Pa. governor expects gas windfall in billions
Gov. Tom Wolf said Tuesday that he is optimistic about a study that forecasts $2.7 billion to $3.7 billion in investments in natural gas liquid assets and an opportunity to attract more petrochemical manufacturing plants to Southwestern Pennsylvania.
“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,” Wolf said in a press release.
The study, conducted by IHS Markit, a publicly traded financial services company, shows Marcellus and Utica shale reserves made up 25 percent of all natural gas produced in the United States in 2015. The company expects that to increase to 40 percent by 2030.
Of the natural gas produced from Marcellus and Utica shale, 40 percent is comprised of natural gas liquids like ethane and propane, which are used in petrochemical production and plastics manufacturing.
Royal Dutch Shell Corp. is building a multibillion-dollar ethane cracker plant in Beaver County. The plant construction, which will employ about 6,000, is expected to be completed by 2021-22. The plant will create some 600 permanent jobs.
The new study points to downstream opportunities for ethane and propane producers as natural gas and liquid natural gas production increases through 2030.
“The IHS Markit forecast shows that between 2026 and 2030, the expected ethane production from the Marcellus and Utica Shale plays will be enough to support up to four additional world-scale ethane steam crackers in the region,” the report states, adding that propane gathered from Marcellus and Utica shales will be priced cheaper than from Gulf Coast markets.
The study shows estimates that “73 percent of United States and Canada's ethane demand and 67 percent of propane demand falls within a 700-mile region of Southwestern Pennsylvania.”
The Marcellus Shale Coalition praised the study's findings but applied pressure to state legislators to ease the permitting process that delays such projects.
“Pennsylvania must put in place policies that streamline permitting delays and address other regulatory challenges that we continue to face,” coalition President David Spigelmyer said in a statement. “Importantly, the report underscores the clear fact that ‘other U.S. states and regions are also competing for' these job-creating opportunities.”
Dillon Carr is a Tribune-Review staff writer. Reach him at 724-850-1298 or email@example.com.