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Shale gas creates massive advantage for WV

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Karen Facemyer Karen Facemyer
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  • Changes to the oil, gas industry create benefits, concern

    Changes to the oil, gas industry create benefits, concern

    Sunday, August 31 2014 4:00 PM EDT2014-08-31 20:00:17 GMT
    Robert N. Hart
    Robert N. Hart

Karen Facemyer is president of the Polymer Alliance Zone and a former state senator from Jackson County.  

In the early 1990s the cost of natural gas, while fluctuating, hovered around $2.50-$3.00 per thousand cubic feet. Throughout a majority of the 2000s, due to the perceived lack of supply and other factors, the cost rose significantly, rising at times to $14 per MCF or more.

The instability in gas costs helped drive America's chemical industry overseas, and with it millions of American jobs. 

With the recent technological improvements in natural gas drilling and the discovery of the Marcellus and Utica Shale gas fields, America and West Virginia are seeing a new dawn for our manufacturing sector.  

Cal Dooley, president and CEO of the American Chemistry Council, recently said the United States has gone from being the highest-cost major gas producer four to five years ago to the current lowest cost producer. extensive shale gas deposits have flipped the cost equation. 

And West Virginia's plastics industry will be a major beneficiary of this new found gas supply.  Derivatives of natural gas — ethane and propane — are used to make plastics and comprise a major piece of the industry's cost puzzle. As feedstock prices decline due to the new-found gas supply, our plastics and chemical industries become more competitive.  

Members of the Polymer Alliance Zone — plastics industry companies in West Virginia — are experiencing great demand for their products across the globe. West Virginia's plastics industry saw record export growth in 2011, accounting for over a billion dollars and 11.6 percent of all state products exported, according to information released by state Division of Commerce.

During this time period, the plastics industry was the second-largest exporting segment in the state behind coal, which accounted for $5.3 billion in exports. West Virginia plastics companies exported products to more than 60 countries in 2011.  The top 10 markets were Canada, China, Belgium, Japan, Mexico, Hong Kong, Korean Republic, Brazil, Germany and the Netherlands. Of the top 25 markets for plastics exports, the markets exhibiting the largest growth from 2010 to 2011 were Israel, Italy, Russia, South Korea and Peru.  

Of the more than 20 categories of plastic products being sold, the largest are polyether/expoxide, polyamides and olefin primary. These sectors account for 66 percent of the products exported in 2011.  

With the cost advantages anticipated by shale gas production, it is our expectation that the future of West Virginia's plastics industry is extremely bright.  The Polymer Alliance Zone — an economic development organization that works to market the plastics industry in Wood, Mason and Jackson counties specifically and to recruit plastic-related companies to locate in the state — will continue our efforts to facilitate the growth of this vibrant industry. 

As such, we would like to encourage participation in the upcoming Marcellus to Manufacturing (M2M) Ethane Development Conference, taking place in Charleston March 20-21.  The event will provide information on how to take advantage of the opportunities the shale gas boom offers to our state and region.  

For  information on the event, or to register, visit www.m2methaneconference.com.