that by 2025, the investment will create and support 317,000 jobs and $ 76 billion in tax revenue annually. The Gulf Coast investment is well underway, with 53 percent completed or under construction.
Recognizing Potential for the Appalachian Region
The Appalachian region is a superb location for increased chemical and plastics capacity. The Marcellus and Utica shale formations are among the world’ s largest-known reserves of natural gas, and the Rogersville formation in Kentucky is another potentially significant resource. These formations are rich in NGLs, making them especially valuable to chemical manufacturers. The region is near manufacturing markets in the Midwest and along much of the East Coast— key customers for chemical and plastics products. All of this adds up to an exciting opportunity for growth.
“ The Appalachian region has distinct benefits that could make it a major petrochemical and plastic resin-producing zone,” says ACC President and CEO Cal Dooley.“ Several companies have already announced investment projects, and there is potential for a great deal more.”
Shell’ s petrochemical complex in Potter Township, PA, is a prime example. According to Pennsylvania Governor Tom Wolf, it is the largest industrial investment in the state since World War II.
There is a clear opportunity to create economic value and jobs by encouraging petrochemical manufacturers and their downstream producers to locate in the quad-state region of West Virginia, Pennsylvania, Ohio and Kentucky. The supply chains of other manufacturers and services would grow in response to the expanded petrochemicals capacity. Increased business activity and hiring would boost household earnings, supporting additional spending and re-energizing local economies.
An ACC report quantified these potential economic benefits. It found that the quad-state region could attract $ 36 billion in new chemical and plastics industry investment and create 100,000 permanent new jobs by 2025, including 25,700 chemical and plastic product manufacturing jobs, 43,000 jobs in supplier industries and 32,000 jobs in communities where workers spend their wages, along with $ 2.9 billion in new federal, state and local tax revenue annually.
Building the Appalachia Storage and Trading Hub
Those seeking to map the region’ s economic future are asking how to make it happen. What would enable the chemical industry and other manufacturers to take the area’ s economy to the next level?
One of the answers is energy infrastructure— specifically, a storage facility and pipeline distribution network for NGLs and intermediates. This type of infrastructure would give companies ready access to the resources needed for significant and sustained growth— the kind that leads to high-paying jobs and supports a chain of supplier industries in the region.
What has been proposed is a large-scale infrastructure project in which up to 100 million barrels of NGLs would be stored in a system of underground caverns, salt caves and other nonporous formations. In addition, 3,000 miles of pipelines would move intermediates to industries along a 454-mile corridor in West Virginia, Pennsylvania, Ohio and Kentucky.
The Appalachia Storage and Trading Hub is in the conceptual stage but quickly gaining momentum. It took a big step forward earlier this year when Appalachia Development Group, LLC was invited to submit a Part II Application under the U. S. Department of Energy’ s Title XVII Loan Guarantee Program. The invitation was for a $ 1.9 billion loan guarantee to support the development of infrastructure for the hub. It’ s the first of several steps in the process to secure a conditional commitment and final loan agreement.
Benefiting the Entire Nation
The Appalachia Storage and Trading Hub is a vital infrastructure project that could help strengthen the U. S. economy and improve energy and national security. Increased natural gas production in the Appalachian region enables the nation to use more ethane domestically, some of which could be sent to the Gulf Coast region via pipeline in order to support new chemical and plastics industry investment projects there. The new investment enhances opportunities to export chemistry and plastics, which can improve the U. S. trade balance.
Leading the Way
West Virginia lawmakers are championing the hub’ s development. Senators Shelley Moore Capito and Joe Manchin along with Senator Sherrod Brown of Ohio are sponsoring the Capitalizing on American Storage Potential Act, Senate Bill 1337, which would ensure eligibility for regional NGL storage hubs under the Department of Energy’ s Title XVII Loan Guarantee Program. Congressmen David McKinley and Evan Jenkins are co-sponsoring House Bill 3143, and Capito has introduced the Appalachian Energy and Manufacturing Infrastructure Revitalization Act, which would reform federal permitting for energy infrastructure.
State officials are engaged. A resolution highlighting the hub, its significant economic potential and supportive legislation and policies has been introduced in the legislatures of West Virginia and Kentucky. Similar resolutions are in the works in nearby states. Meanwhile, governors in the region are advocating for the hub.
ExEdge
West Virginia has a long history of manufacturing, producing everyday items from spark plugs and tableware to charcoal and kitchen cabinets.
Source: www. westvirginia. gov
Defining the Next Steps
The Appalachia Storage and Trading Hub could spur growth in the chemicals, plastics, refining and downstream manufacturing industries while providing out-of-work coal miners with new job opportunities. It would require thousands of skilled workers and a variety of STEM-related skills ranging from geology and pipe fitting to mechanical and chemical engineering.
“ For decades, those who have lived in and studied the Appalachian region have envisioned a thriving center of manufacturing activity, and they know that energy infrastructure— the hub— will be critical to unlocking the opportunity,” says Dooley.
The potential benefits of the Appalachia Storage and Trading Hub are crystal clear. Will it become the region’ s next success story? Stay tuned. •
WWW. WVEXECUTIVE. COM SPRING 2018
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