Since the development of the Marcellus shale, we have known that West Virginia and the Appalachian Region offer significant economic advantages for petrochemical investments. Simply put, we have the most abundant and cheapest feedstock in the world, and petrochemical decisions (and profits) are largely based on feedstock availability and costs.
Importantly, Shale Crescent USA recently released a new study by IHS Markit that quantifies and corroborates that view. A new $3 billion ethane-to-ethylene-to-polyethylene facility in the Appalachian Region would generate $3.6 billion more in pre-tax profits over 20 years compared to a similar facility in the Gulf Coast.
You can read my Op-Ed about the study here … Study Verifies Appalachia’s Petrochemical Advantage
But to add a little more oomph to the findings, realize that a $10 billion facility — more in line with the two chemical plants currently under development — would generate $12 billion more in pre-tax profits over 20 years in Appalachia based on the IHS Markit study. Also remember these facilities will likely operate well past 20 years, offering even more return on that investment.
West Virginia, as we’ve known for some time now, is the place to be for new petrochemical investments.
Energy Speaks — Creating Jobs in West Virginia and Appalachia
I recently represented the natural gas, chemical, and manufacturing industries during an Energy Speaks event for the Mid-Ohio Valley Chamber of Commerce in Parkersburg. The talk — “Creating Jobs and Economic Growth in West Virginia and Appalachia” — focused on needed infrastructure projects, from pipelines to crackers to underground storage facilities.
When asked for a take-home message, I said, “This is a marathon … not a sprint. And in fact, it’s a steeplechase marathon.”
You can see a video and coverage of the event here … Local Leaders Learn about Oil and Gas Industry
And a subsequent interview here … The Future of the Oil & Gas Industry in the Mid-Ohio Valley
CAZ Growing WV’s Economy from the Top Down and Bottom Up
Everyone who knows CAZ well knows we work with the WV Development Office and many other groups across the state to create large numbers of jobs and bring substantial investments to the Mountain State. Think tens and hundreds of millions in investments and dozens of jobs (Kureha, US Methanol, various expansions for existing manufacturers) to billions in investments and hundreds of jobs (cracker facilities, other shale-related investments, Appalachian Storage and Trading Hub).
CAZ is not only growing the state’s economy using the more traditional, top-down approach, but is using an entrepreneurial, bottom-up approach as well. In fact, CAZ is working with TechConnectWV, INNOVA Commercialization Group, West Virginia Regional Technology Park, the Charleston Area Alliance, and many others to assist entrepreneurs and start-ups in traditional and green chemistry, energy, biotechnology and more, through its ChemAssist program.
Over the last several years, CAZ has:
- Assisted over 53 companies (from 1-person start-ups to 100+ employees)
- Helped facilitate almost $3 million in follow-on funding
- Helped retain 30+ jobs and created at least two jobs
And we are creating opportunities for new jobs, much needed innovation, and future growth and diversification for the Mountain State.