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Industry makes most of what state has to offer

April 25, 2013
By Dennis Xander - President/CEO of Dennex Petroleum; President of IOGA WV , The Inter-Mountain

While other sectors of the U.S. economy remain stagnant, the natural gas industry's growth has been phenomenal. We are creating good paying jobs, providing healthy tax revenues and reducing both consumer bills and manufacturing costs. West Virginia is one of many states blessed with productive shales.

The direct benefits are obvious: more people finding jobs, and wages and benefits increasing. Projections of future revenues from severance taxes are optimisitic, despite tremendous reductions in commodity prices. The tax base in Marshall County has doubled in just six years. Residential gas rates have fallen 45 percent in the last three years.

But the expansion of the oil and gas industry is just the preface to a more compelling story. Natural gas is a composite of methane, ethane, butane, propane and other gases. Ethane gas, in particular, has valuable alternative uses. To quote Kevin DiGregorio, a Ph.D. chemist and executive director of the Chemical Alliance Zone, "Burning ethane for heat is like grinding filet mignon to make hamburger."

The list of products that start out as ethane is amazing - tires, clothing, carpet, paint, sealants, plastics, detergents, adhesives, for starters. Based on sundry published reports, the supply of ethane is projected to increase 50 percent by 2016 - affording a significant competitive advantage to domestic manufacturers. And why not do it in West Virginia?

This is not a new idea. In fact, the first ethane "cracker," the plant that transforms ethane into various usable forms for manufacturing, was built in 1922 right in West Virginia - in Clendenin. That plant contributed feed stock to a viable chemical industry in the Kanawha Valley for decades. We can replicate that success and vertically integrate here by taking steps to encourage chemical manufacturers to locate in West Virginia to have ready access to ethane and ethane byproducts.

So while there is amazing economic potential in just developing shale gas and oil, the downstream opportunities to exploit ethane production in manufacturing may be even greater. West Virginia can host a cracker, or a series of crackers. The financial viability is proven. The cracker produces intermediate products, like ethelyne. There are additional opportunities to add value to these intermediate products by manufacturing finished consumer goods.

We have been blessed with amazing resources in the shales underlying the Mountain State. The opportunity to utilize those resources is the icing on the cake. But make no mistake: It all starts with drilling horizontal shale wells.

 
 
 

 

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