1. Preparing for Downstream Opportunities in the Marcellus and Utica Plays
November 21, 2014
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2. Objectives
The initiative seeks to:
•Educate, inform, “make ready”
•Address the barriers to growing jobs and investment, including:
–Workforce
–Pipeline and storage infrastructure
–Pad-ready development sites
–Downstream Derivative Chemicals & Plastics
•Promote opportunities
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3. Partners
Team NEO is a regional, private-sector organization that markets Northeast Ohio to the world and collaborates with its partners and others to attract new businesses and help existing businesses grow.
A subsidiary of the Ohio Appalachian Business Council, the Appalachian Partnership for Economic Growth (APEG) is committed to accelerating sustainable business growth, job creation and advancing the economy of Southeast Ohio.
The Pittsburgh Regional Alliance, the marketing affiliate of the Allegheny Conference on Community Development, markets the benefits of conducting business in southwestern Pennsylvania to companies all over the world that are growing, relocating or expanding.
Vision Shared’s mission is to strengthen the economy, transform communities, promote progressive government and improve the quality of life for West Virginians.
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4. We have the Resource: 2nd Largest Unconventional Gas Play in the World
1.North Field/South Pars (Qatar/Iran)
2.Marcellus (U.S.)
3.Urengoy (Russia)
4.Haynesville (U.S.)
5.Yamburg (Russia)
6.South Yolotan (Turkmenistan)
7.Ordos basin CBM (China)
8.Bovanenkovskoye (Russia)
9.Ghawar (Saudi Arabia)
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5. And We are a Key Wet Gas Region
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6. Infrastructure: Continuous Investment
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7. Supplier Networks
Our region’s shale opportunity comes from plentiful, sustainable, low-cost feedstocks to make this manufacturing value chain more globally competitive
Opportunity exists beyond exploration and production
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8. Supplier Networks:
Markets to Serve & Grow
Solid growth potential for Domestic & Global Markets
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9. Support Services and
Other Businesses that Will Grow
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10. Other Key Stakeholders Need to Come Together to Help Make it Work!
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11. A Resurgence in U.S. Chemical Industry: We Want to Capture Our Fair Share
Increase in CAPEX estimates
from March ’13 to Feb ’14:
>$28B incremental
Source: American Chemistry Council
148 projects and $100 billion in potential capital investment as of February 2014 …up from 97 projects and $72 billion as of March 2013 53% is by firms based outside the U.S.
Chemical Investment
Increase in CAPEX estimates
from Feb ’14 to Sep ‘14:
>$25B incremental
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12. New Chemical Industry Capital Investment from Shale (2010-2020), by Region
“Ohio Valley”=OH, PA, WV
Source: American Chemistry Council
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13. New Chemical Industry Capital Investment from Shale (2010-2020), by Chemical Segment
Source: American Chemistry Council
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14. New Chemical Industry Capital Investment from Shale (2010-2020), by Asset Type
Source: American Chemistry Council
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15. Proposed and Prospective Locations for World-Scale Petrochemical Facilities
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16. Derivatives of Natural Gas
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17. Ethylene Chain
Source: American Chemistry Council
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18. Derivatives of Natural Gas
•Global ethylene market
–Global ethylene production on Jan. 1, 2013, factoring in 2012 additions, was more than 143 million tpy, following capacity at the same point last year of almost 141 million tpy.
•United States ethylene market
–U.S. Ethylene production averaged 149.2 million lb/day in first-quarter 2014 and 142.9 million lb/day in the following quarter.
•Global polyethylene market
–Global polyethylene demand is forecast to rise by approximately 3.7% per annum between 2013 and 2018, at a slightly higher level than its growth during the 2003 to 2013 period.
•United States polyethylene market
–Total US sales of PE were 38.6 billion pounds, a 2.1 percent increase over 2012
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19. In Good Company
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20. Petrochemical & Downstream Manufacturers within 400 Miles: 17,477 Companies
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21. Chemical Manufacturers: 6,371 Companies
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22. Plastic Converters: 8,147 Companies
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23. Rubber Manufacturers & Converters: 1,812 Companies
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24. Plastic Manufacturers: 1,147 Companies
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25. Experienced Talent Pool
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
United States
Tech Belt (OH,
PA, WV)
Philadelphia
MSA
Houston MSA
Percent of Workforce Employed in Chemical Manufacturing
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
Houston MSA
Philadelphia
MSA
United States
Tech Belt (OH,
PA, WV)
Percent of Workforce Employed in Plastics and Rubber Product Manufacturing
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Philadelphia MSA
United States
Houston MSA
Tech Belt (OH, PA,
WV)
Percent of Workforce Employed in Fabricated Metal Product Manufacturing
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26. *TechBelt data includes degrees from Ohio State University and Penn State University **Houston data includes degrees from University of Texas – Austin Source: College Navigator
Associate, bachelors, masters, and doctorate degrees awarded in 2012-2013 within 100 miles:
Ample Pipeline of Talent from 51 Colleges & Universities
0
100
200
300
400
500
600
700
800
TechBelt (OH, PA, WV)*
Houston Region**
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27. Concentration of Corporate, Government & University R&D
Corporate
•Bayer Material Science
•Bridgestone Americas
•Braskem
•First Energy
•Goodyear Tire & Rubber
•Koppers Industries
•LANXESS
•Omnova Solutions
•PPG Industries, Inc.
•Sherwin Williams
Government
•America Makes
•NASA Glenn Research Center
•National Center for Defense Manufacturing and Machining National Energy Technology Laboratory
University
•Carnegie Mellon University’s Scott Institute for Energy Innovation
•Case Western Reserve’s Great Lakes Energy Institute & Institute for Advanced Materials
•University of Akron’s Institute of Polymer Science and Polymer Engineering
•University of Pittsburgh’s Center for Energy, Manufacturing Assistance Center
•West Virginia University’s National Center for Coal and Energy
•Youngstown State’s Center of Excellence in Materials Science and Engineering
And more, including
•MATRIC
•PRISM
•MAGNET
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Our Region has a robust “Innovation Ecosystem to fuel growth in this Sector

28. We’ve Got Capacity
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29. …and Reliability
PJM Interconnection coordinates the movement of wholesale electricity through all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
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30. First Energy Future Investments
•Transmission system is in the midst of a building boom, with more than $1.3 billion in investment planned for 2014 alone
–Projects include new or rebuilt high voltage power lines, new substations; installation of specialized voltage regulating equipment; and reinforcing substation facilities with advanced surveillance technologies and no-cut/no-climb fencing
•“Energizing the Future” initiative is expected to total $4.2 billion in 2014 through 2017 and involves upgrading and modernizing their transmission system
–Initial construction effort will be transmission power lines and substations in the Ohio Edison, Cleveland Electric Illuminating Company, Toledo Edison and Penn Power areas, and expand east over time
•Currently building a new 138-kilovolt (kV) substation and an 18-mile transmission project near Clarksville, WV to support load growth related to shale gas development
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31. Freight Flow
Source: Research and Innovative Technology Administration, 2010
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32. Foreign Trade Gateways
Source: Research and Innovative Technology Administration, 2011
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33. Opportunity: Export to Global Markets
Largest merchandise export categories:
Transportation Equipment: $258.3 billion (8.1% of U.S. total)
Computer & Electronic Products: $204.7 billion (5.8%)
Chemicals: $199.4 billion (7.1%)
Machinery, Except Electrical: $150.2 billion (4.7%)
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34. Safe Location, Extremely Low Risk of Natural Disasters
Source: Core Logic 2014
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35. Shale & Downstream Wealth Creation & Jobs Requires Shared Vision, Commitment, and Partnerships
We have a well-established Supply Chain, with:
-Close Proximity to Domestic Customers & Markets
-Great Logistics and Export capabilities in place
-Cost-effective & reliable utilities
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36. Shale & Downstream Wealth Creation & Jobs Requires Shared Vision, Commitment, and Partnerships
We have strong Service & Support Capabilities:
-Great Talent Pool & Pipeline
-Innovation Ecosystem
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37. Shale & Downstream Wealth Creation & Jobs Requires Shared Vision, Commitment, and Partnerships
We have potential for developing: -Shared Vision -Partnerships and Commitment to act
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38. Shale & Downstream Wealth Creation & Jobs Requires Shared Vision, Commitment, and Partnerships
“Use It or Lose It”
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39. THANK YOU!
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