There’s a potential manufacturing revolution on the horizon for the state of Pennsylvania. The state’s territories currently sit on vast areas of untapped natural resources that, if utilized, could give the northeastern United States its first major player in the large-scale production and distribution of natural resources, officials say.
In a conversation with Industry Today, David Taylor, Executive Director of the Pennsylvania Manufacturers Association, talks about this potential, what it would mean for his state’s manufacturing scene, and what is holding it up from happening. Steve Engelhardt reports.
A little over a hundred years ago, the Pennsylvania economy was the third largest in the world. With a dominant presence in the production of steel and coal, Pennsylvania “ruled the world,” Taylor says. But over time, due to a combination of these major production mills shifting into smaller, micro mills, and a reckless mindset possessed by the local politicians with respect to how they spent the profits, the money, and overall business, dried up.
“There was this mentality that once they found a captive industry, they chose to bleed it, viewing it as a bottomless money pit,” he says, adding, “it was really defeating and counterproductive, and it’s something we have worked hard to eradicate as a viable behavior towards conducting business.”
Yet present prospects have him quite excited, specifically because of a potential opportunity on the horizon for the state that could serve to propel them back into a manufacturing powerhouse in the United States. “The American natural gas boom is world-historic, in terms of the impact it could have, and part of that potential lies right here in Pennsylvania.”
Sleeping Gold Mine
The Marcellus Formation represents one of the most significant sources of his statement. It is a stretch of marine sedimentary rock running along much of the Appalachian Basin in eastern North America. Royal Dutch Shell, the multinational oil and gas giant, had recently been researching a viable location within this vast natural resource deposit to build a petrochemical plant and chose Pennsylvania over Ohio and West Virginia as the territory to carry out the drilling. Although nominated for what could be a game-changing boost to his state’s overall economy, Taylor says that state politicians and external environmental organizations are hampering the political process in what would be “the smart business decision for Pennsylvania.”
And yet, not everyone is onboard. Organizations like the U.S. Environmental Protection Agency (EPA) have successfully blocked similar measures before, and represent a strong vocal opponent of Shell and other companies’ attempts to begin drilling for natural gas in the region. Other initiatives, such as the “No Fracking” solution championed by environmentalists throughout the country, have also added more noise to the equation.
But Taylor says that this “smart business decision” will benefit those on both sides of the issue, because at the end of the day, “we all live here and these woods are our home, and we absolutely expect the industry to abide by the best practices, and have any and all corporate citizens partner with and be held accountable in the local communities they operate in.”
The result would be a manufacturing scene exclusive to businesses operating in Pennsylvania. “If we can get this right, we can envision a setting where we have natural gas from the Marcellus Shale, drilled right here in Pennsylvania, transported through pipelines made by US Steel in Pittsburgh, converted to liquefied natural gas (LNG) and shipped all around the world in tankers made and docked in Philadelphia.” He also adds that the increased activity could go a long way for some of rural areas of his state, particularly Beaver County, where Shell’s plant’s would-be location was set, in regaining their former glory.
Taylor says this potential Shell petrochemical plant would represent the first of its kind in the northeast, and serve to provide an economical boost similar to those experienced down along the Gulf of Mexico. “This would be a $4 billion dollar investment into the private sector and instantly create about 10,000 jobs to build it,” he says, noting, “and its impact would have plenty of runoff into other industries as well.” This impact in other industries is due to the fact that natural gas typically comes up with large additional amounts of ethane. Ethane can then be converted into ethylene, which serves as the precursor for every kind of paint, glaze, coating, adhesive, solvent, Styrofoam, and even fertilizer.
He says the pipeline would not only help his state’s energy industry and overall economy, but also play a big role in helping the U.S. become independent in energy consumption. “This natural gas could be easily transported all over, and could also serve as much more viable option for our allies up north in Canada,” he says, adding, “Pennsylvania already produces about 25 percent of Ontario’s natural gas consumption, and they keep asking us how we can supply more.”
The natural gas boom would be a huge lift to Pennsylvania, which already boasts strong manufacturing activity relative to its northeastern neighbors, with a value-added figure of $70 billion, accounting for about 13 percent of the state’s overall economy. But Taylor has his sights set higher than just being a northeast manufacturing power, and says that this natural gas boom could elevate them to a level where they are benchmarking themselves compared to states like Indiana and even Texas.
“Manufacturing is the largest contributor to the wellbeing of the Commonwealth, and this pending decision on the Marcellus Shale is strongly tied to how we operate and perform as a state in the future,” he says.
Concerns for the environment must be abided by, but if decision makers at the state level in Pennsylvania, as well as those down in Washington, are able to give it the go ahead, then one may see an unprecedented manufacturing revolution take place in one of the most well-established and hard-working regions in the United States.
About the Pennsylvania Association of Manufacturers
The Pennsylvania Manufacturers’ Association (PMA) is the leading voice for manufacturing in the commonwealth. With over a century of service to the manufacturing community, PMA continues to fight for its members in the effort to build a more competitive and prosperous Pennsylvania. PMA is committed to assisting companies meet the growing challenges of a global economy, seek a more highly skilled workforce, and address onerous regulatory and tax burdens. To this end they will fight for policies and programs that will grow manufacturing here in the commonwealth.