Two shale formations will produce nearly 50 percent of all U.S. natural gas
Production from the Marcellus and Utica shale formations—already among the largest sources of natural gas and natural gas liquids in the world—is expected to only increase in the next two decades, according to a recent IHS Markit study.
Commissioned by Shale Crescent USA and JobsOhio, the study is the first to quantify this anticipated growth. It forecasts that the Shale Crescent region of Ohio, Pennsylvania and West Virginia will supply 45 percent of the nation’s natural gas production by 2040, up from 31 percent this year.
“This robust outlook is attracting high-value, energy-intensive and natural gas liquids-consuming petrochemical industries to the Shale Crescent USA region,” the study reports.
While a previous IHS Markit study evaluated the prospects for a world-scale ethylene and polyethylene plant based on ethane feedstock, Estimated Logistics Benefits of the Shale Crescent USA Region Versus the U.S. Gulf Coast for Natural Gas and LPG examines the prospects for projects based on methane, propane and normal butane, also known as liquefied petroleum gas.
“Research continues to drive home the myriad economic advantages for manufacturers in the Shale Crescent region when compared to other, more traditionally accepted energy and chemical hubs,” said Wally Kandel, spokesperson for Shale Crescent USA, in a Businesswire.com news release. “Investors are catching on that the Marcellus and Utica shale formations offer unprecedented benefits. There are few other places in the world, if any, where the supply, manufacturing facilities and end users are all in close proximity.”
Within two years, cost advantages for the production of various natural gas liquids in the Midwest versus the Gulf Coast are expected to range from 6 percent to 26 percent, the study found.
“The abundance of natural gas and natural gas liquids has impacted our project pipeline,” Dana Saucier Jr., JobsOhio vice president & head of economic development, said in the news release. “We are in conversations with companies seeking to expand as well as construct new plants in the region.”
In addition to the significant cost advantages, Saucier said another advantage of the Shale Crescent geographic area is that extreme weather rarely affects it.