The impact of shale oil and gas kept Eagle Manufacturing Co. in the U.S. — and it could do the same for other firms as well.
Eagle, a maker of plastic safety products in Wellsburg, W.Va., was struggling with foreign competition in the early 2000s but was able to turn things around when shale gas and oil provided low energy costs and low-priced plastic resins as resin makers expanded.
"It was tough to compete," former Eagle President and CEO Joe Eddy said Oct. 22 during the 2020 Global Plastics Summit. "The country lost a lot of jobs, but we decided to stay instead of moving our production to China.
"We didn't move, and now we're more profitable than ever. We're more cost-effective and competitive, and China's labor rates are increasing," he said.
Eagle was acquired in early 2018 by Justrite Manufacturing, with Eddy retiring in early 2019. He said shale continues to hold a lot of promise for manufacturing in the Ohio, Pennsylvania and West Virginia area.
"A manufacturer can build a plant in the midst of the largest market on top of feedstock and in a low-cost energy area," Eddy added. "The main thing is offering reduced energy costs and raw material costs to plastics processors."
The Appalachia region of those three states has benefited from development of the Marcellus and Utica shale fields. The combination of horizontal drilling and hydraulic fracturing (fracking) has allowed the development of feedstocks that previously couldn't be reached.
As a result of shale development, the U.S. now is producing more energy than it did in the 1970s, according to Jerry James, president of energy firm Artex Oil Co. of Marietta, Ohio, and co-founder of Shale Crescent USA, an organization that's been promoting the region.
"Wind and solar only make electricity, but [shale oil and gas] makes 5,000 products," he said.
Shell Polymers is building a major complex in Monaca, Pa., near Pittsburgh, that will include more than 3 billion pounds of polyethylene resin capacity. That plant is more than half completed. PTT Global Chemical of Thailand has plans for a similar complex in Dilles Bottom, Ohio, but hasn't made a final investment decision.
"We need the Shell plant finished and other plants behind it so customers can see what they can do," said Greg Kozera, Shale Crescent USA's marketing director. He added that technology that the Shell plant will use will reduce its environmental impact.
"If you care about the planet and the environment, you should encourage plants like the Shell plant to be built in other places," he said.
Eddy agreed, saying that having resin made close to processors, instead of having ethane feedstock shipped to the Gulf Coast by rail car and then shipped back as resin, will lead to "a huge carbon footprint reduction."