West Virginia is sitting on some of the world’s largest deposits of natural gas liquids—ethane, propane and butane— the development of which could be as monumental as the Middle East oil fields. Future investment estimates for the Marcellus and Utica shales run as high as $100 billion on drilling/completions and $100 billion on midstream and downstream assets over the next 10 years. Royal Dutch Shell has announced their interest in constructing an ethane cracker and polyethylene unit in Monaca, PA, validating the business platform for Appalachian Basin cracker investments and leading, hopefully, to additional cracker and downstream investment decisions from the petrochemical industry for West Virginia. According to the American Chemistry Council, a cracker in West Virginia would represent an investment of up to $3.5 billion, generating $7 billion in annual output, creating more than 12,000 jobs with more than $730 million in wages and generating nearly $95 million in state tax revenue and $139 million in federal revenue. A PricewaterhouseCoopers report for the National Association of Manufacturers says low-cost domestic natural gas will save $11 billion per year in U.S. manufacturing costs over the next 10 years and create more than one million new jobs. Low energy prices also bring energy security as long as reliable supply is sustained, reducing our dependence on imported oil and natural gas. The key part of energy security is sustaining a longterm reliable supply, which can be difficult at record low gas prices as producers plan spending cuts on drilling in dry gas areas and limit their focus to the natural gas liquids areas. The current low gas pricing fits into the cyclical nature of energy resources and is apt to change as low-cost natural gas replaces reduced coal generating capacity.
Long-Term Balance A secure energy strategy is one that supports the balanced use of all abundant, affordable resources, natural and renewable. Over-regulation, subsidies and picking supply favorites alter commercial distribution and ultimately over-value and limit supply of the favored energy resource. A balanced energy strategy will help provide security, stability and growth for manufacturers and a longterm stable market for all of our state’s natural resources. Photography by Tracy Toler and Eagle Manufacturing Company
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spring 2012
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