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A chemical boom could be coming to WV

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Joe Eddy Joe Eddy

Joe Eddy is president and chief executive officer of Eagle Manufacturing Company and chairman of the board of the West Virginia Manufacturers Association.

It's 1901 and most of the world still lives in darkness. Kerosene for lighting is still a luxury. On Jan. 10, 1901, a blast of natural gas followed by a towering geyser of greenish-black crude shot up more than 150 feet out of the derrick — pay dirt — the Lucas No. 1 well in Beaumont, Tex. It produced more than 100,000 barrels per day — more than all of the other wells in the United States, combined. So many wells were drilled around it, they called it "Spindletop."

In fact, Spindletop produced so much the price of oil fell to 3 cents a barrel.  The economic impact was unprecedented. The world's navies switched from coal to oil, as did the railroads. Spindletop fueled a revolution in transportation, making gasoline cheap and widely available. In 1900, there were only 8,000 cars in the US. By 1916, there were 3.5 million. The oil Spindletop produced changed the world forever.  The massive increases in production dramatically lowered prices for oil around the world, enriching the lives of millions of consumers and making the U.S. the greatest economic and military power in history.  The East Texas oilfield where Spindletop was drilled was the largest oilfield ever developed in the continental U.S. and has produced more than 4 billion barrels.

Today in the United States, the energy industry's perfected use of horizontal drilling with multi-stage hydraulic fracturing has opened up 20 new shale fields with each having projected recoverable reserves larger than the East Texas field.  This new shale energy boom is the largest revolution to the energy sector the world has seen since Spindletop, but far bigger.  It has been stated that this boom is like finding multiple Persian Gulf fields right here in America. 

West Virginia sits right in the middle of the Appalachian Basin with two of the most prolific shale plays in the U.S.: the Marcellus and the Utica.  The Marcellus shale has the most development thus far and is considered one of the largest shale fields in the world.  One of the key benefits of the Marcellus is that it produces wet gas, containing not only methane but also valuable ethane, propane, butane and pentane.  In 2012, the Marcellus shale helped the U.S. set new gas production records, which also contributed to significantly lower gas prices.

A boom for the energy industry is also a boom for manufacturing, especially the chemical industry.  The security and stability of an affordable abundant supply of natural gas for heating, processing and as a chemical feedstock has helped make our industry more competitive in the global marketplace and has started a manufacturing renaissance.  In fact, the conditions are so favorable that it is now cheaper to produce the world's largest volume industrial chemical, ethylene, in the U.S. ($300/ton) than in Saudi Arabia ($455/ton) or Asia ($1,700/ton).  Many companies that spent decades moving chemical production to the Middle East and Asia are now leading the biggest expansion back into the United States as shale gas revives the chemical industry's economics.

The West Virginia Manufacturers Association believes conditions are right to recapture part of that chemical industry expansion back to where it started nearly 70 years ago, West Virginia.  The M2M-Marcellus to Manufacturing-Ethane Development Conference gives us a chance to showcase our state to companies interested in locating new facilities or expanding existing operations in the state.

"The conference provides an opportunity for all interested parties to gain an expanded understanding of the vast potential for ethane and ethylene related products in West Virginia," stated James Cutler, CEO of Appalachian Resins, one of the keynote speakers at the conference.  "The opportunities in West Virginia to create real value from ethylene and polyethylene on a regional basis have never been better."

Attendees to the 2013 M2M-Ethane Development Conference on March 20-21 at the Charleston Civic Center, will hear directly from industry experts, such as Cal Dooley, president/CEO of the American Chemistry Council, speaking on "Chemistry and Shale Gas-Fueling a US Mfg Renaissance"; Christopher Guith, vice president of policy of the U.S. Chamber's Institute for 21st Century Energy, speaking on "America's Changing Energy Landscape"; and Marty Durbin, executive vice president of the American Petroleum Institute, speaking on "America's Oil and Gas Industry: Investing in America."

The M2M-Ethane Development Conference highlights the potential of this chemical boom for West Virginia as it focuses on the downstream gas liquids to chemicals development opportunities for infrastructure contractors, architectural and engineering firms, chemicals and plastics processors, manufacturers, suppliers, professional firms and business development professionals, education/workforce development and especially state and local elected officials.

The M2M Conference is held in conjunction with the 34th annual West Virginia Construction and Design Expo, creating the region's largest trade show, featuring 400 exhibitors, 70 seminars and 6,000 attendees.  Attendance to the M2M Conference is free, but registration is required at www.m2methaneconference.com or by calling the WVMA offices at 304-342-2123.