Dec 5, 2018 3 min read

The U.S. Department of Energy issued a report to Congress on Tuesday titled “Ethane Storage and Distribution Hub in the United States.” The Appalachian region, which includes Pennsylvania, is considered a viable spot to develop such a hub, according to department’s website.

“There is an incredible opportunity to establish an ethane storage and distribution hub in the Appalachian region and build a robust petrochemical industry in Appalachia,” Energy Secretary Rick Perry said, according toenergy.gov.

“As our report shows, there is sufficient global need, and enough regional resources, to help the U.S. gain a significant share of the global petrochemical market.”

Other areas, such as the Gulf Coast and the Permian Basin, have hubs for natural gas liquids. Appalachia does not, despite the bountiful production in the Marcellus and Utica shale plays. This also is a region where a petrochemical cracker plant – which will produce NGLs – is under construction in Potter Township, along the Ohio River in Beaver County.

The report came out on a day the Independent Fiscal Office issued its quarterly analysis, projecting that Pennsylvania natural gas production will pass 6 trillion cubic feet in 2018 – a 12 percent annual increase.

DOE’s report says “the Appalachian region – consisting of Ohio, Pennsylvania, West Virginia and Kentucky – has seen a significant increase in production of natural gas and NGLs. … The Appalachian Basin’s shale resource endowment is so bountiful that, were it an independent country, the region would be the world’s third largest producer of natural gas today.”

Ethane production in the East region, the report goes on, is projected to grow to 640,000 barrels per day in 2025 – more than 20 times greater than it was in 2013.

Another major takeaway of the DOE report is that “nearly one-third of U.S. activity in the petrochemical system occurs within 300 miles of Pittsburgh,” where there are $300 billion of net revenue and 900,000 workers.

David Spigelmyer, president of the Marcellus Shale Coalition, said in a statement: “Pennsylvania is strongly positioned to continue to grow good-paying energy, small business and manufacturing jobs across … We appreciate the Trump Administration’s support for creating middle-class jobs and enhancing America’s global energy leadership. That said, policies – especially at the local and state level – have an enormous impact on job-creating investment decisions.

“Our industry is fully committed to working collaboratively with policymakers at every level of government and other key stakeholders to advance commonsense solutions that focus on growing Pennsylvania energy, infrastructure and manufacturing jobs.”