The Development of the Marcellus Shale is Good For Delaware

Echoing the recent comments of American Chemistry Council President and CEO Cal Dooley, the United States has a “once-in-a-generation opportunity to capitalize on increased supplies of natural gas,” becoming a “game changer” for the U.S. petrochemical industry. With 30 substantial projects coming online in the US totaling $25 billion in capital investment, it’s clear that there is confidence that the nation will have competitively priced natural gas for the near future.

While neighboring Pennsylvania has seen significant growth in employment and economic opportunity, the tremendous benefits resulting from shale gas production continue to span the region and country, serving as a model of opportunity for all – including the residents of Delaware. As the vast Marcellus Shale formation continues to serve as a reliable and abundant source of natural gas, the responsible development of natural gas is paving the way for a manufacturing revival in the Marcellus Shale region. And in Delaware, the state’s large base of chemical and manufacturing companies are capitalizing on the easy access to cheaper energy supplies.

Responsible for creating tens of thousands of jobs nationwide across numerous industries, shale gas production can similarly spur construction of plants that buy natural gas for fuel or as raw material to make chemicals, plastics, fertilizer, steel and other products. A recent report by PricewaterhouseCoopers LLC estimated that such investments could create one million U.S. manufacturing jobs over the next 15 years. PricewaterhouseCoopers also predicts that responsible shale gas development could add approximately one million jobs by 2025, encourage greater investments in U.S. plants and reduce U.S. manufacturers’ natural gas expenses by as much as $11.6 billion annually through 2025.

Indeed, the abundance of affordable natural gas is helping Delaware to reduce energy costs and create a competitive advantage for its chemical manufacturing industry. Since most U.S. chemicals are derived from ethane (found in shale gas), which is cheaper than a more expensive, oil-based raw material used internationally, the U.S. petrochemical industry now enjoys a 50 to 1 price advantage over its global rivals. In fact, early indicators show DuPont is already benefitting from cheap natural gas by beating profit forecasts for the first quarter of 2012. With news like this, it is no wonder why Shell recently announced plans to build a new ethane cracker facility in the region.

Thanks to abundant and affordable shale gas, a total of $25 billion in capital investment is flooding the region with the construction of new manufacturing facilities and expansions. The undeniable economics of shale gas has been critical for many companies in the area that rely heavily on natural gas, such as domestic manufacturers of steel, petrochemicals, fertilizer, agricultural goods and others.

But it’s not just large manufacturing companies that stand to benefit – organizations like the Delaware Valley Marcellus Shale Association are working with companies across the region to help businesses take advantage of the vast opportunities that exist for the support services industry. Increased demand for business is flooding local communities across the hospitality, real estate, transportation and restaurant sectors as a result of Marcellus Shale development.

Residential customers are also reaping the rewards from natural gas. Across the nation, households are projected to save $113 billion a year through 2015 due to low natural gas prices. While PGW recently announced lower natural gas rates, Delaware customers can expect utilities here to follow suit and see similar savings on their energy bills.

Despite Governor Markell’s recent refusal to support approval of new regulations for a natural gas production, the Marcellus Shale offers our region and our country the ability to reduce our dependence on foreign oil while creating thousands of domestic jobs and boosting economic development. Fortunately, Delaware can leverage its position as part of this blossoming regional manufacturing hub by recognizing the tremendous opportunity and promise for Delaware’s future and families. With Delaware’s industries and economy poised to benefit from the shale gas boom, now is the time to move forward with policies to encourage the safe, responsible development of the Marcellus Shale.

Mike Mikus
Director, Consumer Energy Alliance Mid-Atlantic

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