West Virginia Executive Spring/Summer 2020 | Page 35

Within Reach The Appalachian Petrochemical Renaissance SAMANTHA CART Appalachia’s evolving energy landscape offers significant potential for helping the U.S. maintain its position as one of the world’s top oil and natural gas producers and exporters. Part of this potential lies in the petrochemical industry. Natural gas liquids (NGLs) like ethane and propane are key feedstocks for the petrochemical industry, and the resulting petrochemicals, including acetylene, benzene, ethane, methane, propane and hydrogen, are obtained from the cracking and processing of oil and natural gas. This makes Appalachia— and West Virginia—a gold mine for revitalization. The shale gas revolution has produced abundant, affordable natural gas and NGLs in the Appalachian region, and because American manufacturing relies on a steady source of petrochemicals to produce everyday items from plastics, paints, solvents, antifreeze, batteries and automotive parts to phones, clothes, soap, detergent and bedding, this surplus has the potential to create a surge in petrochemical and manufacturing opportunities. According to the American Chemistry Council, the country’s $528 billion chemical industry, which provides 12 percent of the world's chemicals, supports 25 percent of the U.S. GDP and 529,000 American jobs. While most U.S. petrochemical production has historically occurred in the Gulf Coast region, the Marcellus and Utica shale plays have turned the tide, and Appalachia now produces more than 32 percent of the country’s natural gas and 600,000 barrels of NGLs per day. This growth creates the opportunity for a renaissance of the Appalachian petrochemical industry, and many energy leaders believe this renaissance is within reach, including Steven Winberg, the U.S. Department of Energy’s assistant secretary for fossil energy. “The first cracker was built in West Virginia, just east of Charleston,” says Winberg. “That is why we call it a renaissance—because this industry got its start in West Virginia. The Appalachian region is responsible for 85 percent of the growth in U.S. natural gas production in the last decade, and that is why companies like Shell and PTT Global Chemical America are looking to invest in multibillion-dollar crackers in West Virginia, Ohio and Pennsylvania.” This renaissance relies on building and maintaining critical infrastructure, including NGL transportation and storage, better roads and top-notch broadband. This could lead to $36 billion in capital investment, $28 billion in economic expansion, $2.9 billion in annual tax revenue and 101,000 jobs in With the addition of the Marcellus and Utica shale plays, Appalachia now produces more than 32% of U.S. natural gas and 600,000 bbls per day of NGLs. This creates an opportunity for a renaissance of the Appalachian petrochemical industry. Critical to this renaissance is NGL transport and storage, as well as petrochemical infrastructure. Source: West Virginia Department of Energy WWW.WVEXECUTIVE.COM SPRING/SUMMER 2020 33