IHS Markit Study: Ohio Valley Region Will Supply Nearly Half of Nation’s Natural Gas by 2040
Natural gas liquids production in the Marcellus and Utica formations
expected to nearly double and attract petrochemical investment to Ohio,
Pennsylvania and West Virginia
The Marcellus and Utica shale formations are among the largest sources
of natural gas and natural gas liquids in the world, and their
production will increase exponentially in the next two decades,
according to an IHS Markit study released today at the World
Petrochemical Conference in San Antonio, Texas.
Natural gas from the tri-state region of Ohio, Pennsylvania and West
Virginia will supply 45 percent of the nation’s production by 2040, up
from 31 percent this year, according to the IHS study. The production of
the highly lucrative natural gas liquids ethane, propane and butane
(LPG) is expected to nearly double in the same period, accounting for 19
percent of the nation’s total by 2040, up from 14 percent in 2018, the
study shows.
The study, “Estimated Logistics Benefits of the Shale Crescent USA
Region Versus the U.S. Gulf Coast for Natural Gas and LPG” examines both
production trends and the economics of petrochemical production in the
region.
“Research continues to drive home the myriad economic advantages for
manufacturers in the Shale Crescent region when compared to other, more
traditionally accepted energy and chemical hubs,” said Wally Kandel,
spokesperson for Shale Crescent USA. “Investors are catching on that the
Marcellus and Utica Shale formations offer unprecedented benefits. There
are few other places in the world, if any, where the supply,
manufacturing facilities and end users are all in close proximity.”
The IHS Markit study, commissioned by Shale Crescent USA and JobsOhio,
quantifies for the first time the anticipated development and production
growth emerging from one of the world’s most prolific sources of natural
gas and natural gas liquids. In 2018, an IHS Markit study evaluated the
prospects for a world-scale ethylene and polyethylene plant based on
ethane feedstock in the Shale Crescent USA region.
The 2019 study says the region “will play a key role in satisfying
America’s increasing reliance on natural gas, as well as keeping energy
costs moderate. Favorable production economics place the Marcellus and
Utica shale plays amongst the most cost competitive in the nation.”
The study found that by 2020, cost advantages for the production of
various natural gas liquids in the Midwest versus the Gulf Coast are
expected to range from 6 percent to 26 percent. The savings are
impacting petrochemical company expansion plans.
“The abundance of natural gas and natural gas liquids has impacted our
project pipeline,” said Dana Saucier Jr., JobsOhio Vice President & Head
of Economic Development. “We are in conversations with companies seeking
to expand as well as construct new plants in the region. The IHS Markit
study quantifies the economic advantages of investing in the Marcellus
and Utica formations.”
“In addition to the significant cost advantages, the Shale Crescent has
the benefit of being located in an area of the country rarely impacted
by extreme weather,” Saucier said. “Investors are taking notice.”
About JobsOhio
JobsOhio is a private, nonprofit corporation designed to drive job
creation and new capital investment in Ohio through business attraction,
retention and expansion efforts. JobsOhio works with six regional
partners across Ohio: Appalachian
Partnership for Economic Growth, Columbus
2020, Dayton
Development Coalition, REDI
Cincinnati, Regional
Growth Partnership and Team
NEO. Learn more at www.jobs-ohio.com.
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