Monday, July 04, 2011

Banana Republic Of Pennsylvania

I picked up on two Marcellus Shale stories (here and here) thanks to Chris Briem's (Null Space) Twitter. The first linked article concerns pipeline infrastructure and getting the gas to market. The second linked piece reviews the possibility of a petrochemical manufacturing boom in Westsylvania. Both converge at Fuel Fix:

Asian and European chemical manufacturers rely largely on oil-based raw materials, with prices tied to crude.

As a result, many petrochemical companies are modifying their existing Gulf Coast plants to take better advantage of the natural gas supply in both Texas and the Northeast.

A partnership of oil and gas transporters is preparing a network of pipelines and storage facilities to ship Marcellus ethane to the Gulf Coast. MarkWest Liberty Midstream & Resources and Sunoco Logistics Partners say their system will be able to ship up to 50,000 barrels of ethane a day to the Gulf Coast at its launch, expected by mid-2013.

“That’s what makes the most sense, build a pipeline from Pennsylvania to Texas and build your new capacity down here,” said Giacobbe, a Houston-based consultant.

Production in West Virginia makes sense in terms of domestic markets. But the global markets are the real prize. The demand growth is in developing countries (e.g. BRIC).

In the latest issue of Planning (American Planning Association magazine), Jeffery Spivak explores possible ramifications of a deeper and wider Panama Canal:

In just a few years, though, those household and business products may journey from China to the stores in a different way, on a new generation of supersized ocean vessels that bypass the West Coast. These freighters will cut across a newly widened Panama Canal before docking at a port along the East Coast or Gulf Coast. This prospect is setting off a competition among eastern and southern ports, all eager to become the go-to destination for Asian imports.

The economic geography of trade is about to undergo a major transformation. The smart money is on shipping the gas out of Pennsylvania to the Gulf Coast. This would gouge the job benefit for the Marcellus region. Texas and Louisiana should send a gift basket to the Marcellus Shale Coalition and PA Governor Tom Corbett.

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