A new report from the Pennsylvania Department of Community & Economic Development touts the potential impact Natural Gas Liquids (NGL) from the Marcellus Shale will have on the state of Pennsylvania. The report forecasts $2.7 – 3.7 billion in investments in natural gas liquid assets as well as the opportunity to attract additional cracker plants, and petrochemical and plastics manufacturing in the state.

Governor Tom Wolf was quoted in the state’s press release, saying:

“Pennsylvania has a once-in-a-generation opportunity to develop and implement a strategy that will cultivate a manufacturing renaissance and transform our economy across the Commonwealth,” said Governor Wolf. “The foundation for building a diverse and robust petrochemical and plastics industry was initiated with the decision by Shell Chemicals to invest in Pennsylvania – and we must ensure that we make the most of this chance to create good paying jobs for Pennsylvanians.”

Pennsylvania also has a significant locational advantage. The report estimates that 73% of United States and Canada’s Polyethylene demand and 67% of Polypropylene demand falls within a 700-mile region of Southwestern Pennsylvania.

Range pioneered the Marcellus Shale in 2004, drilling the first well in what has become the core of the play where the Marcellus is rich in natural gas liquids.This advantage has spurred large multi-company investments which tally billions of dollars in innovative projects such as the MarkWest Energy Partners Houston, PA Processing Plant, as well as Mariner West and more recently Mariner East pipeline projects. Range remains the largest NGL producer in the state, and should approach 100,000 barrels per day this year in production, primarily from Pennsylvania.

The report concludes:

“Pennsylvania has, and will continue to have, a large supply of NGL to support the emergence of a world-class petrochemical industry. Its major competitive advantage is access to an expanding supply of low-cost natural gas and NGL, especially ethane and propane that can support four additional, world-scale, integrated ethane crackers similar in size to the Shell Pennsylvania Chemicals… Pennsylvania must begin immediately to plan and implement strategies to maximize the potential long-term economic development benefits that will accompany the growth of a petrochemical cluster.”

Key takeaways from the report:

  • There is an abundance of ethane available in the Marcellus and Utica region. Additional ethane can be recovered from natural gas to support up to four additional world-scale steam crackers.
  • Marcellus and Utica’s contribution to total US natural gas supply is expected to increase from around 25% in 2015 to more than 40% by 2030, reaching approximately 40 Bcf/d.
  • By 2026–30, NGL production to meet demand in the United States is expected to reach about 6.3 million b/d, of which more than 1 million b/d of NGL is expected to originate from natural gas production in the Marcellus and Utica regions.
  • Pennsylvania has a significant locational advantage. For instance, 73% of US and Canadian PE demand and 67% of PP demand is located within 700 miles of Southwestern Pennsylvania.
  • $7.3–10 billion will be invested in NGL assets in three states (Pennsylvania, Ohio, and West Virginia) between 2017 and 2025, with $2.7–3.7 billion of that being invested in Pennsylvania.
  • Estimates that between 2010 and 2016 about $6 billion was invested in NGL-related assets in the portions of the Marcellus and Utica basins located in Pennsylvania.

More Information
Report: Prospects to Enhance Pennsylvania’s Opportunities in Petrochemical Manufacturing
Executive Summary: Prospects to Enhance Pennsylvania’s Opportunities in Petrochemical Manufacturing