July 1, 2020 Read More →

Department of Energy insists Ohio River Valley gas production will grow for decades

West Virginia Public Broadcasting: 

A new report by the Trump administration suggests the Ohio Valley’s growing petrochemical industry could be an unprecedented source of economic opportunity and growth when the county, and region, eventually emerge from the COVID-19 pandemic. But the assessment is drawing criticism from environmental groups and some financial analysts that warn the risk is growing for plastics and petrochemical manufacturers. 

The Department of Energy assessment released Tuesday makes the case that natural gas production in the region, which includes parts of West Virginia, Ohio, Pennsylvania and Kentucky, will continue to grow in the coming decades. The report argues the region is on the “cusp of an energy and petrochemical renaissance” due to the fact that gas extracted from the region is rich in natural gas liquids, including ethane, the building block of many plastics and chemicals, and the Ohio Valley’s proximity to the bulk of downstream manufacturers. 

“The trifecta of potential growth in energy, petrochemical manufacturing, and other energy intensive and advanced manufacturing brings the promise of a renaissance to the Appalachian region,” the report states. 

An analysis released last month by the Institute for Energy Economics and Financial Analysis (IEEFA), a think tank whose mission is to accelerate the transition to a diverse and sustainable energy economy, painted a much less rosy picture for the Ohio Valley’s budding petrochemical industry. 

The report focused on Shell’s petrochemical complex currently under construction near Pittsburgh in Beaver County. Once completed, the facility will include an ethane cracker and polyethylene production complex slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers, according to the company. 

The IEEFA analysis found changing market conditions, exacerbated further by the coronavirus pandemic, call into question the economic viability of Shell’s cracker plant and other investments in the Ohio Valley. For example, the prices of plastics have dropped from around $1 per pound from 2012-2016 to roughly half that today.

[Brittany Patterson]

More: Competing Reports Offer Different Outlook On Ohio Valley’s Petrochemical Future

Posted in: IEEFA In the News

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