Exporting Appalachia’s bountiful natural gas supplies continues to be a challenge, but the U.S. Department of Energy (DOE) said in a new report that the still-developing petrochemical industry would make productive use of the valuable resource closer to home.
The 75-page report titled, “Appalachian Energy and Petrochemical Renaissance,” provides business leaders and policymakers with an encouraging look at how petrochemicals could create a reliable hometown market for gas produced in the Marcellus and Utica gas fields of Pennsylvania, Ohio and West Virginia.
“Appalachian energy resources are among the most plentiful in the world, and the region stands poised to continue its growth as an energy producer and an important contributor to the world petrochemical market,” said Tim Thomas, federal co-chairman of the Appalachian Regional Commission, which contributed to the DOE report. “The critical policy priorities and strategic investments outlined in this report will be important to the continued economic development of the Appalachian Region.”
Only a few years ago, gas was considered a go-to replacement for coal for both economic and environmental reasons. However, environmentalists have recently scored a string of legal victories nationwide in their strategy of blocking the construction of oil and gas pipelines. The Atlantic Coast Pipeline project, which would have piped Marcellus gas from West Virginia to utility customers in Virginia and North Carolina, was canceled earlier this month when Duke Energy and Dominion Energy decided the current legal environment for pipelines was too uncertain and litigious.
Exporting liquefied natural gas (LNG) overseas remains one outlet, but the idea of using Appalachian gas to also provide both low-cost electricity and a nearby source of chemical feedstocks for local industry is considered an even greater opportunity for economic expansion. These reliable and economical assets, as well as existing transportation and pipeline infrastructure, are also an attractive incentive for investors and for companies looking to expand their operations in the United States rather than offshore.
“The Appalachian basin is perfectly suited to be a cornerstone of making that strategy a reality,” said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.
While the report did not project how many jobs might be created in Appalachia, it noted that Shell’s new petrochemical complex in Beaver County, including the ongoing construction of a key piece of equipment known as an ethane cracker, currently supported around 1,200 positions. In addition, a blossoming petrochemical industry would also create jobs in the energy sector at new factories that would use the plastics, resins and myriad other products coming out of the petrochemical plants, many of which can be transported in bulk by rail rather than requiring a new pipeline.
“The manufacturers and consumers of the industrial Midwest, New England, and the East Coast have an opportunity to benefit from low-cost energy and energy-related products, such as petrochemicals, produced in Appalachia,” the DOE report said. “This enables Appalachia and these surrounding regions to be more competitive in the national and global marketplace.”
The report also urged state and local governments to help prepare the region to host new petrochemical projects by reforming tax codes, streamlining permitting processes, and training the workforce, which already includes relatively high-skilled coal miners and can draw from existing petrochemical areas in eastern Pennsylvania and New Jersey.
“We look forward to attracting additional state-of-the-art facilities and investments like the Shell Petrochemical Complex to create a manufacturing renaissance in Appalachia, with sustained tax revenue and job growth,” said Abby Foster, president of the Pennsylvania Chemistry Industry Council.