Last week, Governor Tom Wolf, Team Pennsylvania Foundation, and the Pennsylvania Department of Community and Economic Development (PA DCED) announced the release of a comprehensive study conducted by IHS Markit, "Prospects to Enhance Pennsylvania's opportunities in Petrochemical Manufacturing". The report highlights the economic opportunities for the Commonwealth in looking at the predicted growth of natural gas and NGLs in the Marcellus and Utica shales. The state has a variety of competitive advantages such as cost and freight advantages, availability and abundance of feedstock, proximity to high-demand end use markets, current and planned infrastructure investments, skilled workforce, and a well-established plastics manufacturing industry.
The report predicts increasing production trends for both natural gas and NGLs through at least 2030, with NGL production reaching nearly 6.3 million barrels per day (b/d), with more than 1 million b/d coming from the Marcellus and Utica shale plays.
Opportunities for ethane use is favorable according to the report. Between 2026 and 2030, expected ethane production in the Appalachian area will be enough to support up to four additional ethane steam crackers in the region, not including the Shell cracker in Monaca. Propane production is also expected to increase, with multiple competing end uses, such as a heating fuel source or a feedstock for propylene, which can be used to make plastic resin.
Southwestern Pennsylvania is within 700 miles of 73% and 67% respectively of the US and Canadian demands for polyethylene and polypropylene. This has the competitive advantage of closer proximity to the market and less transportation costs than products from the US Gulf Coast and other global locations.
The analysis concludes that to maximize the potential long-term economic development facts, Pennsylvania must quickly plan and implement strategies. Possible issues to address include constraints on the pipeline capacity, not enough NGL storage capacity, increased supply of industrial-zoned sites for development, amount of time to obtain regulatory approval of NGL infrastructure projects, and ensuring the locally produced NGL feedstocks are used in the Commonwealth rather than being exported for use.
Download a copy of the IHS report and the executive summary and visit DCED's website at dced.pa.gov for more information on Pennsylvania's natural gas industry and the Shell project.