ACC report: Appalachia could become second major US petchem center

The Appalachian region potentially could become a major US petrochemical and plastic resin manufacturing center similar to the Gulf Coast, the American Chemistry Council said in a May 18 report. “Proximity to a world-class supply of raw materials from the Marcellus-Utica and Rogersville shale formations and to the manufacturing markets of the Midwest and East Coast has already led several companies to announce investment projects, and there is potential for a great deal more,” ACC Pres. Cal Dooley said.

The report presented a scenario that included the development of a storage hub for natural gas liquids and chemicals such as ethylene and propylene, a 500-mile pipeline distribution network, and associated petrochemical, plastics, and other energy systems and manufacturing in West Virginia, Pennsylvania, Ohio, and Kentucky.

It predicted that by 2025, the four-state region could see 100,000 permanent new jobs, including 25,700 chemical and plastic products manufacturing jobs, 43,000 jobs in supplier industries, and 32,000 “payroll-induced” jobs in communities where workers spend their wages.

The investment also could lead to $2.9 billion/year of federal, state, and local tax revenue, the report said.

“The right policies are critical to realizing this opportunity,” Dooley said at a Capitol Hill release of the report, which also included West Virginia’s two US Senators—Democrat Joe Manchin and Republican Shelley Moore Capito—and US Rep. David McKinley (R-W.Va.).

Dooley cited S. 1075—The Appalachian Ethane Storage Hub Study Act of 2017, which Capito introduced on May 9 and Sens. Rob Portman (R-Ohio) and Manchin cosponsored—as “an important step forward [which] will help inform efforts to maximize America’s domestic energy and manufacturing potential.”

“Uncertainty around financing is a key barrier to the development of energy infrastructure in the Appalachian region,” Dooley said. “Policymakers can help by affirming that NGL storage and distribution projects are eligible for existing private-public financing programs. As Congress and the administration consider infrastructure modernization legislation, the Appalachian Hub should be a priority.”

ACC released the report a day after Manchin and Capito sent a letter to National Economic Council Director Gary D. Cohn outlining benefits of constructing a world-class gas liquids storage and distribution hub in the Appalachian region.

“An abundance of wet natural gas in the Marcellus, Utica, and Rogersville shale formations has recently resulted in significant announcements of new investment in the Appalachian region, particularly by the petrochemical industry. In fact, the region’s supplies of [natural gas liquids are] highly underutilized,” it maintained.

“Stakeholders in the industry and Appalachian communities are increasingly optimistic that the development of a regional storage hub could attract at least six world-scale petrochemical complexes, along with a number of smaller facilities,” the letter said.

Contact Nick Snow at [email protected].