Next step for Pa. gas industry: Attracting petrochemical companies

Jeff Logan

The shale revolution has been one of the most exciting regional energy developments of the past 50 years. Accessing the vast new supplies of natural gas and natural gas liquids (NGLs) from previously untapped deposits has created a decisive competitive advantage for Pennsylvania chemical and plastics manufacturers. The next step is attracting more petrochemical companies to Pennsylvania to spur greater investment, industry growth and job creation.

The perfect place for these companies to locate is the Appalachian region, specifically western Pennsylvania. This area is an ideal location for a second major petrochemical manufacturing hub in the United States, thanks to its proximity to upstream and midstream sources. By attracting more petrochemical companies, Pennsylvania can leverage more of the natural gas stream for value-added manufacturing.

In addition, a recent economic report released by the American Chemistry Council (ACC) shows that the Appalachian region could become a second center of U.S. petrochemical and plastic resin manufacturing, similar to the Gulf Coast. ACC’s report presents a hypothetical scenario that includes 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 energy infrastructure and manufacturing in West Virginia, Pennsylvania, Ohio and Kentucky.

The economic benefits could be substantial. 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, according to the report. The new investment could lead to $2.9 billion in new federal, state and local tax revenue annually.

To accomplish this, we need support from our elected officials. By offering incentives to downstream chemical and plastics manufacturing companies, Pennsylvania can make an even bigger impact in the shale world. This is a long-term, impactful play that will bring in companies that turn ethane feedstocks into end-use products. These companies will provide high-paying, sustainable jobs for tax-paying Pennsylvanians.

Jeff Logan

Jeff Logan is Bravo Group’s environmental and regulatory practice lead. He serves as president of the Pennsylvania Chemical Industry Council.