New study confirms why companies should come here
John Chambers, former executive chairman and CEO of Cisco Systems turned venture capitalist, said, “If you don’t innovate fast, disrupt your industry, disrupt yourself, you’ll be left behind.”
We have all seen this happen. Walmart disrupted small businesses on Main Street. Amazon disrupted Walmart. We can now have almost everything Walmart sells delivered cheaply to our front door. What next?
When we returned from Japan last year my wife, Lynnda, decided that she needed a heated toilet seat like she experienced in Tokyo. Saturday night at 10 p.m. she went to Amazon and ordered one. It arrived Monday afternoon and was operational on Monday evening. The power of disruption.
Once again Shale Crescent USA has become “the disrupter.” Our IHSMarkit study released last March at the World Petrochemical Conference said that the Shale Crescent USA region is the most profitable place in the world to build a petrochemical plant. This turned the petrochemical industry upside down. There probably wasn’t an executive (except those on our team) that expected a small Marietta, Ohio-based nonprofit organization to show up on the main stage of the World Petrochemical Conference in Houston with this industry-changing information.
A new study commissioned by Shale Crescent USA, “Estimated Logistics Benefits of the Shale Crescent USA Region Versus the U.S. Gulf Coast for Natural Gas and LPG” was released last week at this year’s WPC in San Antonio, Texas. It highlights chemical industry development opportunities for the region based on predicted volumes and cost of natural gas and methane, propane and normal butane (LPG) production in the Marcellus and Utica shale plays; the estimated logistics-related cost advantage of feedstock supply; and the cost to distribute the chemical products to regional customers. The report follows the March 2018 study conducted by IHSMarkit, which evaluated the prospects for a world-scale ethylene and polyethylene plant based on ethane feedstock in the Shale Crescent USA region.
“Research continues to drive home the myriad economic advantages for manufacturers in the Shale Crescent region when compared to other, more traditionally accepted energy and chemical hubs,” said Wally Kandel, spokesperson for Shale Crescent USA. “Investors are catching on that the Marcellus and Utica Shale formations offer unprecedented benefits; there are few other places in the world, if any, where the supply, manufacturing facilities and end users are all in close proximity. We look forward to welcoming more international chemical and energy companies to the region to open or expand their business and reap these benefits.”
“The Shale Crescent USA region will be a significant contributor to the supply of natural gas, ethane and LPG well into the future,” said Anthony Palmer, vice president, chemical consulting at IHSMarkit.
Based on U.S. EIA numbers from 2008 to 2018, Shale Crescent USA accounts for 85 percent of the USA’s natural gas growth. Gas production in the Shale Crescent USA was up 26.5 billion cubic feet per day (BCF/D). This compares to a growth of only 2.3 BCF/D for the entire state of Texas.
The study said that our region has a cost advantage because of transportation and logistics for the NGLs and derivatives produced in the Shale Crescent region as compared to supply from the U.S. Gulf Coast. More disruption from Shale Crescent USA:
Methane: 15 percent lower feedstock cost
Propane: 6 percent lower feedstock cost
Butane: 13 percent lower feedstock cost
Methanol: 26 percent lower delivery cost
Integrated Ammonia/Urea: 12 percent lower delivery cost
Integrated PDH/Polypropylene: 11 percent lower delivery cost
The U.S. Gulf Coast has long served as the United States’ primary energy and petrochemical hub. The Shale Crescent region’s abundant natural gas and NGL supply — combined with its access to water for transportation and processing, as well as its proximity to the vast majority of North American demand for thermoplastics – make it a prime candidate for a second U.S. petrochemical hub.
This is why our lunch presentation at WPC, “Disruption of the Petrochemical Profitability Equation,” had standing room only and why we had to turn people away because the room was full. The new profitability equation is: Petrochemical Profitability = Build on top of feedstock + In the center of customers
What this means for people in our region is, we are now the place for companies to relocate and expand. They are getting the message based on our private meetings with high-level executive decision-makers in San Antonio. Our prospect list is growing. Our mission is to bring high-wage jobs and to create a higher standard of living with a clean environment for the people in our region. San Antonio brings us a step closer. We are already seeing job and wage growth. Our goal is to accelerate this.
One big change at WPC this year is we know people in the petrochemical industry and they know us. At every break or evening reception I saw decision-makers that I know and they knew me.
We had meaningful conversations. People found us and wanted to visit. We have created awareness.
Our goal now is to create preference for our region. That is starting.
We have been incredibly blessed with natural resources. I don’t believe this was an accident. I also believe it is our responsibility to use them to benefit people in our region and the world. A thought to ponder.
Kozera, email@example.com, is the director of marketing and sales for Shale Crescent USA. He is a professional engineer who has over 40 years of experience in the energy industry.