Energy Leaders Tout ‘Appalachian Petrochemical Renaissance’ for Region
BOARDMAN, Ohio – The Mahoning Valley is poised to benefit from a regional petrochemical renaissance, an assistant U.S. energy secretary told the audience Thursday at the Youngstown/Warren Regional Chamber’s Salute to Business Breakfast.
Steve Winberg, U.S. assistant energy secretary for fossil energy, was one of two featured speakers at the Regional Chamber event, which also featured the presentation of two chamber awards that are normally presented at the chamber’s annual meeting in the spring. The event was held at Mr. Anthony’s Banquet Center.
The other main speaker was Majida Mourad, vice president of government relations at Tellurian Inc., a natural gas company based in Houston. She was the scheduled keynote speaker at the chamber’s annual meeting, which had been scheduled for March 19 before it was canceled because of the pandemic.
The speech “looked like it would never happen because of COVID but here we are, five-and-a-half months later,” Mourad said. “Let’s hope that this is truly a sign that things are going in the right direction.”
Like virtually every other economic sector, the natural gas industry was hit by the pandemic, which led to a global economic slowdown, though the damage was not as severe as for others, Winberg said.
Natural gas production has remained strong through the pandemic with only minor seasonal changes, and industrial demand has remained steady, Mourad said. Most of the damage has been because of lower liquid natural gas exports, which are down 61% since January, she reported.
“This really matters because LNG exports support jobs in this region,” she said.
Long-term projections for global demand remain strong, and production and imports are expected to return to and exceed levels from before COVID, Winberg said.
“Our vast natural gas resources remain ready to be produced when the demand recovers,” he said. “Even though prices are a little bit soft, they are moving in the right direction.”
Energy production supports up to 260,000 Ohio jobs and brought $78 billion of new investment to the state, Mourad said. Also, lower gas prices have saved businesses more than $15 billion, Ohio families are receiving natural gas royalties and manufacturers in the region are getting cheaper feedstocks.
“Shale gas is the gift that keeps giving,” she remarked.
In the meantime, the opportunities created by shale continue, Winberg said. Ohio is the country’s fifth largest producer of natural gas, and if the Appalachian region was an independent country it would be the third largest producer of natural gas on the planet.
The region’s rich natural gas liquids have the potential for a new petrochemical industry, an “Appalachian petrochemical renaissance,” as he put it.
Those petrochemicals will help drive “a revitalized manufacturing industry in Ohio,” which can be bolstered by eastern Ohio’s “rich history and tradition in manufacturing, particularly in the Youngstown area,” he continued.
“Even more importantly, this region has a smart and talented workforce, a lot of important infrastructure and proximity to downstream markets, the very things that are critical to a successful manufacturing base,” as well as YSU, which will provide talent to fulfill those new opportunities, he continued. “The exciting fact is that eastern Ohio is on the verge of a new manufacturing renaissance that can transform Youngstown in ways not seen in decades.”
There already are concrete examples of that potential, as evidenced by the Royal Dutch Shell ethane cracker under construction in Monaca, Pa., which is expected to employ 600 workers when operating. PTT Global Chemical America is evaluating a similar potential cracker project near Belmont County.
There is enough ethane in the ground to support three more crackers of similar size, Winberg said. According to an American Petrochemical Council report, a petrochemical renaissance in the region could spur more than $35 billion in capital investment, 100,000 jobs, nearly $30 billion in annual revenue and more than $1 billion per year in state and local taxes.
“It’s imperative that we build out this petrochemical renaissance in this region,” he said.
Private capital is required to create this renaissance, but the federal government has a role in creating an environment conducive to investment, he said.
“Let’s be frank, that can only happen if Washington is supportive of – and not antagonistic toward – using our vast energy resources to expand resource development and our manufacturing capacity,” he warned.
The Trump administration has worked with state and local leaders to expand economic growth in the Valley and to bring back manufacturing jobs, working with state and local leaders to advance those efforts, Winberg said. The turnaround that has begun in the automotive industry – including the establishment of Lordstown Motors Corp. and its Endurance all-electric pickup truck locally – is one of the “good things” federal officials are seeing on that front.
“As you may know, the Department of Energy’s vehicle technology office is investing in the [research and development] of next generation vehicle batteries,” he said. The department, from the secretary on down, is “excited that this R&D will play a role in helping Lordstown become the country’s Voltage Valley,” which has “enormous potential,” he said.
“I want to make a case for optimism, that every family and job creator in the Mahoning Valley should be excited about our future and the role that energy will play in our future,” Mourad said.
Energy can be an abstract concept to many, but it’s important that people understand how much it affects their everyday lives, she said. “When you have a loved one that goes to a hospital, everything that’s keeping them alive is related to energy,” she said.
As the global economy rebounds, the federal government expects LNG exports to rise 75% above the lower point in July, and rise 32% higher than that next year, she said. “As this happens, it will make America more independent and weaken our competitors, such as Iran and Russia,” she said.
Locally, “exciting” projects related to natural gas include the Lordstown Energy Center and Trumbull Energy Center power plants, a lake-to-river pipeline and the Shell cracker.
“All of these projects create jobs, create downstream opportunities and make the Mahoning Valley an even more attractive place for manufacturers to set up shop,” she said. “As we strive from the COVID pandemic, at a time when so many people are struggling, we owe it to them and to ourselves to make the most of this gift that we’ve been given.”
During the program, the chamber presented the William G. Lyden Spirit of the Valley Award to Charles Jarvis, publisher of the Tribune Chronicle/The Vindicator, and the Donald Cagigas Spirit of the Chamber Award to Michael Schrock, Mahoning Valley regional president for TCF Bank.
The Salute to Business breakfast normally serves as the kickoff for the Youngstown State University football season and the Canfield Fair, which, except for the Junior Fair, also was canceled because of the COVID-19 pandemic.
2020 has been a year like few have experienced and not seeing the fair board at the breakfast was “tough,” said Guy Coviello, president of the Regional Chamber Foundation.
“With COVID continually changing our lives day by day and not knowing what tomorrow brings, we are especially grateful that we could come together today and accomplish what we initially had planned for our annual meeting,” Coviello said.
Last year, after the owners of The Vindicator announced the newspaper would cease publication Aug. 31, Jarvis announced that Ogden Newspapers, which owns the Tribune Chronicle, had purchased the Vindicator name, website and subscriber list. It began publishing its Vindicator edition Sept. 1.
“The merger of these papers was providential,” Jarvis said. Without the merger, The Vindicator would not have survived and the Tribune Chronicle would have been “severely damaged” by the pandemic.
“Together we have more than weathered this storm much better than we would have separately,” he said.
Before presenting the award, Coviello, a former Tribune Chronicle editor, offered a personal reflection about his former employer. When he and his wife decided to travel overseas for six weeks to adopt their children, he put in his application for six weeks of unpaid family leave.
Jarvis responded by telling him that he wasn’t “going to start a family in financial hardship” and told him to take a laptop and write editorials from South America.
“When Charles developed remote work, he wasn’t motivated by a pandemic. He was motivated by his heart,” Coviello said.
Coviello noted the “tremendous impact” Schrock has made since joining the chamber’s board of directors three years ago. Those included his role in helping chamber staff create content for the Columbus Drive-In and DC Fly-In events, and his assistance in creating the marketing prospectus for the Valley’s 15 federal Opportunity Zone areas.
“It is easy to wake up every single morning to serve this organization,” Schrock said. The chamber’s employees “wake up every day focused on economic development and making a difference in our Valley,” he added.
Also addressing the chamber members and guests at the breakfast meeting was new Youngstown State University head football coach Doug Phillps. Because of the pandemic, the Penguin football team won’t take to the field until spring 2021.
The former educator said he needs to use the current situation as a learning experience.
“The first thing you have to do in building a football program is you’ve got to learn how to deal with success and you also have to deal with adversity,” he said.
Human nature deals with adversity in three ways, the first two being quitting and coping, he said.
“What we’re teaching our young men is we’re going to ‘thrYve,’” he said, stressing the uppercase “Y” in the word. “We’re going to get stronger. We’re going to come out of it. We’re not going to make excuses.”
Phillips thanked the business community for its support of YSU and the university’s athletic program, which he said he often boasts of when he talks to his boss at his previous school, the University of Cincinnati.
“What they do for us is unmatched,” he remarked.
Pictured at top: Steven Winberg, assistant secretary of fossil energy for the Department of Energy, addresses the audience during the Youngstown/Warren Regional Chamber Salute to Business Breakfast
Copyright 2020 The Business Journal, Youngstown, Ohio.