Northeast Next to Boon Pending Infrastructure

The northeast’s critical pipeline infrastructure is sparsely strewn about the region and lacks full capability to provide for the region. With its large, and growing population, as well as its proximity to huge domestic reserves like the Marcellus and Utica shale reserves the northeast is poised for pipeline expansion. A Petrochemical whitepaper takes a look at the landscape for 2019 and 2020-2025 and the unique advantages and challenges the region presents. What is certain is that the northeast’s energy potential is yet to be fully realized and a robust natural gas industry could fulfill energy and economic needs for the region.

Northeast advantages:

  • The northeast is strategically located amongst numerous natural gas reserves including the Marcellus and Utica shale reserves and is also relatively close to the Rogersville reserves, sizes of which industry experts are not yet sure.
  • Manufacturing markets are abundant in the Midwest, East Coast, and Canada.
  • The scale of natural gas pipeline and power plant projects will guarantee significant employment opportunities throughout the region.
  • Ethane rejection can be avoided because of the northeast’s capabilities to make use of ethane.

Northeast and Ethane:

When transporting natural gas many pipeline companies and operators must burn off ethane in the gas stream to fuel the resources’ movement towards its destination because of lacking ‘hubs’ to connect supply and demand points. The northeast already has a number of these hubs and a viable ethane market. Industry experts anticipate an increase in the production and monetization of ethane thanks to these capabilities. Additionally, experts see the northeast’s use of ethane as an opportunity to kick start the proliferation of ethane utilities across the nation. The northeast has the chance to benefit from and create an energy trend.

Tri-State Shale Agreement

The Tri-State Shale Agreement, comprised of Ohio, Pennsylvania and West Virginia, was extended through 2021 for the states to work together to develop shale and natural gas resources afforded to them through the Marcellus and Utica shale reserves.

With more than 70% of North American plastics customers within a 700-mile radius of Pittsburgh, Pennsylvania prioritizing development in this area is key to long-term success. It seems that the states themselves recognize that no matter where central development takes place it will be a boon for the entire region. This agreement has done a good job at pushing actual cooperation and its extension into 2021 is an encouraging sign.

Employment Impact

Recently announced and commissioned projects have opened a magnifying lens on the employment opportunities associated with such large projects. Some of the most recent announcements include a Shell Cracker in Beaver County, Pennsylvania, a PTT Global Chemicals plant in Belmont County, Ohio and a Braskem location in Wood County, West Virginia.

If the aforementioned projects move forward and go on to produce as estimated researchs anticipate 25,000 direct jobs, 45,000 indirect jobs and 32,000 payroll induced jobs. Three projects alone could create 100,000 jobs and nearly $6 billion in payroll.

Since 2010 333 shale – related projects have been announced and cumulatively valued at $202 billion. It is obvious that these undertakings can give any region a facelift.

Infrastructure Updates

To ensure that projects like these are feasible and transportation of natural resources is guaranteed the report acknowledges updates that need to be made to the current transportation methods. Delivered costs are often dependent on location and logistics, which have increased thanks to reliance on rail transportation particularly in the northeast.

To overcome expense challenges the northeast must prioritize pipelines for delivery which should help ease some of the communication, forecasting, and timing troubles industry members have noted.

Conclusion

Northeast natural resources remain largely under-utilized. While the opportunities being realized throughout the other regions of the country are certainly worthy of celebration the energy industry must realize just how fickle some opportunities can be. To advance the United States’ energy agenda the northeast must be utilized like the rest of the country. Critical infrastructure must continue to be a priority for the local, state and federal governments.