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Sunday 21 October 2018
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Pennsylvania Should be the Keystone in ‘Chemical Manufacturing Renaissance’

The shale revolution has been the most exciting regional energy development of the last 50 years. Access to vast new supplies of natural gas and natural gas liquids (NGLs) from previously untapped deposits has created a decisive competitive advantage for Pennsylvania chemical and plastics manufacturers.

To fully capitalize on this opportunity, Pennsylvania must continue to attract petrochemical companies, thus ensuring the job opportunities and business created by natural gas byproducts remain in the state.

The region’s supply of plentiful natural gas resources makes it appealing to new companies looking to invest in areas with readily available raw materials, while the higher education landscape helps seal the deal for the chemical industry.

In addition to being home to notable institutions, such as Carnegie Mellon University and the University of Pittsburgh, Pennsylvania is especially well positioned to educate prospective chemical workers. Among the six accredited plastics engineering schools in the nation, two are in Pennsylvania: Penn State Behrend and the Pennsylvania College of Technology. The graduates of these illustrious institutions are making up a highly skilled workforce to fill the high-paying jobs created by NGLs and downstream manufacturing.

Pennsylvania is positioned with a variety of nontraditional educational opportunities, yet many graduates of our accredited schools move out of state to find jobs. If we could make the connection between our raw materials and the worthwhile investment in relocating to our state for the plastics and chemical companies that use them, we could not only optimize the products developed but also circulate educated Pennsylvanians into our own economy.

Employment is only one piece of this economic puzzle. To boost Pennsylvania’s chemical standing, we need to ensure our state is equipped to provide the feedstock for petrochemical facilities to operate. IHS Markit and the Pennsylvania Department of Community and Economic Development report that we are using only a limited portion of the available Marcellus and Utica Shale natural gas and NGLs in-state, which speaks to the need for immediate steps to maximize our economic development. The Philadelphia market would be a great place for such a facility. The study found that the manufacturing cost of business is comparable to that of the Houston area, where a majority of America’s petrochemical facilities are located.

Local projects such as the Mariner East 2 pipeline are essential for transporting natural gas and natural gas liquids, such as ethane and butane. Ethane is a critical building block for plastics, textiles, detergents and coatings, which are common products of the chemical industry. Butane is a feedstock for petrochemical manufacturing. IHS Markit also reported that Pennsylvania has a “sufficient supply of NGL to support a world-class petrochemical industry,” with the major competitive advantage of “access to an expanding supply of low-cost natural gas and NGL.” Because of the regional supply growth in NGLs, plastics companies in Pennsylvania are predicted to see “significant
cost savings and advantages over competitors located outside of the region.”

We have what it takes to be a top candidate for companies in the chemical and plastics industries. We have an expanding supply of natural gas at a low cost, a significant locational advantage to two-thirds of North America’s polyethylene and polypropylene resin demand, and highly accredited educational systems for industry related jobs that are continuously creating new generations of professionals. To keep these advantages within our state, we must continue taking advantage of our raw materials, focusing on how to make them readily available for downstream use, to rein in more companies and give our educated and trained professionals opportunities to succeed locally. These opportunities will help Pennsylvania become a major player in the petrochemical industry and a chemical manufacturing renaissance.

Lori Joint is the vice president at the Manufacturer & Business Association. Contact her at 814/833-3200, 800/815-2660 or ljoint@mbausa.org.