Webinar to look at shale gas role in reviving petrochemical industry

UNIVERSITY PARK, Pa. -- How byproducts obtained from Marcellus Shale and Utica Shale natural-gas development can revitalize the Northeast's petrochemical industry will be the topic of a free, Web-based seminar offered by Penn State Extension.

To be presented at 1 p.m. June 20, "Natural Gas Liquids Regional Development" is part of a monthly series of one-hour webinars. The session will focus on the use of shale-gas-derived ethane in the production of ethylene.

James Cutler, president of Macle Inc. and CEO of Appalachian Resins, will discuss development of an ethylene industry utilizing ethane derived from natural gas produced from the deep shale formations beneath states such as Pennsylvania, Ohio, New York and West Virginia.

"I believe that among shale-gas-related topics of interest to Pennsylvania landowners, this is second only to fracking," he said. "I will give a basic, nontechnical overview of what ethylene is, how it is produced and what its principal uses are."

According to Cutler, there are two economic models that can be employed to support the development of an ethylene industry utilizing ethane derived from Marcellus and Utica shale-gas production.

The first is the construction of a "world-scale" ethylene plant (between 1.5 billion and 3 billion pounds per year of ethylene production). The second is the construction of smaller, regional-sized ethylene plants (between 500 million and 1 billion pounds per year of ethylene production).

"I will discuss the relative economics between world-scale and regional-sized ethylene plants using only ethane as the feedstock," he said. "I also will cover the driving force of vertical integration on ethylene plant development. In addition, I will talk about the gap between project-development economics and social policy."

Multiple regional-sized ethylene plants can provide supply chain resiliency in the case of a major natural disaster, such as a tornado, hurricane or flood, or a terrorist attack, Cutler noted. In addition, multiple regional ethylene plants will provide more employment.

Petrochemical plant workers reflect a pool of skilled individuals, a consideration in homeland security, he explained. Also, the creation of jobs via multiple regional ethylene-production facilities can be considered a least-cost method of creating additional skilled jobs.

"While I will not get into political issues, an understanding of ethylene plant development fundamentals will help the individual taxpayer to assess the benefit, if any, of providing major tax concessions to project developers," Cutler said.

Cutler also pointed out that marketing factors and economic geography are the true drivers of economic development, not feedstock availability. "For ethylene plants, bigger isn't always better," he said. "Capital costs, the availability of skilled labor, environmental factors and infrastructure considerations can trigger diseconomies of scale."

Presented by Penn State Extension's Marcellus Education Team, the monthly natural-gas webinars usually are offered from 1 p.m. to 2 p.m. on Thursdays.

Previous webinars, publications and information also are available on the Penn State Extension natural-gas website (http://extension.psu.edu/naturalgas), covering a variety of topics, such as Act 13; seismic testing; air pollution from gas development; water use and quality; zoning; gas-leasing considerations for landowners; gas pipelines and right-of-way issues; legal issues surrounding gas development; the impact of Marcellus gas development on forestland; stray gas migration; gas reserves in the Utica Shale formation; possible shale-gas development in the Loyalsock State Forest in Lycoming County; and the impact of shale-gas development on rural Pennsylvania roads.

Registration for this webinar is not necessary, and all are welcome to participate by logging in. For more information, contact Carol Loveland at 570-320-4429 or by email at cal24@psu.edu.

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Last Updated June 10, 2013