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Forge the Future Describes Future Course for PA Petrochemical Industry

  Winter 2017

Forge the Future Describes Future Course for PA Petrochemical Industry
By: Robert Johnson, President, ADKL, LLC


Peoples Natural Gas (PNG) and Chevron Appalachia commissioned a report titled “Forge the Future” earlier this year. It was presented by Morgan O’Brien, President and Chief Executive Officer of PNG, and Stacey Olson, President of Chevron Appalachia at the 2017 Shale Insight Conference in Pittsburgh.

Forge the Future is a comprehensive study of natural gas development in Pennsylvania including the petrochemical industry. With the Shell Cracker Facility site prepared for construction, Pennsylvania and the Tri-State region has an excellent opportunity for significant job and revenue growth from the energy industry.

The report estimates a $60 billion economic windfall and 100,000 jobs new jobs over the next ten years.

Recommendations from Forge the Future include:
• Increase gas-fired power and heating – ensuring all Pennsylvanians benefit from low-cost gas for residential and commercial/industrial users
• Create industry clusters in Petrochemicals, Advanced materials, and Datadriven Automated Manufacturing
• Increase gas exports – crucial to making gas production viable without harming gas competitive prices in PA

Forge the Future focuses extensively on the above three recommendations and provides numerous charts and data to support these initiatives. The report discusses a number of steps needed to move forward. It uses research and fact-based analysis provided by McKinsey and Company.

The report suggests a public-private sector advocacy effort to ensure Pennsylvania enacts the right policies to move natural gas development forward. Statistics are provided projecting the economic benefits of natural gas over the next ten years.

Energy development should be promoted to offset declines in Pennsylvania manufacturing. Energy growth will lead to more and better jobs, higher personal income, and more tax revenue to fund public health, safety, and human services. Ultimately, Pennsylvania citizens will have a better quality of life from the development of Marcellus and Utica Shale.

Forge the Future discusses how Pennsylvania natural gas is currently stranded due to low prices and the lack of infrastructure to move the gas to market. Since gas is plentiful across Pennsylvania, higher exports and more demand is unlikely to have any negative impacts on consumer prices.

The report discusses the importance of taking action now. Business sectors, especially the plastics industry, are currently deciding where to make long-term investments. These capital investments will be in the billions of dollars. Pennsylvania and the Tri-State region including Ohio and West Virginia must compete with other regions across the country for these investment dollars. Public policy from a regulatory and tax climate must create incentives for the industry to locate their future operations in the region.

Let us not forget about Philadelphia and Eastern Pennsylvania. With pipeline and other infrastructure in place, all of Pennsylvania will benefit through lower utility prices, higher paying jobs, and more business/personal tax revenue. Other areas of the country are moving forward. The report makes reference to the Permian basin in the U.S. Southwest where a large amount of ‘associated gas” is produced. Pennsylvania must take advantage of our economic opportunities as soon as possible.

Forge the Future sets a course and direction for the natural gas industry to follow.  This is a thorough analysis and an excellent read for all involved in the energy industry. Public officials and economic development staff across Pennsylvania are also encouraged to read Forge the Future. Data in this report supports pro-energy policies across the state.

Here is a link to the full report:

This article was submitted by:

Robert Johnson
President of ADKL LLC