Shale Crescent Group Touts Ohio Valley to Industry
YOUNGSTOWN, Ohio – A privately funded group based out of Marietta is stepping up its initiative to market the Ohio Valley region as the ideal place for manufacturers to locate and capitalize on the area’s low cost of natural gas, its members said during a conference call Thursday.
“It’s created a huge opportunity,” said Jerry James, president and CEO of Artex Oil Co. in Marietta and a member of Shale Crescent USA, a group formed to draw attention to the benefits of doing business in the Ohio River Valley region.
“We now have the lowest natural gas prices in the industrialized world,” James said. “This bodes well for Ohio, West Virginia and into Pennsylvania and the ability to attract businesses from around the world.”
Shale Crescent supporters hosted the conference call in advance of its official public launch meeting where Youngstown State University President Jim Tressel was the featured speaker.
The initiative comes just two days after Royal Dutch Shell announced it would invest $4 billion to construct an ethane cracker plant near Monaca, Pa., along the Ohio River. Concurrently, PTT Global, a Thailand-based chemical company, is considering building a similarly sized ethane cracker in Belmont County along the Ohio, closer to Marietta.
“When one of the largest companies in the world has seen fit to expand up here, that creates a huge opportunity,” James said. “When other plants are looking around the world, and when a company like Shell comes into the area, they need to be looking here, too.”
A substantial amount of the manufacturing sector over the last 75 years gravitated south to the Gulf of Mexico region, James said, because of the availability of low-cost natural gas. With such large quantities of this resource now available in the Marcellus and Utica shale in eastern Ohio, western Pennsylvania and West Virginia, the region is positioned to capture more of this business.
“We now have the opportunity to compete with those areas, and are much more competitive with Europe and Asia,” he said. “The location of production has dramatically shifted in the last three years.”
James cited projections that by 2020 about one-third of all natural gas produced in the United States will originate from the Appalachian Basin, and that today natural gas prices here are 50 cents to $1 below the Henry Hub distribution price. “Historically, we were 50 cents to $1 above Henry Hub,” he said. “That’s what’s changed over the last year.”
It’s that change that helped drive the new initiative, noted Mark Schwendeman, president of the Schwendeman Agency, an insurance business in Marietta and one of the original members of the group. The effort, he added, began several years ago when local business leaders, community foundations and other organizations came together to facilitate ways to attract new business to the area.
“We’re branding the Mid-Ohio Valley as Shale Crescent USA,” he said, evoking that brand to remind his listeners of the region’s relationship with shale oil and gas, much as Silicon Valley is associated with technology. “The purpose of Shale Crescent USA is, at the end of the day, to bring business to our area,” he said, through cooperation with local government and organizations.
“We’re going to be contacting and marketing to the top 200 energy users in the world,” he said. The organization intends to hire full-time and part-time staff to handle marketing and technical information.
Among the industries targeted are high-energy users such as heavy manufacturers, but other downstream businesses as well such as petrochemical companies that require ethane feedstock and fresh water, added Wally Kandel, vice president and site manager for Solvay, a global polymer manufacturer.
“You have the natural gas, an abundance of water and a proximity to markets,” Kandel said. He also cited community assets such as workforce development initiatives through the community colleges in the region.
The ultimate goal is to bring high-paying jobs back to the region, he said.
James noted that the organization is strictly a privately funded venture at the moment, but said he welcomed any cooperation from organizations such as JobsOhio, or any other economic development initiative. “We are welcoming all voices to the table.”
That also means reaching across to other states in the Ohio River region, Schwendeman noted. “We truly think that this is a Mid-Ohio Valley project, not just an Ohio or West Virginia project. The opportunity is significant for both sides of the river.”
Copyright 2022 The Business Journal, Youngstown, Ohio.