Kevin DiGregorio: WV shale boom a marathon, not a sprint (Daily Mail)

Kevin DiGregorio

A June 26 article in The Wall Street Journal has created a bit of a buzz in some circles in West Virginia.

The headline and subheadline say it all, perhaps. The headline? “The Shale Revolution’s Staggering Impact in Just One Word: Plastics.” And the subhead? “Petrochemicals, once simply a cheap byproduct, are powering a U.S. manufacturing boom and export bonanza.”

Of course, the article goes beyond just that. It describes a staggering investment of $185 billion for 310 new U.S. petrochemical projects with predictions of 462,000 direct and indirect manufacturing jobs brought on by the shale revolution by 2025.

So why the buzz? Because the Wall Street Journal piece never mentions West Virginia. In fact, many who are buzzing about the article take that a step further and wonder, “What is West Virginia doing to bring new petrochemical jobs to the state?”

Good question. You can rest assured that West Virginia — meaning Secretary of Commerce Woody Thrasher, the state Development Office, the Chemical Alliance Zone, the Polymer Alliance Zone, West Virginia University, MATRIC, the W.Va. Manufacturer’s Association, local economic development groups and many others — is diligently working to bring cracker plants and other new chemical and polymer facilities to the Mountain State.

You have likely heard of Braskem’s potential cracker in Wood County — which would use ethane from shale gas — and U.S. Methanol’s plans to build two methanol plants in Kanawha County — which would take advantage of methane from shale gas.

And you have likely heard of plans for a potential Appalachian Storage Hub that would enable the storage of ethane and perhaps other natural gas liquids (NGLs) along with the transportation of those chemicals from southwestern Pennsylvania down the Ohio River to Catlettsburg and along the Kanawha River into the Kanawha Valley.

What you haven’t heard are all of the other potential (and confidential) projects that many of us are working on that might lead to new facilities and high-paying STEM (science, technology, engineering, mathematics) jobs that take advantage of methane and NGLs (ethane, propane, butane) to make various chemicals and plastics.

Of course, until announcements are made — and perhaps until steel is erected — those projects not only remain under confidential wraps, but they also remain only opportunities.

I get that, but I also know that announcements will never be made and no steel will ever be erected without those opportunities.

I also know that this is not just a one-state play. Leaders in West Virginia, Pennsylvania, Ohio and Kentucky have been working collaboratively on various aspects of this opportunity, most notably the Appalachian Storage Hub, to boost investments and jobs in the larger region.

In fact, that proposed private-public partnership — and its potential $10 billion investment — has gained much traction not only in the four states but also in Washington, D.C.

(And, as an aside, companies as diverse as Shell, MarkWest, and Energy Storage Ventures are already working on ethane storage and transportation projects in the region.)

But don’t think Appalachia is going unnoticed outside of the region. A more recent article, this one by CNBC — “Appalachia Joins the Race for the Multibillion-Dollar Petrochemicals Boom” — points directly to Appalachia’s promise.

Although the Appalachian slice of the $185 billion pie is small — roughly $16 billion according to the CNBC piece — current projects have brought welcome news to the region and will spur more investments and jobs.

One of those, a petrochemicals complex being built by Shell in southwestern Pennsylvania, will result in some $6 billion in new investments and as many as 600 permanent (and regional) jobs.

Another multibillion-dollar facility is under consideration by PTT Global just across from Moundsville in Ohio. And don’t discount U.S. Methanol’s smaller, but still important, investments in West Virginia.

Still, we would like an even larger slice of an ever-growing pie.

The good news is that many think that is quite possible. The American Chemistry Council recently released a report showing the potential in Appalachia, including over 100,000 jobs and almost $36 billion of petrochemical investments.

That’s a nicer slice, but admittedly, that scenario might require the buildout of the $10 billion Appalachian Storage Hub.

In the end, the thing to remember is that this shale boom we all speak of is in many ways not a boom at all, but a shale marathon. It took more than 50 years for the Gulf of Mexico region to develop into the petrochemical hub of today.

We must have patience. Shale gas will be with us for the next 50 and maybe 100 years. Things have changed dramatically in just the last five to 10 years, and they will likely change again over the next ten.

The shale boom is indeed more of a marathon than a sprint, but even then it’s not just a really long race. Instead, it’s a steeplechase marathon full of pits and hurdles that we must — and will — overcome.

Kevin DiGregorio is executive director of the Chemical Alliance Zone cazwv.com.

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