Experts project vast growth for natural gas economy
CHARLESTON, W.Va. - Experts say West Virginia's natural gas economy could see nearly six-fold growth by 2035 and revive the state's struggling manufacturing and chemical sectors.
While the state's natural gas industry has grown in recent years, driven by development in the Marcellus shale region, American Petroleum Institute executive vice president Marty Durbin says the industry has only just begun scratching the surface.
"West Virginia is poised to see a real increase in development in natural gas in the coming years here," Durbin said.
Durbin is one of several industry leaders in town this week for the second Marcellus to Manufacturing Ethane Development Conference in conjunction with the 34th annual West Virginia Construction and Design Expo at the Charleston Civic Center.
He and American Chemistry Council president Cal Dooley will be keynote speakers at a seminar this morning to discuss how investment in the American natural gas industry could drive a rebirth in the manufacturing sector.
Durbin says recent development of the Marcellus, Utica and Bakken shale regions have changed the national outlook for the oil and natural gas industry.
"There's no question that the outlook today is far different than what anyone thought it was even five years ago," Durbin said. "We're well beyond talking about energy scarcity here, it's all about abundance."
Durbin called oil and natural gas a "foundational element in the economy." He said properly developing the natural gas extraction industry in the state, leaders can see further development in other related industries.
"This is a real opportunity for the chemical industry to build in this area, because natural gas is their mother's milk," Durbin said.
"This is an incredible opportunity," he said. "By developing this resource, you've now got the opportunity to bring manufactures here."
According to an IHS Global Insight study, nearly West Virginia's oil and natural gas industry accounted for 11,900 direct and indirect jobs in 2012. By 2035, the firm projected employment could grow to more than 58,000.
The amount the industry adds to the state economy is also projected to grow nearly six-fold.
Last year, the oil and natural gas industry boosted the state's economy by $1.6 billion. By 2035, that impact is expected to grow to nearly $9.4 billion.
Much of that growth will be fueled by the chemical, plastics and manufacturing plans that should crop up around the region.
"It's great to have the energy production here, but it's the additional development that it will bring with it that will really bring dividends to a state like West Virginia," Durbin said. "I don't think that it's going to far to say that this could be the rebirth of the rust belt."
Durbin said the only potential headwinds for the industry are federal regulatory and tax policies.
He said the industry as a whole pays about $85 million each day in taxes, fees and royalty payments to the U.S. Treasury.
With Congress struggling to find a way to fix the nation's fiscal problems, he said Washington leaders needed to make sure any new policies won't hinder future investment in the industry.
"We need to make sure we're taking full advantage of the opportunities we have, not only to provide a reliable and affordable source of energy for all those industrial users and residential users, but to continue helping create those jobs and develop the economy," he said.
Contact writer Jared Hunt at email@example.com or 304-348-4836.