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Braskem challenges and the Shale Gas industry

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Brooks McCabe Brooks McCabe
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Sen. Brooks McCabe, D-Kanawha, is managing member and broker of West Virginia Commercial LLC. He has been involved in commercial and investment real estate for more than 30 years, and he also is general partner of McCabe Land Co. LP. He has served in the West Virginia Senate since 1998, and is a special project consultant to The State Journal.

Nick Sprague, who oversees legal and external affairs in West Virginia for Braskem/Oderbrecht, recently provided an insightful look at how West Virginia is viewed by an international company and how they view the state’s future in the next five years.

His presentation was part of the second annual Construction Coalition Conference, which took place April 21-22 in Morgantown. The conference theme was “Identifying and meeting the workforce challenges of the shale gas industry.” Sprague’s comments, however, focused how Braskem views its reception in West Virginia, the opportunity as seen by his company and the timetable for going forward — all of which were presented within the overall context of the upcoming challenges facing the shale gas industry.

Sprague commented on the “unbelievable collaboration among the stakeholders” and the “ethos of care” concerning the well being of the larger community, its neighbors and fellow workers. The excitement around creating something bigger than ourselves along with the real expectation of having the ethane cracker be the catalyst for a new market cluster that will sustain growth and development for years to come were parts of his message. New technology, new manufacturing facilities with new products and expanded research efforts to sustain the innovation in years going forward also were parts of his message about what a new market cluster would do for the state and region.

“This is not just a one-off project,” he said. “It is much bigger and more than the sum of its individual parts.”

The extent of his excitement and the scope of the vision of Braskem was exciting to hear.

The need for additional mid-stream suppliers, contractors, economic developers and expanding opportunities must be the ever-present charge. Braskem looks at the world with “constant dissatisfaction with the results achieved.” It is not what we have done, but what we can do. Dream of new manufacturing clusters and an expanded sustainable economy. Two ethane crackers are better than one, and three or four are better yet. It is not Brsakem/Oderbrecht vs. Shell; it is all helping to develop a diversified vibrant manufacturing cluster. To be successful, you need pipelines, local manufacturing and the available natural gas and ethane-related products that can be exported to the Gulf Coast and overseas. That size, scale and diversity of producers is what a vibrant manufacturing cluster(s) is all about. That is the future envisioned by Braskem. The task for the future is to build out the midstream grid for proper connectivity. Local demand is the most efficient way to manage ethane. The ability to ship the ethane to the Gulf Coast or overseas is important, but local users are the way to build the manufacturing cluster needed for a sustainable and diverse regional economy.

The coming five years will be a busy time. Braskem would be thrilled to have its facility operational in 4.5 years. It follows a front-end loading methodology and will advance only as the other pieces of the puzzle come together. By that, the company means it needs all of the ducks in a row. Braskem needs to focus on supply, mid-stream solutions, technology providers and the permitting process, among a host of others. A glitch in any part can slow the process and delay the beginning of operations of the new facility. If all goes well, Braskem would like to begin construction some time later next year. The construction process will take 42 months. This is a big project, and Braskem does not want to set expectations that cannot be met. What West Virginia has going for it is a solid workforce, a supportive larger community and strong state support. It is exciting to see such enthusiasm from a world class company.

If the state’s first ethane cracker is to become a reality within the next five years, we must all do our part to help. The expansion of the skilled labor force is part of the equation. New mid-stream manufacturers and new down-stream manufacturers are all part of the equation. It is not just about Wood County or about West Virginia, it is about the region. West Virginia, Ohio and Pennsylvania are all in this together. Sprague gave a surprisingly candid discussion of his view of the world. Our task is to help make that vision a reality and remember, we must maintain a stance of constant dissatisfaction with achieved results. We must keep moving forward as a region with the development of several manufacturing clusters and then we will have the sustainable economy of which we have dreamed for so long.

Construction Coalition Conference attendees were treated to a rare glimpse of the thought processes of a world-class company. Knowing how such a company thinks and the expectations it has should help us all do a better job of raising our own expectations and meeting the challenges before us.