IHS Markit study: Ohio Valley region will supply nearly half of nation’s natural gas by 2040
Published: Thu Mar 21 2019
For Immediate Release: March 19, 2019 NEWS RELEASE
Natural gas liquids production in the Marcellus and Utica formations expected to nearly double and attract petrochemical investment to Ohio, Pennsylvania and West Virginia
COLUMBUS— The Marcellus and Utica shale formations are among the largest sources of natural gas and natural gas liquids in the world, and their production will increase exponentially in the next two decades, according to an IHS Markit study released today at the World Petrochemical Conference in San Antonio, Texas.
Natural gas from the tri-state region of Ohio, Pennsylvania and West Virginia will supply 45 percent of the nation’s production by 2040, up from 31 percent this year, according to the IHS study. The production of the highly lucrative natural gas liquids ethane, propane and butane (LPG) is expected to nearly double in the same period, accounting for 19 percent of the nation’s total by 2040, up from 14 percent in 2018, the study shows.
The study, “Estimated Logistics Benefits of the Shale Crescent USA Region Versus the U.S. Gulf Coast for Natural Gas and LPG” examines both production trends and the economics of petrochemical production in the 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.”
The IHS Markit study, commissioned by Shale Crescent USA and JobsOhio, quantifies for the first time the anticipated development and production growth emerging from one of the world’s most prolific sources of natural gas and natural gas liquids. In 2018, an IHS Markit study evaluated the prospects for a world-scale ethylene and polyethylene plant based on ethane feedstock in the Shale Crescent USA region.
The 2019 study says the region “will play a key role in satisfying America’s increasing reliance on natural gas, as well as keeping energy costs moderate. Favorable production economics place the Marcellus and Utica shale plays amongst the most cost competitive in the nation.”
The study found that by 2020, cost advantages for the production of various natural gas liquids in the Midwest versus the Gulf Coast is expected to range from 6 percent to 26 percent. The savings are impacting petrochemical company expansion plans.
“The abundance of natural gas and natural gas liquids has impacted our project pipeline,” said Dana Saucier Jr., JobsOhio Vice President & Head of Economic Development. “We are in conversations with companies seeking to expand as well as construct new plants in the region. The IHS Markit study quantifies the economic advantages of investing in the Marcellus and Utica formations.”
"In addition to the significant cost advantages, the Shale Crescent has the benefit of being located in an area of the country rarely impacted by extreme weather," Saucier said. "Investors are taking notice."
For more information, visit the IHS Markit study executive summary page.
