[ industry ]
PENNSYLVANIA
Re-Energizing
the Region
WEST
V VIRGINIA
MARTHA MOORE
With the Appalachia Storage and Trading Hub, the quad-state region of West
Virginia, Pennsylvania, Ohio and Kentucky could attract $36 billion in new
industry investments and create 100,000 new jobs by 2025. With bipartisan
support, the hub mig ht be the game changer the region has been looking for.
For more than a century, the Appalachian region’s energy
resources have attracted industry to West Virginia. Robust
natural gas supplies were a catalyst for the growth of chemical
manufacturing—now the largest manufacturing industry in
the state. At $8.7 billion in annual sales, the chemical indus-
try directly provides 9,000 jobs and $790 million in payroll
across 73 establishments. It supports another 11,000 jobs in
related industries in the Mountain State.
The chemical industry could have an even greater role in
West Virginia’s economy. Thanks to growing potential for the
creation of the Appalachia Storage and Trading Hub, chemistry
could become the foundation for a broader revival in manufac-
turing and its supply chain, boosting economic activity and jobs
in the region and beyond. These would be permanent benefits,
the consequences of a structural shift anchored by the hub.
Understanding the Opportunity at Hand
This opportunity starts with natural gas. Chemical makers
use natural gas to heat and power their facilities, just like other
types of manufacturers. But they also use natural gas liquids
(NGLs) such as ethane, propane and butane as raw materials,
or feedstock. Companies take these energy molecules, break
them apart and recombine them to make chemical products.
For instance, an ethane cracker is simply a chemical facility
used to turn ethane into ethylene. Ethylene is a building block
chemical used in thousands of consumer items, such as adhe-
sives, tires and food packaging.
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WEST VIRGINIA EXECUTIVE
Chemistry touches more than 96 percent of goods manufac-
tured in the U.S., and every manufacturing industry relies on
chemistry in some way. Chemical and plastics products and
technologies are used in building and construction, vehicles,
clothing, appliances, home furnishings, sporting goods, health
care and many other sectors.
Revitalizing the U.S. Chemical Industry
Abundant and affordable domestic supplies of natural gas
and NGLs have vastly improved the competitive position of
the U.S. chemical industry, leading to a surge in investment.
Due to the lower cost of producing chemicals in this country,
companies from around the world are choosing to locate new
projects here.
Since 2010, 313 chemical industry projects cumulatively
valued at $188 billion have been announced nationwide, in-
cluding new facilities, expansions and factory re-starts. Sixty-
three percent is foreign direct investment or includes a foreign
partner. This investment could create 823,000 permanent new
jobs by 2025, according to analysis by the American Chem-
istry Council (ACC). The chemical industry accounted for 49
percent of total construction spending by the U.S. manufactur-
ing sector in 2017, outpacing transportation and health care.
Much of the new investment has been concentrated in the
Gulf Coast region, longtime center of the U.S. chemical indus-
try. So far, 210 chemical and plastics industry projects valued
at $133 billion have been announced. ACC analysis shows