Dennis Yablonsky was on hand when the mid-Atlantic natural gas phenomenon began. Now, he ends his career with the Marcellus Shale’s biggest acquisition yet: the Shell Chemicals ethane cracker plant in Beaver County.

The $6 billion infusion into the western Pennsylvania economy — a harbinger of a manufacturing resurgence — was one of several topics Yablonsky, former CEO of the Allegheny Conference on Community Development, discussed with The Stream in October.

“The more we use our natural gas in the region, the more of the economic value we gain from it versus shipping it all out of here,” Yablonsky said.

Now streaming: October energy updates from The Stream Team

Here are three more of our top stories from October:

New study explores how to maximize Pennsylvania’s energy economy

Pennsylvania’s future is natural gas, according to PA Forge the Future, an initiative and study by Peoples Natural Gas and Chevron Appalachia. The detailed study lays out a “road map of the region’s economic growth,” said Stacey Olson, Chevron Appalachia president.

The study found that Pennsylvania’s GDP could increase to $780 billion within a decade if the state worked on developmental strategies and overcame deep-rooted challenges.

Natural gas, agribusiness join forces for biosecurity

Biosecurity has become a paramount concern for the natural gas and agricultural industries, thanks in no small part to the pipeline boom. Improving biosecurity methods is dependent on the two industries collaborating. Sunoco Pipeline and PennAg Industries Association did just that when they teamed to develop a biosecurity and training module.

Celebrating the future of manufacturing in Pennsylvania and the U.S.

The Pennsylvania Department of Community & Economic Development once reported that the manufacturing industry “is the foundation of Pennsylvania’s economy.” The commonwealth’s manufacturing industry is the eighth largest in the nation with an economic impact of $84 billion. The manufacturing resurgence was lauded by officials recognizing the Shell Chemicals cracker plant as playing a huge part in future developments.

Shale spotlight: Natural gas in the news

Here’s a look at key energy industry headlines from October.

• Fed court says Pennsylvania town’s fracking law is unconstitutional: A federal judge in Pennsylvania struck parts of a charter passed by Highland Township, Elk County, that barred oil and gas companies from storing fracking waste in the town, saying it was preempted by federal and state law and unconstitutional.
• Expert: Shell plant part of ‘second wave’ of ethane crackers in U.S.: Shell Chemicals’ $6 billion ethane cracker being built in Beaver County isn’t just important to the tri-state region; it’s playing a big role in the U.S. petrochemical industry.
• A new domestic market opens for Marcellus ethane, via Marcus Hook: Sunoco Pipeline has begun shipping ethane by truck from its Marcus Hook Industrial Complex to domestic markets, establishing a new outlet for ethane from the Marcellus Shale. This reinforces Sunoco’s point that its Mariner East pipeline is not just about exports.
• Business and environmental groups fight federal energy bailout: Several companies are standing with environmentalists in opposing a U.S. Department of Energy plan that would reward specific energy sectors via subsidies.
• Boom in American liquefied natural gas is shaking up the energy world: The shale gas drilling boom has propelled the United States from energy importer to exporter, taking the country a giant leap toward the goal of energy independence declared by presidents for half a century.
• U.S. EPA to shrink response time for permit requests: The U.S. Environmental Protection Agency will cut response times to permit requests to within six months by the end of 2018, part of the agency’s goal to reduce regulations and delays, Administrator Scott Pruitt said.
• Thousands of new W.Va. jobs expected from roads, pipeline projects: With citizens voting to approve Gov. Jim Justice’s “Roads to Prosperity” road bond amendment and federal regulators approving two pipeline projects that will pass through the state, West Virginia will soon be flush with economic opportunities and thousands of new jobs.

The Stream: What’s in the pipeline

In the coming weeks, check back at The Stream for a story on how dogs are helping detect pipeline leaks, as well as an interview with Team Pennsylvania President and CEO Ryan Unger.

Want more updates on the natural gas industry? Sign up for The Stream’s newsletter, delivered daily to your inbox. It’s free!

For Dennis Yablonsky, the Shell Chemicals ethane cracker plant in Beaver County is more than just a $6 billion infusion into the western Pennsylvania economy. It’s the beginning of a manufacturing resurgence for the region.

“The more we use our natural gas in the region, the more of the economic value we gain from it versus shipping it all out of here,” the former CEO of the Allegheny Conference on Community Development said during a recent interview.

 

Midstream natural gas investment: More work to be done

The upstream natural gas sector has been great to Pennsylvania since 2004, when Range Resources drilled that first well in the Marcellus Shale. However, while Pennsylvania has made strides in attracting more midstream investment, Yablonsky said, there’s more work to be done in the area, especially because billions of dollars are on the table.

“It doesn’t get a lot of play, but those billions of dollars create jobs, create purchases in the supply chain and, most importantly, it creates a network that will allow us to, when we get the gas out of the ground, get it to where the users can be,” Yablonsky said.

What would help in attracting more from the midstream sector is an ethane storage hub. A West Virginia University report found several sites in the tri-state area of Ohio, West Virginia and Pennsylvania that could support such a hub.

“There’s investment that would have to be made there, but more ethane storage would be a real positive development for us on the infrastructure side as well,” Yablonsky said.

Downstream natural gas investment: The last great frontier

Pennsylvania, Ohio and West Virginia have not been the best at capturing the attention of downstream companies. It goes back to the point about natural gas use equating to a higher economic value. Yablonsky said if the desire is to have companies come to the region and stay, then as far as natural gas goes, the state needs to “use it or lose it.”

Yablonsky said Pennsylvania cannot rely strictly on wells and pipelines. “If all we do is take the gas out of the ground, separate it into its component parts, store it and then pipeline it out of here for use in other parts of the country or the world, this will be a temporary benefit that will not give us the full value we deserve,” he said.

Western Pennsylvania can get that full value, Yablonsky said, but it’s contingent on attracting more petrochemical and other downstream companies to the region. This might not be as difficult a task as it sounds. The area is lucrative to these companies, as Shell Chemicals’ investment has demonstrated, because of the proximity to desired customer bases.

“If you draw a 700-mile circle around Beaver County, you have [a radius containing] 70 percent of their customers,” Yablonsky said about one of Shell’s key reasons to locate its cracker plant in Beaver County.

Thailand-based PTT Global recently purchased 168 acres in Belmont County, Ohio, to build another ethane cracker plant. Yablonsky said PTT is locating there for the same reason as Shell: proximity to customers and resources.

The Shell and PTT investments put the region in the “first or second inning of the downstream game,” Yablonsky said, but it’s still early.

“This whole resurgence of manufacturing, as a result of our God-given natural gas resource, is a real blessing for the region,” Yablonsky said.

Looking back on natural gas growth

Yablonsky announced his retirement from the Allegheny Conference this year. Before his time as CEO, he was Pennsylvania Department of Community and Economic Development (DCED) secretary from 2003 to 2008. He has seen the natural gas industry grow from humble beginnings to one of the five key industries in Pennsylvania, according to the DCED.

What has impressed him the most about the industry is the innovation.

“The technology and processes they use today to drill wells is very different than what it was 10 years ago,” Yablonsky said. “They’re able to go deeper and wider laterals, be more precise in terms of what they’re looking for and generate more productive wells than they ever were before.”

Another thing that has impressed him is the industry’s ability to help others.

“We’ve provided a good job with benefits with a career path for people that never had it before,” Yablonsky said when talking about ShaleNET, a government-funded program to help job seekers find positions in the natural gas industry. “That’s not a story that gets told much about this industry.”

With the natural gas boom leading to more pipelines, biosecurity has become an understandable concern for the natural gas and agriculture industries. Improving biosecurity methods, however, is dependent on cooperation between the two industries.

This cooperation can challenge both sides and lead to improved efficiency and operations. It can also serve as a learning experience that showcases new ways to tackle projects.

Case in point: In 2015 as part of its Mariner East 2 pipeline project, Sunoco Pipeline partnered with PennAg Industries Association, Pennsylvania’s premier agribusiness association. They worked together to develop a biosecurity training and education module, recognizing that both sides would benefit.

Biosecurity is a serious matter. A 2015 avian flu outbreak in the Midwest affected more than 220 farms and more than 48 million birds, causing billions of dollars in losses. As a result of this outbreak, Sunoco Pipeline decided to develop a module to educate employees, contractors and vendors to prevent a pernicious effect on agribusiness.

Sunoco Pipeline and PennAg will come together Oct. 19 during the Midstream PA 2017 conference to discuss their innovative initiative. Learn more about the biosecurity module on BravoChat.

With an economic impact of $84 billion, Pennsylvania’s manufacturing industry ranks eighth largest in the nation, providing 558,000 jobs with an average salary of $60,000, according to Keystone Edge.

And that makes it cause for recognition. Pennsylvania Manufacturing Week runs Sept. 30 through Oct. 6, giving public and private officials a chance to look at the state of the industry, celebrate its successes and discuss how to continue to improve it. The week wraps up with national Manufacturing Day on Oct. 6.

“The manufacturing industry is the foundation of Pennsylvania’s economy — we have the skills, experience and knowledge to help companies succeed in the United States,” the Pennsylvania Department of Community & Economic Development (DCED) noted.

Natural gas production from the Marcellus Shale has helped to increase manufacturing in the commonwealth. Pennsylvania has been the nation’s second-largest natural gas producer for four consecutive years, with the state’s gross production exceeding more than 5.2 trillion cubic feet last year, according to the DCED.

“Natural gas usage fits into many aspects of our economy, including heat, power, downstream manufacturing and electricity generation,” the DCED said. (Related: Watch Denise Brinley, DCED senior energy adviser, talk with The Stream at Shale Insight)

The successful resurgence of manufacturing in the state was highly lauded at last week’s Shale Insight conference in Pittsburgh. The forthcoming Shell Chemical Appalachia ethane cracker plant in Beaver County will inject a multibillion-dollar investment into the state. When the facility opens in the early 2020s, it will create 600 permanent jobs.

“The supply of ethane will be a strong catalyst to making sure the manufacturing resurgence happens here,” state Rep. Jim Christiana told Shale Insight attendees during a discussion on the plant.

Another forward-looking perspective came from Jeff Logan, president of the Pennsylvania Chemical Industry Council. Logan wrote last week that by attracting petrochemical and plastic resin manufacturers, Pennsylvania, West Virginia, Ohio and Kentucky stand to gain more than 100,000 permanent new jobs, leading to an annual $2.9 billion in new taxes at all levels.

“To accomplish this, we need support from our elected officials,” Logan wrote. “By offering incentives to downstream chemical and plastics manufacturing companies, Pennsylvania can make an even bigger impact in the shale world.”

There was plenty to see and hear at this year’s Shale Insight conference. Here are The Stream Team’s 10 favorite quotes from the event:

1. “We came out of the Great Recession blessed by Marcellus Shale.”
— Kevin Sunday, director of government affairs for the Pennsylvania Chamber of Business and Industry

 

 

2. “Natural gas is good for manufacturing. It’s good for jobs. It’s a no-brainer.”
— Sean Spicer, former White House press secretary

 

 

3. “This is going to be the beginning of an incredible economic boom. This is going to happen, and it’s happening today.”
— Morgan O’Brien, People’s Natural Gas president and CEO, on natural gas development 

 

 

 

4. “Make no mistake: The supply of ethane will be a strong catalyst to making sure the manufacturing resurgence happens here.”
— Pa. state Rep. Jim Christiana on the Shell Chemical Appalachia ethane cracker plant in Beaver County

 

5. “The natural gas industry is the development of natural resources. The American workforce is a valuable natural resource.”
— U.S. Labor Secretary Alexander Acosta

 

 

6. “I would encourage anybody, if you can, to take a tour, to see what’s really going on. Don’t believe the mass propaganda.”
— Pa. state Rep. Jason Ortitay, on environmental issues

 

 

7. “The gas we’re developing right here in the Appalachian basin is leading to lower energy prices for consumers across the country.”
— Sarah Battisti, Southwestern Energy vice president of government and community affairs

 

 

8. “It’s where it’s happening in Pennsylvania. … I’m thrilled we get to come back and be as strong as we have been in the past in the industry.”
— Dr. Karen Anne Riley, Williams, on why she attended Shale Insight

 

 

9. “We have to do a better job evangelizing the good jobs that we do out there.”
— Steve Morgan, CEGEN Green Energy

 

 

10. “We’ve had hundreds of thousands of jobs already created by the shale gas revolution.”
— Dean Cordle, AC&S Inc. president and CEO

 

When Morgan O’Brien took the Shale Insight stage last week, he said something that emerged as a theme at the conference: Shale gas is Pennsylvania’s future.

“This is going to be the beginning of an incredible economic boom,” O’Brien, president and CEO of Peoples Natural Gas, told the crowd during his mini keynote. “This is going to happen, and it’s happening today.”

The evidence came by way of an initiative and study called PA Forge the Future, published by O’Brien’s company and Chevron Appalachia. Stacey Olson, Chevron Appalachia president, said the study is a “road map of the region’s economic growth” with a comprehensive, fact-based analysis of the industry.

The study sought to answer big questions: What is the full economic potential of downstream development, and what key strategies will capture it? Here are the key takeaways from the report:

GDP could increase to $780 billion within a decade

By pursuing an annual average growth rate of 2.3 percent, Pennsylvania can increase its GDP to $780 billion within 10 years. With this growth, the study reports, will come 100,000 additional jobs, a 90 percent (more than 4.5 trillion cubic feet) increase in gas demand and an estimated $2 billion to $3 billion increase in state revenues.

Increased development strategies are a must

To attain these goals, Pennsylvania must work on three key development strategies:

1. Increased gas-fired power and heating. The state will need to ensure all Pennsylvanians “benefit from low-cost gas for residential and commercial/industrial users.”
2. Clusters in petrochemicals, advanced materials and data-driven automated manufacturing. The latter, the report states, will drive GDP and job growth, while “positioning Pennsylvania as an Industry 4.0 manufacturing leader.”
3. Exports. It’s “crucial to make gas production viable, without hurting competitive gas prices in [the] state,” the report notes.

Deep-rooted challenges must be overcome

While Pennsylvania has unique strengths, including a world-class energy resource, it has challenges to overcome:

• Low-cost natural gas that is not fully reflected in retail power prices
• Topography, size and connectedness issues in the large network of brownfield sites
• An available labor pool with potential skills gaps and cost disadvantages
• A relatively limited translation of innovation into commerce, despite academic leadership in IT and engineering
• A loss of science and engineering talent due to brain drain

Private and public sectors must collaborate

Targeted statewide initiatives should be the result of partnerships between Pennsylvania’s public and private sectors, “reflecting the most important actions to attract the right companies, prioritize the right infrastructure and ensure Pennsylvania’s low-cost gas and human capital translate into competitive opportunities to realize the full potential of its world-class natural gas reserves.”

The full report can be found at http://paforgethefuture.com/.