A program of the West Virginia Oil & Natural Gas Association

Benefits of Shale Gas in Appalachia Provide Promise for Future

March 6, 2017 | The State Journal

Natural gas use across the United States has seen a dramatic increase in recent years. According to the 2017 Sustainable Energy in America Factbook, a report produced by the Business Council for Sustainable Energy and Bloomberg New Energy Finance, the U.S. has experienced a 79 percent surge in shale gas extraction since 2011 and a 12 percent jump in total gas production over the past five years. As the Factbook reports, “natural gas is now the number one source of power in the U.S., contributing 34 percent of the electricity mix in 2016, up from only 22 percent in 2007.”

 

One source of natural gas exists right in our backyard. The Marcellus Shale creates a distinct competitive advantage for West Virginia manufacturers in the global marketplace. This and other shale plays will lead to increased investments, economic growth and tens of thousands of jobs. However, there are some crucial steps that must take place in order to maximize the many benefits of this supply: We need to support the construction of midstream pipeline infrastructure, particularly storage facilities and connecting pipelines, to move, store and connect that natural gas to the consumers, businesses and manufacturers that will rely upon it. Without this crucial infrastructure investment, this valuable commodity could be directed to other areas of the country — ones that already have this infrastructure in place. West Virginia cannot afford to bypass such a potentially impactful source of business and job growth.

Today, low-cost natural gas is enhancing U.S. and West Virginia’s manufacturing competitiveness in several important ways. The most immediate beneficiaries are energy-intensive industries, such as producers of chemicals, aluminum, steel, glass, cement and polymers, which enjoy a cost advantage of up to 50 percent over their counterparts in Europe and Asia. Much of those cost savings are passed to downstream manufacturers that use those petrochemicals to make everything from plastics to synthetic fabrics — and eventually to U.S. consumers who buy those products.

Without a doubt, natural gas production is transforming this state’s economy. It also has the ability to further energize our manufacturing, but only if we put the right infrastructure in place.

In the Appalachian region, the spike in production has far outstripped the existing pipeline network. Production in the Marcellus shale is booming, but producers are unable to transport natural gas to market, meaning businesses, manufacturers and consumers in West Virginia and its neighboring states are currently unable to access this plentiful domestic resource. The region will continue to suffer needless economic disadvantages unless something is done to correct the lack of pipeline infrastructure.

Thankfully, pipeline capacity could rise by 70 percent through 2020 if a number of planned pipeline projects are completed successfully. This would allow more exports from the region, which in turn would help moderate pricing discrepancies that currently exist between Appalachia and other regions. Two such pipeline projects are the Mountain Valley Pipeline and the Atlantic Coast Pipeline. The Mountain Valley Pipeline project would span approximately 303 miles from northwestern West Virginia to southern Virginia, while the Atlantic Coast Pipeline would span approximately 600 miles through West Virginia, Virginia and North Carolina. These two projects have both received draft environmental impact statements from the Federal Energy Regulatory Commissionand are now awaiting Final Environmental Impact Statements from FERC. Once received, FERC will make the final determination regarding the authorization of these important projects.

Another project on the horizon is the Rover Pipeline. This state-of-the-art pipeline will gather gas from processing plants in West Virginia, eastern Ohio and western Pennsylvania for delivery to the Midwest Hub near Defiance, Ohio, where roughly 68 percent of the gas will be delivered via interconnects with existing pipelines in Ohio and West Virginia for distribution to markets across the U.S.

These projects have the potential to create thousands of jobs in the region, and stand to greatly benefit members of the West Virginia Manufacturers Association and businesses like ours throughout the region. This — along with the current administration’s promises to cut back on needless regulation and bolster U.S. manufacturing — makes it an exciting time to be involved in manufacturing in Appalachia. We hope you will join the WVMA in discussing the importance of pipeline construction, infrastructure development and regional ethane storage facilities at the 2017 Marcellus and Manufacturing Development Conference May 2-3 at the Waterfront Place Hotel in Morgantown. Learn about the conference and register to attend at wvma.com/mmdc.

Rebecca McPhail is president of the WVMA, a role she has held since 2013. She previously served as the president of Vision Shared as well as the assistant vice president of development at Marshall University, among other positions. She resides in Huntington.

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