The Opportunity

According to the American Chemical Council, over the past decade, roughly $200 billion dollars of new chemical project investment has been announced as a result of increased U.S. natural gas production. Eighty five percent of the increased natural gas production in the U.S. has come from Shale Crescent USA. However, nearly all the new chemical investments have occurred on the Gulf Coast where there has been very little increase in natural gas supply.

Chart 1

For decades, the Gulf Coast has been the major oil and gas producing region in the U.S. and therefore the low cost supplier of natural gas and ethane. Today, Shale Crescent USA (comprised of Ohio, West Virginia, and Pennsylvania) is the major producing region in the U.S. and is now the low cost supplier of natural gas and ethane. This surprising and unprecedented shift in natural gas production began in 2008 in the Shale Crescent USA which sits atop the Marcellus and Utica Shale formations.

Chart showing Shale Crescent accounts for 85% of the growth

Virtually All of the Growth in natural Gas Production from 2008a–2018 is from Shale Crescent USA

The Shale Crescent USA has surpassed Texas in natural gas production.

Marketed Natural Gas Production

The U.S. is now the world’s number one producer of natural gas surpassing Russia, Iran, Qatar, and China.  The Shale Crescent is responsible for 85 percent of the growth in U.S. natural gas daily production over the past ten years and now accounts for nearly one-third of U.S. natural gas annual production.

Chart 4

Nowhere else in the world, can you build directly on top of the feedstock and in the center of consumer demand. This creates a world class opportunity for petrochemical profitability.

Chart 1

Market Proximity

  • 50% of the U.S. Population is within a day’s drive
  • 70% of North America Polyethylene demand is within a day’s drive*
  • 77% of North American Polypropylene demand is within a day’s drive*

*Source IHS Markit

By locating new projects in the Shale Crescent USA, petrochemical companies have the opportunity to increase profitability, diversify America’s petrochemical industry, and thus bolster national security. While hurricanes threaten the nation’s largest petrochemical center on the Gulf Coast, the Shale Crescent region offers a more insulated, affordable alternative to supplement production. In fact, a second petrochemical hub in the Ohio River Valley could have helped shield American consumers from the ripple effect caused by Hurricane Harvey, which “paralyzed” the Gulf Coast’s supply channel, disrupting the nationwide supply chain and ultimately raising prices for many plastic-based consumer goods.

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