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Having Global Impact

    December 2018 / Vol. 8 Issue 8

Saving the Planet
By: Greg Kozera, Shale Crescent USA

Is it possible for a small non-profit organization based in the Marietta- Parkersburg area to have a GLOBAL impact? YES! When the Shale Crescent USA’s IHSMarkit Study comparing an ethane cracker built here in the Shale Crescent Region to one built on the US Gulf Coast was released in March of this year at the World Petrochemical Conference in Houston, Texas it created a stir in the petrochemical industry. We spent the week meeting with petrochemical company executive level decision makers. The Study took everyone but Shell by surprise. The Shale Crescent- IHS Study confirmed Shell’s decision to build an ethane cracker in western Pennsylvania.

Shortly after our Study’s release the US Department of Energy expressed interest in it. We have done several presentations to the Department of Energy, most recently in August. The DOE folks were quick to grasp the importance. They commented, “This has nationally security and geopolitical implications.” This week The Department of Energy (DOE) released a new report to Congress on ethane storage and distribution, reinforcing the benefits of expanding America’s petrochemical asset base beyond the Gulf Coast to the Shale Crescent USA. The report refers specifically to the Shale Crescent USA brand and the IHS-Shale Crescent USA study.

Shale Crescent USA Co-Founder Jerry James said, “The DOE report solidifies the notion that diversifying America’s petrochemical manufacturing base – and investing in a second petrochemical hub in the Shale Crescent USA – would increase our global petrochemical market share, while better and more reliably fulfilling domestic demand,”. “As we watch hurricanes threaten Gulf Coast production, the Shale Crescent region offers a more insulated, affordable alternative to supplement production. This will ultimately prevent disruptions in the nation’s supply chain and keep prices stable for many plastic-based goods we rely on every day.”

The DOE report notes that more than 95% of the USA’s ethylene production capacity is located in Texas and Louisiana. Polyethylene is used in thousands of products we use every day like cell phones, computers, clothing, food packaging, automobiles and even solar panels. We can’t go an hour and not touch something made from petrochemicals. Seventy (70%) of the polyethylene demand is in our Region. These are the companies that make the products we use. Hurricanes in the Gulf Coast have disrupted the supply to these manufacturers.

Creating a petrochemical hub here creates stability in supply and price of the products we all use every day. This is similar to what we did with natural gas. Because of local supply we didn’t see natural gas or gasoline price increases during Hurricane Harvey. The price I paid for gasoline actually went down the day after Harvey hit. I recall gasoline prices going up $0.25 over-night back in 2005 when Hurricane Katrina struck the Gulf Coast.

Some additional findings in the DOE report include:

  • Ethane production in the East region, where the Appalachian basin contributes most of the production volumes, is projected to continue its rapid growth in the coming years, reaching 640,000 barrels per day in 2025 – more than 20 times greater than regional ethane production in 2013.
  • Appalachia’s abundant resources coupled with extensive downstream industrial activity may offer a competitive advantage that could enable it to displace marginal producers and help the U.S. gain global petrochemical market share.
  • Nearly one-third of U.S. activity in petrochemicals occurs within 300 miles of Pittsburgh, with over $300 Billion of net revenue, 900,000 workers, and 7,500 establishments. These are the people making the products we use every day.
  • Development of an Appalachian hub is not necessarily in conflict with Gulf Coast expansion, since Appalachian capacity may serve regional demand for natural gas liquids, freeing up Gulf Coast production for other markets, including exports overseas.

What does this mean for you and other people in the Shale Crescent? As mentioned, if a 2nd US Petrochemical Hub is created here it means price stability during times of Gulf Coast weather events. It means industry coming here creating high wage jobs, and economic prosperity. It means a higher standard of living for people in the Region. We are already seeing wage growth. It means our young people won’t need to leave the Region to find good jobs.

Our military runs on petrochemicals. A petrochemical hub here improves national security. We won’t need to rely on places like the Middle East for our back up to the Gulf Coast. Geopolitically the USA is in a position of strength when we can be a petrochemical supplier to the world. The Shale Crescent USA is essential to make this happen. Companies won’t come here to improve national security. They will come because of the improved profitability the Shale Crescent- IHSMarkit study shows. This DOE report gives additional creditability to that study.

The middle class around the world is increasing in developing nations and in countries like China and India. Along with this increase is the demand for products made with petrochemicals. In addition, world population is projected to increase 2 billion people by 2050. These people will need food, clothing and shelter. This means petrochemical demand will increase. Plants will be built somewhere. It is much better for the planet environmentally that they be built in the USA and the Shale Crescent under our environmental law. Plants built here will be the cleanest and most efficient in the world.

Recently at a public meeting on the air permit for the PTT Cracker. A friend of mine attended and told me that a man showed up wearing a parrot costume with a sign. “Polly doesn’t want a cracker.” Someone should have said, “Hey Polly, if you don’t like crackers show us what life is like without them. You can start by getting rid of your costume and plastic sign since they are both made with petrochemicals from a cracker. Next you can give us your car keys and cell phone since they both require petrochemicals. Your car is over 50% plastic.” The guy probably has no idea.

Even the anti-fossil fuel, keep it in the ground folks don’t want to give up their cars, cell phones and private jets all built and fueled by fossil fuels. They apparently don’t know that windmills and solar panels are dependent on fossil fuels. If they are really serious and honest about what they are promoting they need to show us and what life would be like without fossil fuels by setting the example and giving up fossil fuel products. We’ll all miss them on the internet.

The students at the University of Colorado understand. I was on their student radio station again last month. The student host told his listeners, “We don’t like oil and gas wells and petrochemical plants but we do like the stuff they produce. (cell phones, cars, skis, mountain climbing equipment, etc.) It does make more sense to manufacture them here rather than in places like China where there is no environmental control.”

Shale Crescent USA is working to bring a company here from Costa Rica who is recycling all grades of plastic. They turn it into a solid material that is add to cement blocks making them lighter and stronger. The blocks are being used to create much needed housing in Costa Rica. We met them at the Global Plastics Summit in Chicago last month when their company president spoke on the main stage. What impressed me is their process isn’t theory. They showed us what they can do by working with one of the largest construction materials firms in Costa Rica making these blocks for over a year. They want to expand to North America. Our waste is their feed stock. They are working closely with industry and environmental groups. Their president was interviewed recently (11/27) on WAJR in Morgantown. If you want to hear the interview you can go to www.insideshale.com

Plastic waste is a problem. Our country was sending 40% of our plastic waste to China until they stopped taking it. Not sure what the Chinese were doing with it. Most of our plastic waste goes to landfills. The process Costa Rica is using turns waste into useful products, creates jobs and improves the environment. A win for everyone.

When it comes to creating jobs, we can’t just talk. We need to act and show results. Shale Crescent USA has been on the road constantly around the country for the past two months working to make good things happen and promote our Region. As a result, we are actively working with prospects. We have scheduled meetings and site tours with companies from outside the region. We convinced them they need to be here. They are coming to the Shale Crescent USA this month to see what we have to offer.

When it comes to the environment, jobs, our Region, or your own business theory and talk don’t mean much. People need to see results. The DOE report this week supports and confirms what we have been saying. Now we need to show results if we want to be convincing. Anything short of that is just noise. Polly needs a few crackers.

A small non-profit can make a global difference. Success and the achievement of a big Dream doesn’t happen in a day. It happens by what we all do day by day.   Thoughts to ponder. Have a happy, safe and successful 2019!

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. Greg is a leadership expert with a Masters in Environmental Engineering and the author of four books and numerous published articles.