November 2017, Vol. 244, No. 11

Features

Bringing Manufacturing Jobs Back to America

A little over two years ago at an energy conference in Abingdon, VA, Gov. Terry McAuliffe was clearly excited about planned pipelines that would bring Marcellus and Utica natural gas to eastern Virginia. He declared, “We will use the natural gas in these pipelines to bring manufacturing jobs to eastern Virginia.”

Being from West Virginia that hit me like a ton of bricks. That is West Virginia gas that Virginia will be using! So why can’t West Virginia use its abundant natural gas to create manufacturing and petrochemical jobs there instead of sending it all out of state as it did for decades with timber and coal?

About the same time as the governor’s speech, a group of business and economic development leaders in Marietta, OH came to the same realization about natural gas leaving their state instead of helping create manufacturing and petrochemical jobs in the Buckeye state. They decided to do something about it and formed Shale Crescent USA, a non-profit, non-governmental organization to brand the region and promote the Mid-Ohio Valley. Their vision is to enhance the quality of life and standard of living for those living in that region by encouraging manufacturers to come and use the cheapest, most abundant natural gas in the industrialized world.

They remembered that oil and natural gas had created prosperity for the Mid-Ohio Valley on two other occasions. The first occurred in the late 1800s with the discovery of shallow, abundant oil and natural gas fields in Ohio and West Virginia. This led to development of much of the early industries, including  glass and petrochemicals. The second boom came after World War II. Long-haul pipelines built during the Great Depression and war brought natural gas from the Gulf Coast into the region. This created the manufacturing and petrochemical boom of the 1950s, ’60s and early ’70s.

Following the Arab oil embargo of the 1970s and the “energy crisis” we experienced until 2010, many of these companies moved overseas or to the Gulf Coast where energy was more accessible, abundant and cheaper. This created “the Rust Belt.” The remnants of this period remain evident with many of the factories being repurposed or standing vacant.

The world has changed again. Not only are the Marcellus and Utica shales the largest natural gas fields in the world,  they account for nearly all of the recent growth in U.S. natural gas production. In 2010, the Northeast provided just 3% of U.S. natural gas supply. That number now exceeds 30% and by 2020 is projected to reach 35%. If eastern Ohio, northern West Virginia and southwestern Pennsylvania formed a country it would be the world’s third-largest natural gas producer. This region produces more natural gas than Texas. As a result, the Northeast is fast becoming the “Saudi Arabia of the world” for natural gas liquids, the feedstock of the petrochemical industry.

It has these unparalleled advantages to offer the largest energy users in the world:

• Access to one of the world’s largest natural gas supplies from the Marcellus and Utica
• The lowest natural gas prices in the industrialized world
• Abundant fresh water for transportation and processing
• Over half of the U.S. and Canadian population markets are within a day’s drive
• Welcoming communities that want industry there
• Shale Crescent USA firmly believes that high-wage, permanent jobs and prosperity can return to the region.

A small country that is economically dependent on a single export commodity, such as bananas, is how Free Dictionary defines “banana republic.” Southern Ohio and West Virginia don’t have any bananas but they do come close to that definition. For decades, they exported coal and timber and also had a booming chemical industry and a strong glass industry. With coal on the decline, the glass and steel industries almost gone and many chemical plants closed, natural gas is their next big export item. Will it become southern Ohio and West Virginia’s answer to bananas?

As part of its marketing efforts, Shale Crescent USA sponsored the opening night reception last spring at World Petrochemical Conference (WPC) in Houston at which over 1,300 leaders from more than 600 companies and 50 countries attended. For three days, Shale Crescent USA met with nearly half of their target market – the top 100 energy consumers in the world. They learned first-hand the state of the petrochemical industry and where experts see it going. They also were able to showcase the many advantages the Shale Crescent region can offer.

Not all of the attendees were thrilled at the prospect of the Northeast developing the petrochemical industry at such a high level. One individual told a Shale Crescent representative, “You don’t need to be building any petrochemical plants in the Northeast. We already have the infrastructure on the Gulf Coast. Just send us your natural gas and liquids, and we’ll take care of the rest.” Shale Crescent USA’s response was, “We don’t intend to become a banana republic.” Can Shale Crescent USA really keep this from happening?

Since the WPC, Shale Crescent has been to a number of conferences, including the Global Plastics Conference in Chicago, and featured in publications like Global Trade, Site Selection Magazine and the New York Daily News. In addition, members have been guests on over 40 radio shows from Boston to Seattle, including several nationally syndicated shows. The message is getting out.

So the answer is yes. It is amazing what a small but motivated group with a vision can accomplish by working as a team dedicated to winning.  The success of the Shale Crescent region is more important than the glory of Shale Crescent USA or any of its members.

This team mindset helps make Shale Crescent USA different and hopefully successful. Since our vision is to attract jobs for the entire region, it doesn’t matter which side of the river or community a company chooses as long as they do come and bring good jobs with them. Being non-profit and non-governmental prospects know we are not promoting a particular state or community. We are strictly there to help those prospects without cost to them.

This is also our attitude in working with state or local economic development people. We are only there to support their efforts, not to steal their prospects. It is all about the vision being achieved.

Shale Crescent USA’s role is primarily to market the region. There are infrastructure needs critical to attracting the petrochemical industry. This includes a regional storage hub similar to the Gulf Coast for ethane and other liquids, and will require technology, financing and pipelines. Even though natural gas is abundant, additional pipelines are needed to move gas to specific sites or areas where gas supply is restricted. Workforce development is another critical need. Industry, universities and community college systems in Ohio and West Virginia are working hard to train the workforce of the future.

An advantage of being non-governmental is that Shale Crescent USA can move quickly to take advantage of marketing opportunities by exhibiting at relevant conferences and being active in print media, radio and online marketing. Marketing successes have resulted in the beginning of the sales process.

We have been blessed with abundant energy resources in the U.S. After years of a scarcity mentality, we need to adjust to the fact that the U.S. is now the energy gorilla of the planet. According to the federal Energy Information Administration (EIA), the U.S. has been the leading oil and gas producer for the last five years. The world recognizes this. We saw at the Houston conference that the petrochemical industry is returning. At least 11 ethane crackers have been announced or are in various stages of construction in the Gulf Coast region. Even Saudi Arabia is investing in U.S. petrochemicals.

The Northeast (Shale Crescent region) is the next logical place for this growth. There is already one cracker plant being built by Shell in the region. Hurricane Harvey pointed out the danger of having all our eggs in the Gulf Coast basket when 70% of the Gulf Coast petrochemical plants were shut down, effecting the entire country. It has taken months to get back to normal. The Shale Crescent has abundant, economical natural gas and liquids, access to water for transportation and processing, and proximity to U.S. and Canadian markets. The energy world has changed and now you know. Shale Crescent USA wants to ensure that  the rest of the world knows.

Author: Greg Kozera is the Director of Marketing for Shale Crescent USA www.shalecrescentusa.com. He has over 40 years of experience in the energy industry. He is a leadership expert with a masters in Environmental Engineering and the author of four books and numerous published articles.