Gov. Tom Wolf and the Team Pennsylvania Foundation Tuesday released a comprehensive study conducted by IHS Markit on manufacturing opportunities using natural gas liquid assets and attracting additional ethane cracker plants, and petrochemical and plastics manufacturing.
The report-- Prospects to Enhance Pennsylvania’s Opportunities in Petrochemical Manufacturing-- forecasts $2.7 to 3.7 billion in investments in natural gas liquid (NGL) assets.
“Pennsylvania has a once-in-a-generation opportunity to develop and implement a strategy that will cultivate a manufacturing renaissance and transform our economy across the Commonwealth,” said Gov. Wolf. “The foundation for building a diverse and robust petrochemical and plastics industry was initiated with the decision by Shell Chemicals to invest in Pennsylvania – and we must ensure that we make the most of this chance to create good paying jobs for Pennsylvanians.”
According to the study, natural gas from the Marcellus and Utica Shale reserves accounted for a quarter of all natural gas produced in the U.S. in 2015, and is expected to account for more than 40 percent by 2030.
Additionally, 40 percent of the natural gas produced is rich in natural gas liquids, or NGLs, more than 70 percent of which is ethane and propane. Ethane and propane are two important and high-value NGLs used in basic petrochemical production and plastics manufacturing.
Pennsylvania has a significant base of existing plastics manufacturers as potential customers which IHS noted will benefit from significant reductions in feedstock costs because of their close proximity to these resources.
“The prospect that the Marcellus and Utica Shale plays can support up to four additional ethane crackers beyond Shell Pennsylvania Chemicals is an exciting opportunity for the commonwealth, as is the IHS forecast that a coordinated strategy has the potential to leverage up to $3.7 billion in investment into NGL assets alone for gas processing facilities, NGL pipelines and storage facilities,” said DCED Secretary Dennis Davin. “The study is a roadmap that will help us jump start our strategy to attract that investment.”
Davin noted the following key priorities: proactively engaging stakeholders to bring the right decision-makers and resources to the table; attracting additional infrastructure investments and petrochemical and plastics manufacturers, as well as retaining and growing Pennsylvania’s existing industry; developing pad-ready sites throughout the state to encourage investment opportunities; streamlining the development timeline and addressing potential critical infrastructure bottlenecks; and training a workforce with the right skill sets to fill future jobs created by the industry.
“The Team Pennsylvania Foundation and our board sponsored the IHS Markit study in partnership with DCED to help Pennsylvania maximize the in-state economic benefits of our natural gas resources by generating new, high-paying manufacturing jobs; attracting investment; growing the supply chain and output in the plastics sector; and generating state and local revenue,” said Ryan C. Unger, CEO of the Team Pennsylvania Foundation. “We look forward to participating in the strategic planning process as part of a cross-agency and multi-stakeholder effort to ensure that our natural resources are utilized to create jobs right here in Pennsylvania.”
In addition to Pennsylvania’s abundant supply of low-cost natural gas and NGL resources, the study also cited that Pennsylvania’s other competitive advantages – including location and close proximity to customers, existing plastics manufacturing base, robust transportation infrastructure and experience with Shell – position Pennsylvania to successfully advance this economic opportunity.
A copy of the report is available online. Visit DCED’s Natural Gas webpage for more background on the economic opportunities presented by natural gas.
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