Shale & Downstream Update Lunch & Learn August 20, 2018 Paul Boulier Over 96% of all manufactured goods are touched by the “Chemistry Industry” Chemistry Industry directly employs >42,000 people in OH; it indirectly employs over 230,000 people in OH *American Chemistry Council 1
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Consumer Shale Gas Yields Many “Products” Products Medical Devices Packaging Power Injection Molding, Extrusion, “NGLs” Blow Molding, etc. Ethane Chemicals Propane & Plastics Butane Pentane “C5+” Fuel Further Processing (CNG, LPG, LNG*) Adhesives Paints & Coatings Household *CNG, compressed Natural Gas (methane) , ~3,000psig LNG, Liquified Natural Gas (methane), (-260F, liquid) Cleaners LPG, mix of gases (propane, butane, propylene, butylene, etc.) 3 3
Growth-Domestic & Global. In Ohio, it represents ~$34 B in output (20% is exported), 43k jobs, average wage of $76,000/yr 4 3
NGLs & Downstream Shale Value Chain Our region’s shale opportunity comes by making this manufacturing value chain more globally competitive >$179B Nationally* >$35B Nationally** >$65B in OH alone, 2011-2016** “Infrastructure Build” “Positioning, Scaleup, Buildout ” **CSU Study *American Chemistry Council, investments since 2010 (includes ~$25B for resins) *ACC, investments since 2012, >400 projects, Compounding & Plastic Products 5 5
Natural Gas output increasing, driving continued Investment in OH and the Region Sources: U. S. Energy Information Association, 6 5 Cleveland State University
Nationally By the Numbers NEO By the Shale & Downstream Wins from 2012-2017 Numbers • 81 projects • 4,100 new jobs created • $2,300,000,000 in Capital Investment 7
Petrochemical & Downstream Manufacturers within 400 Miles: 17,477 Companies 250 “Large*” Chemical Companies: Ohio ~180 PA ~ 50 WV ~ 20 • • Chemical Manufacturers (purple):6,371 Companies Rubber Mfg. & Conv. (brown): 1,812 Companies • • Plastic Converters (blue): 8,147 Companies Plastics Mfg. (green): 1,147 Companies *Large Company=>100 employees 8 6
Build Out of Shale & Downstream has Tremendous Upside for our Region* *” The Potential Benefits of an Appalachian Petrochemical Industry ”, American Chemistry Council, May, 2017 9 7
Tri-State Shale Coalition (TSSC) • Founding Members/Steering Team and Core Team – Team NEO , APEG, JobsOhio – Benedum Foundation, Pittsburgh Reg. Alliance/Allegh. Conf ., PA DCED – VisionShared /WV Dept. of Commerce – Single Point of contact with each Governor’s office • Governors Cooperation Agreement (10/15; renewed 3/18) • Four Streams: Transportation & Infrastructure, Marketing, Workforce, Research/Innovation/Commercialization • Facilitated Appalachian Storage Hub Study • Collaboration between OH, PA, WV Geological Surveys-completed 7/17 • Funders: Benedum Foundation, Chevron, Southwestern Energy, EQT, AEP, First Energy, XTO, Mountaineer NGL, Antero, WVONGA, Noble, Dominion, Blue Racer-$200K raised • Identified three strong areas with ethane storage potential 10 8
From “A Geological Most Attractive Study to Regions Determine the Potential to Create an Appalachian Storage Hub for Natural Gas Liquids ”, 7/31/17 11 8
TSSC (continued) • Marketing the Region – Presentations on Tri- State’s Value Proposition at numerous venues in/out of our Region (Nationally and Internationally) – Outreach to Industry and Trade Associations and Economic Dev. • K Fair, American Chemistry Council, NE US & Canada Petchem Conference, 2017 International Elastomer Conference, 2017 Global Plastics Summit – Energy/Downstream Intelligence Report, Site Selector Magazine (January) – Executing project with outside firm to develop Naming/Branding strategy for Region • Research/Innovation/Commercialization – Developing agreement/MOU between Universities to cooperate and help position and promote their Applied Research capabilities • Workforce – Coordination of training and development in anticipation of Shell ethylene/PE (CCBC) and other Midstream and Downstream assets – TEAM (Tri-State Energy and Advanced Manufacturing Consortium • TSSC Summit IV 12 10
Road >60% of Consumers Gas & NGLs Rail Within 500 mi: Low-cost (vs. Cheap, plentiful electricity Sea Auto USGC) Tight, aligned Supply Chain Logistics Air Aviation for Chemicals, Plastics, & Medical Rubbers, Metals & Cons. Products Transport Converted Products Industrial Proximity Improved To Manufacturing NEO’s Markets Efficiency Value Proposition for Chemicals & Plastics “Value Add” Established Strong Infrastructure Innovation Skilled Labor, Export IP Creation& Higher Ed Potential Protection 13 13
How Does the Region Stack Up? 14
Petrochemical & Downstream Manufacturers within 400 Miles: 17,477 Companies 15 15
Experienced Talent Pool Percent of Workforce Employed in Percent of Workforce Employed in Chemical Manufacturing Fabricated Metal Product Manufacturing 1.4% 1.2% 2.5% 1.0% 2.0% 0.8% 1.5% 0.6% 1.0% 0.4% 0.5% 0.2% 0.0% 0.0% United States Tech Belt Philadephia Houston MSA Philadephia United States Houston MSA Tech Belt (OH, WV, PA) MSA MSA (OH, WV, PA) Percent of Workforce Employed in Plastic and Rubber Product Manufacturing 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Houston MSA Philadephia United States Tech Belt MSA (OH, WV, PA) 16
Ample Pipeline of Talent from 51 Colleges & Universities Degrees Awarded 2014-2015 900 800 700 600 500 400 300 200 100 0 Chemical General Industrial Materials Science Materials Polymer/Plastics Engineering Chemistry Engineering Engineering Engineering Tech Belt (OH, WV, PA) Houston Region *TechBelt data includes degrees from Ohio State University and Penn State University **Houston data includes degrees from University of Texas – Austin Source: EMSI 17
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Thank you! 19
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