Natural Gas Provides Economic Boost to Pennsylvania

The Wall Street Journal continues their run of energy articles with one today on the economic boost of natural gas shale on the Pennsylvania economy.  The Marcellus Shale, a huge formation of gas bearing rock that underlies much of Pennsylvania has been a game change for the state.  The article focuses on a proposed multibillion dollar chemical plant to be located in Beaver County, PA.  Natural gas is spurring hopes of a industrial renaissance in this once thriving industrial area.  This plant would take ethane gas - a hydrocarbon found in natural gas deposits - and turn it into ethylene, the first step in making many plastics.  This ethane would come from the Marcellus Shale and provide roughly 400 new jobs and many others during the construction process.  

This scenario is happening in other rust best areas.  Between 1998 and 2004, fertilizer producers—which use natural gas to make ammonia, the key component in nitrogen fertilizer—shut down more than two dozen U.S. plants. Some facilities were literally taken apart and shipped overseas, where gas was cheaper.  But that trend is reversing -in September, Egyptian industrial giant Orascom Construction Industries  announced plans for a $1.4 billion fertilizer plant in Iowa, which the company says would be the first large-scale fertilizer facility built in the U.S. in more than 20 years.  But there is uncertainty about the long term direction of natural gas prices and this remains a big obstacle to a gas driven renaissance.  But other companies are a little more sure-footed.  The Chemical industry - which also sent production overseas during the past 15 years is now coming back to the United States.  Dow Chemical and Chevron Phillips are planning to build multibillion dollar chemical plants in Texas and Louisiana. In fact these projects have a bigger long term economic impact than drilling itself.  The gas boom has led to new demand for drilling pipe and other metal products further boosting the companies' prospects.  Near Beaver County, Allegany Technologies is building a  new $1.1 billion mill to produce metals for chemical plants and the oil and gas industry which uses high tech alloys in its pipes and drilling equipment.