Shale & Downstream Update Lunch & Learn August 20, 2018 - - PowerPoint PPT Presentation

1

Shale & Downstream Update

Lunch & Learn August 20, 2018

Paul Boulier

*American Chemistry Council

Over 96% of all manufactured goods are touched by the “Chemistry Industry” Chemistry Industry directly employs >42,000 people in OH; it indirectly employs

• ver 230,000 people in OH

2

3

Shale Gas Yields Many “Products”

3

Power

Ethane Propane Butane Pentane “C5+”

Fuel

(CNG, LPG, LNG*)

*CNG, compressed Natural Gas (methane) , ~3,000psig LNG, Liquified Natural Gas (methane), (-260F, liquid) LPG, mix of gases (propane, butane, propylene, butylene, etc.)

“NGLs”

Chemicals & Plastics

Injection Molding, Extrusion, Blow Molding, etc.

Consumer Products Medical Devices Packaging

Further Processing Adhesives Paints & Coatings Household Cleaners

4

Growth-Domestic & Global.

In Ohio, it represents ~$34 B in output (20% is exported), 43k jobs, average wage of $76,000/yr

3

5

>$179B Nationally*

NGLs & Downstream Shale Value Chain

Our region’s shale opportunity comes by making this manufacturing value chain more globally competitive

5 “Infrastructure Build” “Positioning, Scaleup, Buildout”

>$35B Nationally**

*American Chemistry Council, investments since 2010 (includes ~$25B for resins) *ACC, investments since 2012, >400 projects, Compounding & Plastic Products

>$65B in OH alone, 2011-2016**

**CSU Study

6

Natural Gas output increasing, driving continued Investment in OH and the Region

Sources: U. S. Energy Information Association, Cleveland State University

5

7

Nationally By the Numbers

Shale & Downstream Wins from 2012-2017

• 81 projects
• 4,100 new jobs created
• $2,300,000,000 in Capital Investment

NEO By the Numbers

8

Petrochemical & Downstream Manufacturers within 400 Miles: 17,477 Companies

• Chemical Manufacturers (purple):6,371 Companies
• Plastic Converters (blue): 8,147 Companies
• Rubber Mfg. & Conv. (brown): 1,812 Companies
• Plastics Mfg. (green): 1,147 Companies

250 “Large*” Chemical Companies: Ohio ~180 PA ~ 50 WV ~ 20 *Large Company=>100 employees

6

9

Build Out of Shale & Downstream has Tremendous Upside for our Region*

*”The Potential Benefits of an Appalachian Petrochemical Industry”, American Chemistry Council, May, 2017

7

10

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

8

11

From “A

Geological Study to Determine the Potential to Create an Appalachian Storage Hub for Natural Gas Liquids”,

7/31/17

Most Attractive Regions 8

12

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

10

13

13 Proximity To Markets Strong Export Potential Improved Manufacturing Efficiency Skilled Labor, Higher Ed NEO’s Value Proposition for Chemicals & Plastics Logistics & Transport

>60% of Consumers Within 500 mi: Auto Aviation Medical

• Cons. Products

Industrial Road Rail Sea Air “Value Add” Innovation IP Creation& Protection Cheap, plentiful electricity Tight, aligned Supply Chain for Chemicals, Plastics, Rubbers, Metals & Converted Products Established Infrastructure Gas & NGLs Low-cost (vs. USGC)

14

How Does the Region Stack Up?

15

Petrochemical & Downstream Manufacturers within 400 Miles: 17,477 Companies

15

16

Experienced Talent Pool

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% United States Tech Belt (OH, WV, PA) Philadephia MSA Houston MSA

Percent of Workforce Employed in Chemical Manufacturing

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% Houston MSA Philadephia MSA United States Tech Belt (OH, WV, PA)

Percent of Workforce Employed in Plastic and Rubber Product Manufacturing

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% Philadephia MSA United States Houston MSA Tech Belt (OH, WV, PA)

Percent of Workforce Employed in Fabricated Metal Product Manufacturing

17

*TechBelt data includes degrees from Ohio State University and Penn State University **Houston data includes degrees from University of Texas – Austin Source: EMSI

Ample Pipeline of Talent from 51 Colleges & Universities

100 200 300 400 500 600 700 800 900 Chemical Engineering General Chemistry Industrial Engineering Materials Science Materials Engineering Polymer/Plastics Engineering

Degrees Awarded 2014-2015

Tech Belt (OH, WV, PA) Houston Region

18 18

19

Thank you!