32.4 billion investment in petrochemicals in the region and a $3.4 billion investment in plastic products. This would include polyethylene resin being made at three ethane crackers and polypropylene resin being produced at two propane dehydrogenation (PDH) locations.

Shell Chemical Co. already is in the early stages of construction on a massive petrochemicals plant in the Pittsburgh area that would include more than 3 billion pounds of annual PE production. Several new ethane crackers and production units for ethylene and PE also are being built in Texas and Louisiana because of newfound supplies of natural gas in that region.

Total investments projected in Appalachia by ACC also could lead to $2.9 billion in new federal, state and local tax revenue annually.

"In the last 10 years, [the United States] has gone from high-cost to being among the lowest-cost producers of chemicals in the world, because of natural gas and hydraulic fracturing," Dooley said at the May 18 event. "We've got 300 new chemical facilities on the board [in the U.S.] with half of them started or completed."

"This is a once in a lifetime opportunity to further expand our base by capitalizing on gas formations," he added. "We've got a competitive advantage globally, and the nice thing about the Appalachia region is that it's close to the manufacturing center of the U.S., including the auto sector and the upper Midwest."