As Pennsylvania, Ohio and West Virginia battle it out for an ethane cracker, the American Chemistry Council (ACC) is touting the benefits of building such a facility at the other end of the Rust Belt.
A $3.2 billion ethylene production complex in Michigan could create more than 19,000 jobs along the supply chain and $1.2 billion in wages in the state, according to an ACC report released Tuesday.
The report is the ninth in a series of ACC fact sheets showcasing the potential economic benefits states could see because of investment from the petrochemical industry as a result of cheap shale gas.
The previous fact sheets focused on major shale producers such as Arkansas, Louisiana and Texas (see Shale Daily, Oct. 24, 2011), and Ohio, Pennsylvania and West Virginia in Appalachia, as well as New York, where development is halted by regulatory delays, and New Jersey, where shale isn't present and development isn't currently allowed (see Shale Daily, Aug. 26, 2011).
Although Michigan is not currently a major shale gas producer, Encana Corp., Chevron Corp. and a Devon Energy Corp./Sinopec Group joint venture have major investments planned for the liquids-rich Collingwood, Antrim and Utica shales in the state (see Shale Daily, Jan. 12; Jan. 4; May 5, 2011).
Perhaps more important to the petrochemical industry, though, is Project Mariner West. The pipeline from MarkWest Liberty Midstream & Resources LLC and Sunoco Logistics would ship Appalachian ethane to Sarnia, ON, just across the border from Michigan (see Shale Daily, Sept. 8, 2011). The ACC also cited Michigan's access to the Great Lakes and major rail systems as advantages.
The chemical industry in Michigan employs 26,000 people directly, according to the ACC.
"Stable supplies of reasonably priced natural gas can breath new life into Michigan industry and produce the investment needed for new jobs, higher wages and major increases in state revenue," said Michigan Chemistry Council CEO Cynthia Schulz. "Natural gas is a win-win-win result for Michigan."
In a national report released last year, the ACC found that a 25% increase in shale gas production would result in nearly 400,000 jobs in the chemical sector and supplier industries, more than $132 billion in U.S. economic output and nearly $4.4 billion in federal, state and local tax revenue annually.
Currently, proposed ethane projects are focused on existing markets (see Shale Daily, Dec. 5, 2011).